Southwest Airlines' CEO Hosts 2013 Annual Shareholder Meeting (Transcript)

| About: Southwest Airlines (LUV)

Southwest Airlines Co. (NYSE:LUV)

2013 Annual Shareholder Meeting

May 15, 2013 11:00 am ET


Gary C. Kelly - Chairman, Chief Executive Officer, President and Chairman of Executive Committee

Mark R. Shaw - Vice President, Corporate Secretary and General Counsel

Gary C. Kelly

Good morning. Good morning, everyone. I would hate to start early, so we'll wait just a minute or 2 until 10:00. Thank you, all, for being here. I don't want you to leave before the official meeting.

Well, again, good morning. Thank you, all, for being here. Welcome to the Southwest Airlines 2013 Annual Meeting of Shareholders. I'm Gary Kelly, Chairman of the Board, President and CEO of Southwest Airlines.

Before we begin, if you've not read the rules of conduct that were provided to you before the meeting, please take a minute to do so. Now, these are the rules we will follow this morning.

The meeting will now come to order. Before we address the official business of the meeting, I'd like to take this opportunity to make a couple of introductions, especially the members of our Southwest Board. And as I call your name, if you all would please stand. Dave Biegler, Veronica Biggins, Doug Brooks, Bill Cunningham, John Denison, Nancy Loeffler, John Montford, Tom Nealon and Danny Villanueva, thank you, all, so much for your service to Southwest Airlines.

Next, I'd like to introduce our Executive Vice Presidents, Bob Jordan; Jeff Lamb; Ron Ricks; and Mike Van De Ven. And with the rest of the Southwest officers present, please rise and be recognized, and thank you, all, for your service to Southwest Airlines.

Now we are also privileged to have Herb Kelleher and Colleen Barrett join us today.

Now for the formal business of the meeting. At the table to my left is Mr. Paul Ramirez. He's been appointed to act as Inspector of Election on behalf of Broadridge Financial Solutions. If you're a registered shareholder and have not turned in your proxy card, you may submit your proxy card to Mr. Ramirez at this time. If you're a registered shareholder and wish to vote in person, we will be distributing ballots shortly. I would now like to introduce Mr. Mark Shaw, who is our Vice President and General Counsel and Corporate Secretary of Southwest Airlines. And Mr. Shaw will report on some formal matters related to the holding of this meeting.

Mark R. Shaw

Thank you, Gary. I've received an affidavit of distribution from Broadridge certifying that the notice and other proxy materials for this meeting were distributed to our shareholders, commencing on April 5, 2013. The list of our shareholders of record is at the Inspector of Election's table to my left and will be kept open during the meeting for inspection by any shareholder. The list has also been available for inspection at the company's offices for at least 10 days prior to this meeting. In addition, the Inspector of Election has signed an oath of office, and has determined that the holders of 658,868,054 shares, which is more than a majority of the shares entitled to vote at this meeting, are present in person or by proxy. This is sufficient for a quorum to conduct business.

Gary C. Kelly

Thank you, Mark. I declare that this meeting is duly constituted and convened. As stated in the notice of the meeting, there are 4 proposals to be voted on today, each of which it is identified in the agenda. Proposal 1 is the election of directors for 1 year terms; proposal 2 is advisory vote to have approve named executive officer compensation; proposal 3 is approval of the Southwest Airlines company amended and restated 1991 Employee Stock Purchase Plan; and Proposal 4 is the ratification of the selection of Ernst & Young LLP as the company's independent auditors for the fiscal year ended December 31, 2013.

Each of these proposals is discussed in detail in the proxy statement.

Regarding proposal #4, ratification of the selection of Ernst & Young as the company's independent auditors for the fiscal year ending December 31, 2013, Mr. Bill Guess, our audit partner; Mr. David Heseltine, our former audit partner; and Mr. Brandon Rowland, our Assurance Senior Manager, are present. They're available to respond to appropriate questions.

Ernst & Young also served as the company's independent auditors for fiscal year 2012. Mr. Guess, Mr. Heseltine and Mr. Rowland may all or individually make a statement at this time if they so desire.

You're kidding, no statement? Before we take the vote on the proposals, are there any questions in the audience for Ernst & Young?

Hearing none, a vote on all of the proposals will be taken at this time. I hereby declare the polls open for voting. If you're a registered shareholder or hold a proxy for a registered shareholder and would like a ballot to vote in person, please raise your hand. If you've already voted by proxy and do not wish to change our vote, you will not need a ballot. Is there any registered shareholder or proxy present who desires to vote on any matter before this meeting, and who has not signed and handed in his or her ballot? Do we need to collect those ballots?

Unknown Executive


Gary C. Kelly

Everyone finished voting? No? Any other votes to be turned in? It appears that all voting has been completed. I hereby declare the polls closed. Mr. Shaw, will you please report on the preliminary results of the voting?

Mark R. Shaw

Yes, Mr. Chairman. I have the preliminary report of the Inspector of Election. With respect to proposal 1, each of the 10 director nominees has received a majority vote in favor of the election, which means this nominee for director has been duly elected. With respect to proposals 2, 3 and 4, each of such proposals has received a majority vote in favor, which means that each of such proposals has passed.

Gary C. Kelly

Thank you. The final results will be reported by the company on Form 8-K. There being no further business to come before this meeting, I declare this Annual Meeting of Shareholders adjourned. Before I open the floor for questions, I'll give a quick business update.

