Thanks so much for your time today. Good day, and welcome to the Southwest Airlines first quarter 2023 conference call. And yet you have a pretty big operation there, as I recall. That compares with more than $11,000 per employee in 2019. So, certainly not unique to us. Now, with the order book dropping, the deliveries issue dropping from 90 to 70, that's the point at which the pilot constraint turns into an aircraft constraint is -- will definitely be earlier. The purpose of the Compensation Committee (the Committee) of the Board of Directors (the Board) of Southwest Airlines Co. (the Company) is to assist the And so, that's what's rolled out there into our guide. So, that's kind of a good segue, I guess, into my next question. We gained a point of market share in the managed travel space over the last quarter. I feel valuable as an employee. Southwest Airlines Company Thanks, Andrew. This is just an excellent job by our revenue management team to skillfully manage multiple revenue management systems as we recovered from the pandemic and which ultimately led to this selection. This year-over-year headwind will not persist in the second half of 2023. I mean, if the demand isn't there and load factors under pressure, why wouldn't we rethink that a little bit, especially if we're constrained in getting resources and having difficulty kind of getting the operation up to that level? We've got a lot of opportunities. We saw the reverse over the second half of the quarter and witnessed strong revenue trends throughout March. March was really strong. We actually publish those schedules with some easily movable aircraft to hedge our bets in case something did happen, so that will be fairly clean. And we are very focused on bending our cost down again in 2024. As you think about 2024, what is going with cost, related to that is it's our intent to really push -- as we talked about at investor day, push on operating leverage. Not only are we watching the scores in confidence and trust and consideration for Southwest for their next trip. We want an orderly growth. ET. As we look ahead, we currently expect solid profits here in Q2. I'd also add to -- there's a comp here. Our first quarter jet fuel price was $3.19 per gallon, which was on the high end of our guidance range. All in all, the overall domestic revenue environment remains strong, and our initiatives are performing in line with our expectations. We just reached a tentative agreement with TWU 550, which represents our Meteorologists, and I want to commend both negotiating committees for the spirit of cooperation that led to that agreement. Just on -- a follow-up question on Net Promoter Score. And a lot of that became evident as we worked our way through the first quarter here and we had to adjust our revenue management techniques to kind of adapt for that. Published by Statista Research Department , Mar 23, 2023. It will give us time to work on operating leverage where we can add capacity into places where we have gaps, we can add that capacity at much lower cost. It certainly helps with cost. We saw a first quarter record of new Rapid Rewards members added to the program and also had a first quarter record of ancillary revenue per passenger. EC 261 is not limited to just Southwest Airlines compensation either. And so, my question is, do you feel like the band-aid is finally being ripped off today? Yes. You see it every day, everywhere. Or any additional color there would be great. Southwest Airlines Co pays its employees an average of $85,323 a year. Salaries at Southwest Airlines Co range from an average of $52,444 to $142,691 a year. Zwischen Weingrten und Donau in Hollenburg bei Krems: 72 km westlich von Wien (50 Min. And so, that's where we'll be focused going forward, and that's where the sales team is focused, and our efforts seem to be paying off. But in terms of bookings, no evidence of any sort of hangover. And so, they have a blue-ribbon panel, they've just announced to help lead this effort. If You Do This, You Won't Have to Worry About Them, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. That said, we're always going to look for opportunities to improve. Since then, we also provided greater detail on the microsite, emailed our customers with a readout of the key findings and remediation items we want in place by winter 2023. And I think that over time, we've actually got a lot of opportunity in the vacation space relative to where our network sits and kind of how we participate in that market. Therefore, the reduction in our delivery should not impact our summer flight schedule. In closing, I'm just so very proud of our people. The company has about 54,000 workers nationwide, including 1,000 in North Texas at its corporate headquarters at Dallas Love Field. Managed business is going to sequentially improve here, looks like in the second quarter from where we were in the first. Thanks, Duane. As an example, on the aircraft that we have where we have improved and enhanced Wi-Fi, the investments are paying off. We are currently in discussions with our workgroups to enact this increase in pay rates.. All of this was made possible by the drive and hard work of our incredible employees. About 