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re: The Downfall of Southwest

Posted on 6/4/25 at 3:49 pm to
Posted by The Scofflaw
Metairie, LA
Member since Sep 2014
1914 posts
Posted on 6/4/25 at 3:49 pm to
quote:

what was your issue? I’ve flown spirit direct from MSY to Cancun, Nashville and Orlando so far this year and each time the planes have been brand new, we got the big seats up front with the blocked middle seat, and it’s been as pleasant as air travel can be

The airplane was great (better than major airlines), but the check in was awful. No help and line to check your luggage took almost 2 hours. People cutting in line, etc.
Posted by Lsut81
Member since Jun 2005
83729 posts
Posted on 7/24/25 at 6:01 am to
Bump:

They released their Q2 earnings and a miss as expected... This as opposed to strong beats by United and Delta in Q2.

quote:

Southwest Airlines
on Wednesday posted second-quarter earnings and revenue that fell short of Wall Street’s estimates but said travel demand has stabilized, echoing other airlines in recent weeks.

The airline also announced a new $2 billion share buyback.


The airline has been overhauling its business model, getting rid of blanket policies such as two free checked bags for all customers and moving from open seating to assigned seats and new boarding orders, which the carrier announced Monday.

Southwest said sales of basic economy suffered on its website after it launched the restrictive new fares in May. It said they have since returned to “expected levels” but that it hurt its unit revenue in the second quarter by half a point and would hurt unit revenue by about a point in the third quarter.

Southwest posted net income of $213 million, or 39 cents per share, in the second quarter. That is down 42% over last year, on sales of $7.24 billion, 1.5% lower than a year earlier. Adjusting for one-time items, Southwest’s second-quarter earnings were $230 million, or 43 cents a share, down 38% from last year.

Passenger revenue per seat mile came in at $14.10, below the $14.19 Wall Street had expected, according to Street Account.


LINK
Posted by CuseTiger
Member since Jul 2013
8961 posts
Posted on 7/24/25 at 6:20 am to
I haven't even looked at booking Southwest for any potential cheap fall weekend getaways. I've actually recommended spirit to my friends over southwest with no carry-on luggage and conveniently timed nonstop flights.

One thing I don't understand is the stock buybacks. Why? Can someone explain the benefit of doing this?
Posted by MintBerry Crunch
Member since Nov 2010
5844 posts
Posted on 7/24/25 at 6:38 am to
I hate to say it, because I’ve been delayed by them several times, but the legroom on my American flight the other day was incredible.
Posted by LemmyLives
Texas
Member since Mar 2019
13571 posts
Posted on 7/24/25 at 6:58 am to
quote:

the legroom on my American flight

Statements like this are why people develop unfounded cult followings for their airline of choice.

AA can have a domestic (non regional jet, non widebody) seat pitch of between 30 and 34 inches. All but one plane (A319) are either 31 or 32 inches in economy (not Main Cabin Extra.)

If you look at United, their narrowbody non regional jets can have between 30 and 35 inches of pitch in economy, with the exception of the 757 which can have 38! in economy.

TLDR; it all depends on the plane and the seat you select, it's not the "airline."
Posted by Lsut81
Member since Jun 2005
83729 posts
Posted on 7/24/25 at 7:13 am to
quote:

I haven't even looked at booking Southwest for any potential cheap fall weekend getaways.


Me too. I've flown on them once this year and that was using RR points and have another booked this winter using RR points.


On the other hand, United has taken around $15k from me thus far this year.
Posted by bluestem75
Dallas, TX
Member since Oct 2007
4925 posts
Posted on 7/24/25 at 8:26 am to
quote:

But curious, after your november trip, how often are you going to book with Southwest over AA going forward? Or is it just going to be a 'What is the cheapest flight I can get going from DFW to ___ including bag costs, seat assignments, etc?'


Possibly. I have a SWA credit card, so I keep a lot of the same benefits if I book with the card which I always do. Their rewards program hasn’t changed, so they’re still the easiest to earn and use points. I just got 14k back with a fare drop on our outgoing flight in Nov.

I’ll be figuring out how to get us on Hawaiian whenever we finally plan the trip to Kauai. Whenever we go to Europe, I’ll be booking Lufthansa or someone else. Anything to avoid American.

