Network optimization allowed us to introduce Southwest’s legendary low-fare service to Panama City Beach, Fla., and grow in key markets like Denver, Boston, and St. Louis.

2010 ONE REPORT  >  Performance

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Our Performance in 2010 marked our 38th consecutive year of profitability—a feat unmatched in U.S. aviation history. We experienced industry-leading revenue growth, record load factors, and market share gains—all without nickel-and-diming our Customers.


Our strong results in 2010 are a notable demonstration of our Employees’ Warrior Spirits in the face of a recovering economic environment and volatile fuel prices. Thanks to their relentless hard work, we were prepared. Our network optimization; enhancements to our revenue management; and an overall rebound in Customer demand, particularly business Passengers, significantly boosted our revenues. We remained true to our low-fare brand, refusing to follow the industry’s efforts to pile on additional fees and surcharges. Instead, we offered Customers a choice in paying more for optional services. As we continued our focus on superior Customer Service, we experienced record load factors in all but one month of the year and grew our market share. We held on to the distinct designation as the largest domestic airline.1 Our cost containment efforts continued to help mitigate operating cost pressures, largely due to volatile fuel costs. Although we had virtually no seat mile growth in 2010, we continued to strengthen our network through optimization, which allowed us to introduce Southwest’s legendary low-fare service to Panama City Beach, Fla., and grow key markets like Denver, Boston, and St. Louis. We preserved our balance sheet strength and financial health, supporting our confidence to chart our exciting course for the next five years and beyond—a course that we believe will allow us to profitably grow Southwest Airlines and achieve our 15 percent pretax return on invested capital financial target.

We achieved another year of profitability by staying true to the core principles on which we were founded—low fares, low costs, and dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company SPIRIT. This passion is what propels us forward to continually improve for our Shareholders, our Customers, our communities, our Planet, and ourselves.

Consolidated Highlights

dollars in millions, except per share amounts

2009 2010 Change
Operating revenues $ 10,350 $ 12,104 16.9 %
Operating expenses $ 10,088 $ 11,116 10.2 %
Operating income $ 262 $ 988 227.1 %
Operating margin 2.5 % 8.2 % 5.7 pts.
Net income $ 99 $ 459 363.6 %
Net margin 1.0 % 3.8 % 2.8 pts.
Net income per share, basic $ 0.13 $ 0.62 376.9 %
Net income per share, diluted $ 0.13 $ 0.61 369.2 %
Stockholders’ equity $ 5,454 $ 6,237 14.1 %
Return on average stockholders’ equity 1.9 % 7.9 % 6.0 pts.
Stockholders’ equity per common share outstanding $ 7.34 $ 8.35 13.8 %
Revenue passengers carried 86,310,229 88,191,322 2.2 %
Revenue passenger miles (RPMs) (000s) 74,456,710 78,046,967 4.8 %
Available seat miles (ASMs) (000s) 98,001,550 98,437,092 0.4 %
Passenger load factor 76.0 % 79.3 % 3.3 pts.
Passenger revenue yield per RPM 13.29 ¢ 14.72 ¢ 10.8 %
Operating revenue yield per ASM 10.56 ¢ 12.30 ¢ 16.5 %
Operating expenses per ASM 10.29 ¢ 11.29 ¢ 9.7 %
Aircraft in service at yearend 537 548 2.0 %
Full-time equivalent Employees at yearend 34,726 34,901 0.5 %

1 As measured by the number of originating passengers boarded and based on data available from the U.S. Department of Transportation as of Sept. 30, 2010.