75% of the quarter is booked at this point. Leisure demands and yields, which are well above pre-pandemic levels, continue to be strong heading into summer, and we're currently seeing the sequential improvements in operating revenue and yields that we would expect in the seasonally strong second quarter. And so, even with the negative revenue impact at the beginning of the quarter, we had record first quarter operating revenues of $5.7 billion and record first quarter RASM of $0.15. Fort Worth-based American Airlines, which lost $2 billion for the year, did not accumulate any profit-sharing for employees for 2021. Southwest Airlines (LUV 1.37%) Q1 2023 Earnings Call Apr 27, 2023, 12:30 p.m. But yes, I think you could expect that for the most part, we're pretty clean at this point. The first quarter has got a lot of noise in there, whether you've got Omicron last year or you've got our disruption this year. We've added travel credits that never expire just like our growth points that never expires. So, is the takeaway that the book away has fully ceased and the brand is intact? We -- that are stacked up forward. There is still work to be done to fully recover, but we are currently forecasting a substantial improvement sequentially to the bottom line with solid profitability this quarter. Ihr Event, sei es Hochzeit oder Business-Veranstaltung, verdient einen Ort, der ihn unvergesslich macht. Any thoughts on why we're seeing that trend show? Actually, our vacation business is doing well. September and October will be modest revisions to what was already published. How Much Does Southwest Airlines Pay in 2023? (6,311 Contents: Prepared Remarks; Questions and Answers; Call Participants; Prepared Remarks: Operator. Compensation Committee Southwest Airlines We continue to accrue market and competitive wage rates for our employees, which means our financial results and guidance already reflect their estimated raises. Hier, mitten in Hollenburg, ca. Thanks for the clarification, Andrew. In addition to the recent aircraft delivery delays, which are not reflected in our contractual order book, we continue to reflect 46 undelivered 2022 contractual aircraft deliveries as 2023 deliveries in the order book, further outlined in our press release. And so, we knew that would flip over some time at the end of the year with the Boeing reductions now pulls it forward. What do they want in our products, that includes potential changes -- and so we -- and that we periodically do deeper studies on things like assigned seating. Southwest Stock Falls: Has the Once-Loved Airline Lost Its Edge? 1 airline in Kansas City, growing from six flights in 1982 to 75 flights today. Hey, thanks for taking my question guys. And I'll let -- Helane, thank you so much for the question. And that's where then they say, "Well, I'll fly them again." Thank you. Our planned deliveries continue to differ from our contractual order book. ET. We had the 18 new cities in the Hawaii expansion we did and we modified that at the margin. And I guess turning to the sort of the state of near misses or runway incursions the last couple of months across the industry, given that there doesn't seem to be a real clear single cause or single common denominator in all of these incidents, does that -- what is that -- are there things that you can do or you have been doing to kind of try and address those or prevent future incidents sort of given that they're not -- they haven't all been the same? So, that is a drag. We have not lost sight of our goals or the warrior spirit of Southwest Airlines, and I'm eager to move forward along our path of success for many years to come. Also, we will reference our non-GAAP results, which exclude special items that are called out and reconciled to our GAAP results in our press release. I wondered if that was something that Southwest is doing as well, especially considering the one to get a way clusters and if you've seen any recognizable patterns of that. Thank you. Thank you, Chad, and I'd like to welcome members of the media to our call today. Southwest was only able to achieve a profit this year thanks to $2.7 billion in government support grants, money that was supposed to go toward paying employees salaries, wages and benefits anyway. However, the quarter was not without notable accomplishments. So I put in three buckets. What was your second question? OK. Dave, I'll assume, you're done there. But back to your question, I mean, the value proposition that has always existed for Southwest Airlines for over 50 years is still true today. As Ryan pointed out, we had record additions in terms of rapid reward members in the first quarter. Can you share with us how that's looking sort of now versus where it was maybe in January? I mean, it's prudent to do that. And ladies and gentlemen, we will now begin with our media portion of today's call. We really appreciated the opportunity to partner with the airport to deliver a beautiful new terminal that will serve us and the community well for a very long period of time. So on the hiring, I would just tell you, again, we're really early in this process with Boeing to understand the impacts specifically, and we pick the 70 in