"Systems of Advantage"

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Angela Vargo

What a wonderful post...you are a true aviation enthusiast and all of us at Southwest appreciate your dedication to this industry. We are so proud of what we do - and taking care of our Customers is what we do best.

Angela Vargo

viinnie mirchandani

Angela, thanks! And appreciate your not puoting about my being nice to some of your peer/competitor airlines...

Jeff Nolan

It's somewhat lost in these critiques of the airline industry, but one major reason why Southwest has remained profitable since 2001 is their very successful fuel hedging strategy which has enabled them to avoid the short term impact of higher fuel costs. For example, in 2005 they were buying fuel under 2001 and 02 contracts.

Of course, all of this is smart strategy and one more reason why Southwest has been perenially successful, but it also points out that success in complex businesses is much more than 'they have a great service' or 'their flight attendants are so cheerful'.

vinnie mirchandani

Jeff, agree - as they say it is very complex to make things look simple...I wrote a note last year about many facets about SW including this hedge - it was aimed at offshore vendors and I suggested they look at hedging strategies around their growing wage inflation...

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