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Performance Measures: Southwest Airlines Compared to All Low-Cost Carriers

Performance Measures: Southwest Airlines Compared to All Low-Cost Carriers

First Quarter 2007

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  Southwest Low-Cost** Carrier Average Southwest's 2007 Rank Among 7 Low-Cost Carriers Comment
Measure 1: System Operating Profit/(Loss) per Originating Passenger in Dollars $4.13 $3.06 3 America West was the leader among low-cost carriers with over $15 profit per passenger. Spirit, Southwest and AirTran also reported profits. Frontier, JetBlue and ATA reported operating losses per originating passenger.
Measure 2: System Operating Expenses (excluding Regional Jet Contract) per Originating Passenger in Dollars $104 $127 1 Operating costs per originating passenger for low-cost carriers increased mainly due to double-digit fuel cost increases and higher wages for a maturing work force.
Measure 3: System Operating Expenses (excluding Regional Jet Contract) per Aircraft in Millions of Dollars $4.351 $4.608 2 The low cost carriers' spent 2.2 million less per aircraft than the network carriers in the first quarter of 2007, even though their costs rose faster over the past five years.
Measure 4: Passenger Revenue per Originating Passenger (excluding Regional Jet Contract Revenue) in dollars $101 $121 7 Low-cost carrier revenue per passenger rose 13 percent from 2002 to 2005 and 3 percent from 2005 to 2007. The low-cost group was very aggressive in adding new domestic capacity.
Measure 5: Full-Time Equivalent Employees* per Aircraft 68 73 3 The industry showed a wide-range of performance, with AirTran's 59 FTEs per aircraft, the fewest of any carrier, about half the 113 FTEs reported by United.
Measure 6: Average Monthly Available Seat-Miles (ASMs) per Full-Time Equivalent Employee* in millions of ASMs 241 235 4 Both the network carriers and low-cost airlines substantially improved productivity with more ASMs generated per FTE from 2002 to 2007.
Measure 7: Average Monthly Revenue Aircraft Minutes per Full-Time Equivalent Employee* in Minutes 256 238 2 The network carriers improved by 31 percent but the low-cost carrier group has a wide advantage over the network airlines in average monthly revenue air minutes per FTE.
Measure 8: Average Monthly Originating Passengers per Full-Time Equivalent Employee* 207 166 2 In 2007, the low-cost carriers generated 166 originating passengers per FTE employee compared to 69 passengers per FTE for the network airlines.
Measure 9: Fuel Cost in Dollars per Originating Passenger $30 $38 1 The low-cost group paid $55 less in fuel costs per originating passenger than the network carriers in 2007.
Measure 10: Average Full-Time Equivalent Employee* Compensation (Salaries + Benefits) per Originating Passenger in dollars $40 $41 5 The financially stronger low-cost carrier group's compensation expenses increased a modest $3 per originating passenger, reflecting wage increases for the group's increasingly senior work force partially offset by sustained operational efficiencies.
Measure 11: Average Annual Full-Time Equivalent Employee* Compensation (Salaries + Benefits) in dollars $98,654 $81,221 1 From 2002 to 2007, low-cost carrier annual compensation costs rose 43 percent while network airline costs declined 0.8 percent.

Source: Bureau of Transportation Statistics

* Full-time Equivalent Employee (FTE) calculations count two part-time employees as one full-time employee.

** Low-cost carriers are those that the industry recognizes as operating under a low-cost business model, with fewer infrastructure costs and greater expectations of productivity.

*** Network carriers operate a significant portion of their flights using at least one hub where connections are made for flights on a spoke system.