Southwest Airlines 2015 Annual Report Download - page 35

Download and view the complete annual report

Please find page 35 of the 2015 Southwest Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 148

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148

changes in law and future actions taken by domestic and foreign governmental agencies having
jurisdiction over its operations, including, but not limited to:
• increases in airport rates and charges;
• limitations on airport gate capacity or use of other airport facilities;
• limitations on route authorities;
• actions and decisions that create difficulties in obtaining access at slot-controlled airports;
• actions and decisions that create difficulties in obtaining operating permits and approvals;
• changes to environmental regulations;
• new or increased taxes or fees;
• changes to laws that affect the services that can be offered by airlines in particular markets
and at particular airports;
• restrictions on competitive practices;
• changes in laws that increase costs for safety, security, compliance, or other Customer
Service standards;
• changes in laws that may limit the Company’s ability to enter into fuel derivative contracts to
hedge against increases in fuel prices;
• changes in laws that may limit or regulate the Company’s ability to promote the Company’s
business or fares; and
• the adoption of more restrictive locally-imposed noise regulations.
Because expenses of a flight do not vary significantly with the number of passengers carried, a
relatively small change in the number of passengers can have a disproportionate effect on an airline’s
operating and financial results. Therefore, any general reduction in airline passenger traffic as a result
of any of the factors listed above could adversely affect the Company’s results of operations. In
addition, in instances where the airline industry shrinks, many airport operating costs are essentially
unchanged and must be shared by the remaining operating carriers, which can therefore increase the
Company’s costs.
The airline industry is affected by many conditions that are beyond its control, which can impact
the Company’s business strategies and results of operations.
In addition to the unpredictable economic conditions and fuel costs discussed above, the Company,
like the airline industry in general, is affected by conditions that are largely unforeseeable and outside
of its control, including, among others:
• adverse weather and natural disasters;
• outbreaks of disease;
27