ReluctantEskimo

$2.5B in stock buybacks while slashing the operation.

I wonder if that was part of the "difficult decisions" made.

REF 5

After watching, listening to the presentation, as well as the Q&A(which to me is the good stuff), it seem's they have a plan. Since SWA moves at the speed of a tortoise, most of this stuff is nothing new to the industry. Code sharing? Assigned seating? Premium? Red eyes? Those are a natural progression's of an airline that's never had any of this. So I'm glad it's moving. So no assign seating till 2026. So all next summer the misery will continue. Even if EM is successful in booting management, these initiatives probably won't change much. So the next CEO may tweak it but all those concepts will stay. That's the direction the airline need's to go regardless who's in charge.

Since they don't even expect any free cash flow till 2026, those stock buy backs that the BOD authorized, is a two year story at the earliest. Just headline cat nip for Wallstreet. SWA had two options when it comes to the Boeing orders. Defer or buy. Since they have heavy discounts and credits, it makes sense to squeeze some cash out the fleet to maximize it. We are going to have excess airplanes, so why not? Help's keep a net cash position. Helps with the precious cash flow. They still plan on being a 100% max fleet by 2031. GTF engines are a bigger issue IMO then Boeings problems. Even Ed Bastian of Delta admitted as much. Their is a lot demand for narrow bodies. This is not something new for SWA. All those 717's that Delta got from SWA, those leases are owned by SWA. The lease payments that Delta pay's every month to SWA roll's right into the all those lease payments of the 7800 birds that are flying.

EM says that BJ lacks the vision and capability to execute this. So they don't necessarily disagree with some of the idea's but think BJ can't make it happen. So the next guy that comes in will make much of these idea's real, add to the cost cutting of 500 million that they outlined. Almost 1900 employees(non flight ops) have taken a LOA or work less hours according to the presentation. Guarantee you that a new CEO will pink slip them, as well as close the ATL base. Alot of rumors were abound that SWA would go full hub and spoke. Looks like it's not. I bet though EM wants SWA to look like the network carriers.

ReluctantEskimo

It's always baffling to see people defend the people who actively out to make their lives worse.

Buybacks used to be illegal for good reason. It's nothing but a way to artificially pump the stock by using your hard earned revenue to do it.

Proximity

Change continue to "intensify".

Cosnider that half the airplanes out there by next summer will have the new cabin configuration, but we will still have open seaeting. What could go wrong?

WHACKMASTER

Talk about shameless, huh?

Cyio

Yeah, I was wondering about this as well. I guess the "Jetway Jesus" crowd will have our version of first class for one more year. I foresee ****ed-off A-Listers for sure.

Mozam

That's rich. SWA is more like sears, JCPenney's or red lobster . It must be nice to live in the naïve world that you live in.

5tools

You are exactly right!! A lot of these idiots on here dont have clue about business. Their like arm chair QB's yelling at the TV, but never played the game not even at the PEE WEE level. But they will be complaining the loudest and crying like little babies if EM is successful in getting it's people in here at SWA. That's why some of them are still crying because they got thrown under bus by ALPA when SWA bought AT but somehow that was SWA fault too.


"In some cases, a leveraged buyback can be used as a means to fend off a hostile bidder.2 The company takes on significant additional debt to repurchase stocks through a buyback program. Such leveraged buybacks can be successful in thwarting hostile bids by both raising the share value (hopefully) and adding a great deal of unwanted debt to the company's balance sheet."

PackFan1

Then we need to ban dividends as well if that's the case. It's effectively the same thing, minus the tax consequences.

ReluctantEskimo

Dividends don't manipulate the share price.

If you want to shovel money to the shareholders, at least it's on the level. Either case, slashing and burning your route structure while rewarding wall street is a Gordon Gekko move.