Love is so much less of a headache than D/FW, SWA has that going for it as well.
This post was edited on 7/24/25 at 8:32 am
Posted by cgrand
HAMMOND
Member since Oct 2009
46743 posts
Posted on 7/24/25 at 8:54 am to
southwest is and always has been my airline of last resort. For low fare short hops breeze and spirit (at least in/out of MSY) are far superior as a flight experience

we’ve been having to spend a lot of time in Virginia lately and the NS to Norfolk on breeze is cheap, easy and actually a nice ride
Posted by cornerstore
Member since Jul 2024
1747 posts
Posted on 7/24/25 at 8:56 am to
Elliott is a notoriously terrible investor and has a long history of basically destroying companies they take an activist interest in. Southwest leadership should have told them to get fricked. Sad to see the unnecessary destruction of what was a great airline.
Posted by cgrand
HAMMOND
Member since Oct 2009
46743 posts
Posted on 7/24/25 at 8:58 am to
quote:

One thing I don't understand is the stock buybacks. Why? Can someone explain the benefit of doing this?
public companies buy back their own stock when they have surplus cash and the stock price is low. This does two things…it reduces the number of shares available on the market and gives the company a (hopefully) appreciating asset on their books. They can then use those shares to sell at a later date at a profit (again, hopefully) or as leverage to borrow

Same reasons institutions buy tranches of stock
Posted by CuseTiger
Member since Jul 2013
8961 posts
Posted on 7/24/25 at 9:43 am to
quote:

public companies buy back their own stock when they have surplus cash and the stock price is low. This does two things…it reduces the number of shares available on the market and gives the company a (hopefully) appreciating asset on their books. They can then use those shares to sell at a later date at a profit (again, hopefully) or as leverage to borrow

So let me get this straight. Southwest misses on earnings due to their new basic economy fares, acknowledges that Q3 will also be down because of those fares, somehow takes their cash and reinvests it into the company stock/product that fewer people are buying into? Help it make sense
Posted by tilco
Spanish Fort, AL
Member since Nov 2013
14313 posts
Posted on 7/24/25 at 2:36 pm to
We fly Southwest out of Pensacola a fair amount but only for the companion pass. We flew from pcola to Nashville a couple weeks ago and it is basically a notch above spirit at this point. American and United are both much better experiences.
Posted by H2O Tiger
Delta Sky Club
Member since May 2021
7701 posts
Posted on 7/24/25 at 4:39 pm to
Southwest and Chase raised annual fees on all Rapid Rewards credit cards earlier today.

LINK
Posted by Lsut81
Member since Jun 2005
83729 posts
Posted on 7/24/25 at 5:00 pm to
quote:

Southwest and Chase raised annual fees on all Rapid Rewards credit cards earlier today.


Bold strategy cotton
Posted by cgrand
HAMMOND
Member since Oct 2009
46743 posts
Posted on 7/24/25 at 5:49 pm to
quote:

Southwest misses on earnings due to their new basic economy fares, acknowledges that Q3 will also be down because of those fares
may or may not affect the stock price. $LUV was down pretty big today but its up 25% in the past 12 months. missed earnings dont always result in lower stock prices, certainly analyst estimates will be lowered for next 2-3 quarters so they may actually beat the revised guidance.

stock buybacks are a balance sheet maneuver
Posted by SeeeeK
some where
Member since Sep 2012
30683 posts
Posted on 7/24/25 at 6:15 pm to
quote:

ghetto airline



lol, and you claimed spirit as a good option.
Posted by cgrand
HAMMOND
Member since Oct 2009
46743 posts
Posted on 7/24/25 at 8:49 pm to
quote:

lol, and you claimed spirit as a good option.
its a far better option than SW. the spirit front-of-plane seat option with the blocked middle seat is the best deal in air travel
Posted by travelgamer
Member since Aug 2024
2652 posts
Posted on 7/25/25 at 4:20 am to
quote:

Southwest


Recently finished a 6 week road trip there, I expected a lot of flat sand and cacti, but the mountains humbled me. Amazing for a visit.


OOPS you meant the airline, my bad.
This post was edited on 7/25/25 at 4:22 am
Posted by Lsut81
Member since Jun 2005
83729 posts
Posted on 7/25/25 at 5:51 am to
quote:

its a far better option than SW. the spirit front-of-plane seat option with the blocked middle seat is the best deal in air travel


I've never and will almost certainly never fly Spirit, but what? Their first class is basically Covid seating at the front?
Posted by CuseTiger
Member since Jul 2013
8961 posts
Posted on 7/25/25 at 6:07 am to
Spirit has the big seats up front similar to the old domestic first seats. 2x2 configuration, surprisingly comfy seats. I'd fly that again
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