ไม่รู้การบินไทยทำ hedge ราคาน้ิำมันไว้หรือเปล่า Southwest Airlines ขาดทุนครั้งแรกในรอบ 17 ปี
Southwest Airlines posts first quarterly loss in 17 years on fuel charge
10:36 PM CDT on Thursday, October 16, 2008
By ERIC TORBENSON / The Dallas Morning News
[email protected]
The words quarterly loss and Southwest Airlines Co. haven't been put together for more than 17 years, but the Dallas-based company said Thursday it lost $120 million in the third quarter based on accounting charges related to its fuel-hedging program.
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Southwest said its streak of profitable quarters would remain alive at 70, however, if the $247 million related to the accounting charge were removed. Without the "special item," the world's largest low-fare carrier earned $69 million, or 9 cents per share.
Analysts surveyed by Thompson First Call had predicted a quarterly profit of 7 cents a share. A year ago, Southwest had net income of $162 million, or 22 cents a share.
"Our outlook on fuel prices has actually dramatically improved," chief executive Gary Kelly said in an early morning conference call. "The even bigger issue in our world is what is going on with the broader economy."
Southwest's bookings are solid for the rest of the year, and its unit revenue what it earns for each seat mile flown for October is up 14 percent from last year, helped in part by a marketing campaign highlighting its lack of fees compared with its rivals, Mr. Kelly said.
"We're going to have a decent fourth quarter," he added.
After that, it's anybody's guess what demand for air travel will be, and Southwest is preparing for what may lie ahead.
It drew down $400 million of a $600 million credit facility to help weather the storm and will be cutting its capacity as much as 6 percent in the first quarter. It will continue to fly all its 535 aircraft, but will cut some "unpopular" flights at odd times of the day in its schedule, Mr. Kelly said.
Third-quarter revenue grew 11.7 percent to $2.9 billion from a year earlier, and the carrier expects to see strong revenue growth in the fourth quarter as rivals cut their capacity, Mr. Kelly said.
The fuel hedges that have helped Southwest save $1.3 billion this year can also take a bite out of income when fuel prices fluctuate as wildly as they have the past few months.
Oil traded at below $70 a barrel Thursday, and the value of the airline's fuel hedging positions had to be written down, according to accounting rules.
It's the same accounting rule that has put a lot of banks in trouble with mortgage assets, and it has stung other carriers that bought fuel at prices well above today's spot market. Nevertheless, Mr. Kelly said he's not at all concerned about his carrier's hedges going forward or his ability to manage the airline's finances.
Neither is analyst Jamie Baker of J.P. Morgan, who said in a note to investors Thursday that because Southwest's cash on hand dropped in the quarter, the result was "a liquidity situation that is worse than we expected but certainly not fatal." He expects Southwest to easily exceed his fourth-quarter earnings estimates, though future quarters are murkier.
Southwest's third-quarter fuel bill rose 44 percent to an even $1 billion, pushing its costs up 20 percent over the previous year. The outlook for its unit costs isn't going to get better as Southwest slows its growth in the current quarter to 1 percent and prepares to cut capacity in January.
"Now is not the time to be growing capacity," Mr. Kelly said. "I'm comfortable that we're making just the right moves at the right time."
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