I Called Southwest

[ColleenW.]

I called SW to see when the fares for Dec. were coming out and the girl said they don't really know yet, but she thinks maybe June or possibly mid-summer. I asked her if she thought the prices would go up for then amd she said no. SW bought all their fuel a while ago and have enough gas till about 2008. She said possibly just the taxes would go up but not the fares.
I guess I'll wait till they come out to buy ours, as I was getting nervous about when to buy mine. Hope she's right!

Colleen

 

[Cmbar]

Thanks for the info Colleen. I sure hope she is right! Good luck

 

[godwin1995]

We are flying out of Balto. in Dec. too. This is great info.

 

[Mark P.]

Thanks for the info

 

[Goofy22]

Colleen W. ,
Thanks sounds reassuring anyway! Iam getting ancy waiting I'm waiting for Fares starting the end of October flying out and returning begining of Nov! You never know with all these gas increases! Hopefully she's right!
Thanks again! "From one Colleen to another!"

Colleen S.
Goofy22

 

[tessqt]

Thanks for the info, waiting here too!

 

[sarahsmom73]

Patiently waiting too!!!!

 

[NJOYURLIFE]

That sounds like quite a bit of gas..........

Lisa

 

[clkelley]

It's probably the same way they do propane around here. You "buy" a year's worth at a lower rate during the summer, prepaid, then they fill your tank at regular intervals for the next year.

I'm sure SW has just "paid" for their fuel through that time.

Carol

 

[ExPirateShopGirl]

I called SW to see when the fares for Dec. were coming out and the girl said they don't really know yet, but she thinks maybe June or possibly mid-summer. I asked her if she thought the prices would go up for then amd she said no. SW bought all their fuel a while ago and have enough gas till about 2008. She said possibly just the taxes would go up but not the fares.
I guess I'll wait till they come out to buy ours, as I was getting nervous about when to buy mine. Hope she's right!

Colleen

The woman at Southwest was very nice, but very wrong. I work for a petroleum company and you can't purchase pipeline tenders that far in advance. They may have a contract from a supplier, but even if SWA has a contract in place, they will get it at the negotiated spread price over cost at time of delivery. Jet fuel is stored in tanks near each airport prior to delivery into underground tanks assigned to each airline, and they must share storage space and must transfer any fuel to their own tanks within 7 days or be charged an additional fee for storage as it reduces the total number of gallons other airlines may hold there. Same rules generally apply to vehicle fuel, as well...

Now you know why I need a WDW vacation!!!

 

[gw_lit]

The woman at Southwest was very nice, but very wrong. I work for a petroleum company and you can't purchase pipeline tenders that far in advance. They may have a contract from a supplier, but even if SWA has a contract in place, they will get it at the negotiated spread price over cost at time of delivery. Jet fuel is stored in tanks near each airport prior to delivery into underground tanks assigned to each airline, and they must share storage space and must transfer any fuel to their own tanks within 7 days or be charged an additional fee for storage as it reduces the total number of gallons other airlines may hold there. Same rules generally apply to vehicle fuel, as well...

Now you know why I need a WDW vacation!!!

Actually, it looks like she was very nice AND mostly correct! While they don't have all of the jet fuel that they'll need until 2008 on property, they've already negotiated some future purchase contracts for a portion of their fuel needs... called fuel hedging.

This quote is from Southwest's 1st Quarter Earnings report:

"Gary C. Kelly, CEO, stated: "Considering the many challenges our industry continues to face, we are grateful to report first quarter 2005 earnings of $76 million. Our rigorous focus on cost reduction and successful fuel hedging program shielded us from record high energy prices and enabled us to report our 56th consecutive quarter of profitability. For first quarter 2005, we were 86 percent hedged, which reduced fuel and oil expense by $155 million. In addition, we recorded $27 million in "other gains" in accordance with Statement of Financial Accounting Standard No. 133 (SFAS 133), 'Accounting for Derivative Instruments and Hedging Activities.'

"We are 83 percent hedged for second quarter 2005 with crude oil prices capped at $26 per barrel. Based on current market conditions, we expect our jet fuel costs per gallon for second quarter 2005 to exceed first quarter 2005's 90.3 cents. We remain 85 percent hedged for second half 2005 at $26 per barrel; 65 percent in 2006 at $32 per barrel; over 45 percent in 2007 at $31 per barrel; 30 percent in 2008 at $33 per barrel; and over 25 percent in 2009 at $35 per barrel."

 

[jetfxr69]

gw lit.....

thanks for posting the earnings report quote. As a mechanic for SWA I can tell you that although we are VERY well hedged for the next few years, we are not 100% hedged for any year. The unhedged portion of our fuel purchases may cost us more in fuel expense as the price of oil climbs. That being said, as most all of the legacy carriers(AA,UAL,NWA,etc) continue to pay full price for fuel and continue to lose money, they will continue to raise their fares as long as they can get away with it. SWA may have to raise theirs as well, but while the majors may raise a roundtrip fare $20-50 or more, SWA will raise their fares $1-10. We are still striving to be the low cost leader and are not looking to get rich off the backs of our customers. We keep our costs down to provide the best possible price to you all.

Do not be too concerned about future ticket prices for SWA. We cap our most expensive walk up fares at $399 one way. Thats the most you would ever pay even if you walked up to the counter and bought a ticket that day. We have alot of great fares to Orlando, as that is one of our most traveled destinations. Keep watching our website for future schedules. Thanks for flying.