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Southwest reports quarterly net loss in 4Q08, on weak US economy and hedging losses


Southwest reported (22-Jan-09) a quarterly loss of USD56 million in the three months ended 31-Dec-08 (4Q08), after reporting its first quarterly net loss in 17 years in 3Q08. Southwest’s 4Q08 loss was in large part due to one-off expenses of USD117 million for adjusting the market value of its fuel-hedging portfolio. Excluding the special items, the LCC reported a 4Q08 net profit of USD61 million, the carrier’s 71st consecutive quarter of profitability, excluding special items. [2040 words]

Unlock the following content in this report:


  • Record revenue in 4Q08, as major revenue initiates show signs of success
  • Unit yields, revenues and costs on the rise
  • Reduces fuel hedges as benefits unwind
  • To shrink for first time in 23 years in 1Q09
  • Defers aircraft deliveries
  • Takes action against backdrop of reduced travel demand and tight credit markets
  • "Notable softness" in post-Jan-09 bookings; unit costs on the rise
  • 2009 - a year of notable strategic change for Southwest

Graphs and data:

  • Southwest financial highlights for three months ended 31-Dec-08
  • Southwest operating margin: 1Q06 to 4Q08
  • Southwest yield per RPM (US cents): 2Q04 to 4Q08
  • Southwest cost per ASM (US cents): 2Q04 to 4Q08
  • Southwest fuel as a portion of total operating expenses: 2Q04 to 4Q08
  • Southwest Fuel Hedging Programme: as at Sep-08
  • Southwest capacity (ASKs) growth: Jan-04 to Dec-08
  • Southwest fleet plan: 2009 to 2016: as at Jan-09 (Sep-08 plan in brackets)
  • Southwest recent liquidity-boosting actions
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