terms of planning or deliveries for 2023, but in terms of understanding exactly where are they -- and then a lot of your hiring again is in advance. Southwest is also cutting its schedule in the first half of the year to provide more buffer to operations due to staffing challenges. Alexandra Skores -- Aviation Business Reporter. COVID-19 has continued to make staffing the airline difficult, particularly as the more contagious omicron variant swept across the nation. Southwest Airlines And so far, historically, that's always told us that our customers love our product. By signing up you agree to ourTerms of ServiceandPrivacy Policy. For several decades, Southwest Airlines was the envy of the airline industry because of multiple competitive advantages: a low-cost structure that stayed low due to And then, for next year, I think Bob touched on when we talked about reflowing the order book because these aircraft that were not delivered last year, not delivered this year, you can't just assume they're bunching up and they're all coming once next year because that would be -- we're looking for an orderly growth, as Bob said. But on top of that, you've got obviously the investments we've made in business, GDS, those are showing up. I'm also proud to announce that we have completed the selection and rollout of our new revenue management system, which is the Amadeus Network Revenue Management product. And despite the negative impacts in Q1, we believe we still have a solid plan for 2023. Learn more about each company and apply to jobs near you. Human Resources at Southwest Airlines Yes. And the next question is from Leslie Josephs from CNBC. We got 50% of June booked at this point. The $230 million pot means an average of $4,250 per worker, usually paid out sometime in March. Theyjust revealed what they believe are thetenbest stocksfor investors to buy right now and Southwest Airlineswasn't one of them! That is tremendous progress, and it feels like we're very close to full corporate revenue recovery at Southwest. Yes. Jamie Baker -- JPMorgan Chase and Company -- Analyst. And I'm proud to say that our service in Kansas City is now fully restored the pre-pandemic levels. Yes, we're not overbooking. Please go ahead. Employees Thank you, operator, and welcome, everyone, to our first quarter 2023 conference call. Einfache Unterknfte in Hollenburg selbst& in den Nachbarorten Diverse gehobene Unterknfteim Umkreis von 10 km Eine sehr schne sptmittel-alterliche Kirche im Ort. We are laser-focused on managing ongoing inflationary cost increases, regaining better operating leverage and maintaining our competitive cost advantage. So, we have I would assert the highest-quality economy product. OK. So, I just -- I wish I could give you a -- yes, something to hang on to, but we don't have one, so. How do I think about that? Yes, again, this is the latest. We were just right at restored to 2019 levels in March, which I think is a remarkable accomplishment and I think industry-leading in terms of our ability to get there that quickly. So like Bob said, we have work to do. Thank you, Tammy. And in the context of like a high single-digit growth rate, is the assumption going forward that a lot of these transitory costs are actually going to allow you to have CASM-X decline next year? Airlines A lot of it is continuing to revise for labor accruals as the market changes. So, as Bob covered very thoroughly, the -- what we need to focus on now is solidifying our fleet plan and our capacity plan for next year. I forgot. And also given that the capacity cuts are weighted sort of late in 2023, I think there's more of a variable cost component helping to offset that. No. There's two north-south runways, one left and 19 and right. Our operations team navigated through a stream of difficult weather conditions successfully with no material impact to our network performance. See how working at Southwest Airlines vs. United Airlines compares on a variety of workplace factors. I just want to reiterate that we have a solid plan and our work is on track. We want our aircraft, but -- they've worked very proactively with us on issues we've seen before and on this issue as well. Average Southwest Airlines So, we've got the labor contracts accrued. We maintained solid operational metrics and completion factor. When I look at the second quarter RASM guide, if I add back the $325 million book away from back to Q1, it implies a pretty meaningful deceleration in RASM, at least like versus 2019 levels or maybe less of a sequential uptick in RASM than we typically see 1Q to 2Q. 50% of our aircraft now are 800s or MAXs, which has a 32-inch of pitch. But in truly competitive markets, if the price is equal and if a passenger isn't already led to your brand or your credit card ecosystem, what does Southwest do to attract that first-time buyer? Yes. So we've made a lot of changes to what we do that we can do in the short term, and then we're also working with the FA -- regional FAA in Washington to how we can best collaborate to see what the tolerances are for crosswinds, so we can use a better configuration more of the time. With its revenue decline far outpacing its cost cuts, Southwest Airlines posted an operating loss of nearly $2.2 billion. So, a quick reminder to please keep your questions to one and a follow-up, if needed. So what's the difference now? And how you're looking at that going into the summer travel even. In early March, our first new aircraft with hardware from our new Wi-Fi provider, Viasat, entered revenue service. And there's some trends across the industry where others are making it harder to do business in the managed travel space. Regarding our operational disruption remediation plan, Bob covered that in detail at the JPMorgan conference in mid-March, and that presentation is available on the investor relations website. We don't want 152 aircraft next year. Is there less growth because we're just going to continue this? All salaries and reviews are posted by employees working at Southwest Airlines vs. United Airlines. And so, the costs are there. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. I hope this is the last quarter we hear about it. So yes, we're leading to the customer here. Profit-sharing is one of the biggest financial perks for employees at major airlines, and Southwest Airlines was able to give away a record $677 million in 2019 before the COVID-19 pandemic swept in during 2020 and wiped out any chance of a profit. 72 km westlich vonWien, nur einen Steinwurf von der Donauund den Weinbergen entfernt, wohnen wirnicht nur, sondern laden auch seit vielenJahren zu verschiedensten kulturellen Aktivitten. As an intern, Southwest really made it seem as if you fit in, upper executives and managers were all So, we give them that first experience, and they come back. Southwest Airlines Co employees with the job title Software Engineer Is that something that you focus on? We have new deliveries that are coming now with power on the aircraft. So, we do expect that to be the last quarter with that headwind. We have our ongoing operations modernization plan. So, we have aircraft effectively that we are not producing capacity out of today because the constraint is just pilots. While our technology teams worked quickly to resolve the issue that morning, out of abundance of caution, we temporarily ground stopped the airline. And so, when we run in a north or south flow, that reduces capacity. We've made some adjustments we've -- as a result of the last couple of weeks, we've changed our minimum connect times at Las Vegas while we were looking at changing our December our crew bid to make sure the crew connections are lower. And so, at the time we spoke at investor day, at that moment in time, we were pilot constrained and knew that sometime toward the back half of this year we would flip from pilot constrained to aircraft constrained. We've got a little more inflation here that showed up around maintenance on our 800s. I didn't really understand it. The company is open to feedback to improve with action items. Tammy Romo -- Executive Vice President, Chief Financial Officer. to examine Southwest's current HR practices [Operator instructions] At this time, I'd like to turn the call over to Mr. Ryan Martinez, vice president of investor relations. So we're going to take all the inputs as usual and work with Boeing to come up with a fleet plan that allows for orderly growth. And so, it doesn't help to move around so much up and down year to year to year because it's just -- it's hard to manage that lumpiness or choppiness with the -- you've seen our hiring numbers for last year and the planned hiring numbers initially for this year. I know that that's done by an out-type company, but are you seeing -- is there a shift to vacation packages more or even on your own website? So just great progress on that front. It's a priceless feeling! But back to your original question on kind of are there new patterns in terms of destinations that are emerging from a vacation standpoint, Cancun is very strong. But we -- our second quarter cost here, at least the profile should be pretty fully loaded, so to speak. And with that, I will turn it over to Ryan. If you think about this time last year, what we did is we -- as we did in COVID, we would republish our schedules because demand was so vacillatory. David Slotnick -- Aviation Business Reporter. The airlines founder Herb Kelleher in 1973 introduced a profit-sharing policy that enables the company to share annual profits to its employees. It will be post summer, late third quarter, early fourth quarter. If you look at something like the larger overhead bins -- and again, it's a small sample size. Florida -- into the Southwest, Hawaii Mainland, our Hawaii franchise is performing very well. In the meantime, we are most focused on revisions to our second half 2023 flight schedules to account for fewer aircraft, which Andrew will cover in more detail. Obviously, we produce schedules far are in advance. And so, I think both of those things are at play here. So -- and it's been managing things for a while. And so, then the other structural component that I think has kind of depressed managed business travel for the industry, not for us necessarily, but for the industry is some of these -- just the way consumers work today their home versus office patterns versus remote and some of the digital tools.