Beginning with 2012. 2012 was a year of significant accomplishments for Southwest Airlines. It represented our 40th consecutive year of profits. And in an industry where every single legacy airline has gone bankrupt, it is a remarkable record. Further, Southwest Airlines maintains an investment-grade credit rating, the only U.S. airline to maintain such a distinction, and we've had that rating for over 30 years. We have solid revenue growth in 2012 that reached record levels. We earned strong cash flows from operations that allowed us to pay down $578 million in debt and capital leases; repurchase $400 million worth of Southwest common stock; and increase the quarterly dividend 122%.

Shareholders have been rewarded. As of yesterday's closing, Southwest common stock is up 37% year-to-date, and 74% from a year ago. We're in the midst of executing a 5-year strategic plan, and we made great progress in 2012. We develop the capability to operate multiple fleet types, and then took delivery of our first 737-800. And as of today we have 43 737-800s in our fleet.

We launched a 2-year effort to implement a new international reservation system with Amadeus. We began the first of a series of efforts to modernize our fleet by retrofitting the 737-700 aircraft with new Evolve seating. Our results from the first full year of our All-New Rapid Rewards frequent flyer program were superb. And finally, we made tremendous progress with the integration of AirTran into Southwest Airlines.

Southwest added 6 AirTran cities last year. We received a Single Operating Certificate from the FAA just 10 months after the acquisition. We completed all Southwest and AirTran union workgroup seniority list. We converted 11 AirTran 737s into Southwest, and we reached an agreement to lease and sublease the entire AirTran Boeing 717 fleet to Delta.

These are just the highlights, and that was, of course, a very busy, but a very, very successful year. All this was accomplished, while still earning the top spot in customer satisfaction with the U.S. Department of Transportation, while posting a very reliable 83.1% on-time performance, and while recording the best baggage handling in Southwest Airlines' history.

Over 99.5% of our customers bags were handled perfectly, and the first 2 bags fly free, by the way.

We're very excited about 2013. Work on our strategic plan continues with the published connections of the AirTran and Southwest route networks, our #1 priority for 2013. That sets the stage for us to achieve planned annualized synergies of $400 million pre-tax in 2013.

The route network connections work has already been completed on schedule, and I'm very, very pleased with the initial results from the new itineraries.

while we have numerous other revenue initiatives underway, this one is the most important.

AirTran city and aircraft conversions are also planned for this year. And along those lines, on April 14, we opened a record number of new Southwest airports, including, for the first time in our history, service beyond the 48 states to San Juan, Puerto Rico. With our recent announcement opening our November 2013 schedule, we will have Southwest service in all domestic AirTran locations, further setting the stage for the final conversion of AirTran into Southwest next year.

In total, Southwest will add 11 AirTran cities this year and 8 international AirTran cities next year.

Regarding AirTran 737 fleet, we plan to convert 8 aircraft to South West this year. The remainder of AirTran's 737 fleet will continue flying AirTran's international routes until that capability is ready at Southwest, which will be next year.

With respect to managing our cost for available seat mile, we'll complete the retrofit of the Evolve interior this year, and we'll continue receiving and deploying the larger, more cost-effective 737-800.

Along with other fuel conservation initiatives and a well hedged fuel price, we currently enjoy a favorable cost outlook for this year as compared to last year.

Our 2013 financial plan matches our goal of a 15% pre-tax return on invested capital, and our first quarter reported last month was a net profit, excluding special items, of $53 million at $0.07 per share. That was in line with our plan. That was much improved from last year's modest loss. And the best first quarter, excluding special items, that we've had in 7 years, despite the fact that we had near record fuel prices.

Our traffic and revenue trends were quite stable since September, October of last year until March.

We saw some softness in March, more in April, but seat trends improving in the May, June time period. We are keeping of very wary eye on the economy with particular attention to the potential effects on travel from broad federal tax increases and broad federal budget cuts.

But fortunately, we have a number of Southwest-specific initiatives on tap for 2013 that should help mitigate weakness in demand attributable to the broader economy. Barring any unforeseen surprises, we expect a strong second quarter performance. And given that -- and given our financial plan for 2013, we have several announcements this morning.

As we did last year, today, our Board of Directors announced an increase in our quarterly dividend to $0.04 per share, as compared to our previous quarterly dividend of $0.01. And for those of you trying to do the math, that's a big increase.

Based on yesterday's closing price of $13.98 of Southwest common, this represents an annual yield of approximately 1%, and an annual spend rate of about $100 million.

The board also announced an increase in our share repurchase program of $500 million, which brings us to a total authorization of $1.5 billion this year. To date, $100 million has been be purchased, and that brings our total repurchases since August of 2011, under this program, to $725 million.

So the remaining authorization is $775 million. That will include $250 million, pursuant to an accelerated repurchase program.

Since the share repurchase program was authorized in August of 2011, the company has reduced shares outstanding by 10%.

Next, today, we're announcing a restructuring of our aircraft purchase agreement with the Boeing company, including the launch of the 737 MAX 7 aircraft, and that will be in 2019. That is designed to replace the current 737-700 model aircraft, which has 143 seats in the Southwest configuration.

As part of the restructuring, we're relinquishing 10 delivery options for 737 NGs, that stands for next generation, that's the current 737 model. Those options are for 2014 and 2015, so we're relinquishing those.

We are also deferring 41 737 NG delivery options from years 2014 through 2018 until after 2024. These deferred options will all be converted to the new 737 MAX.

We're also deferring 30 Boeing 737 NG firm orders from 2017 and '18 to 2019 and '21, and also converting those to the 737 MAX 7.

All of this, by the way, will be in the press release, so you don't have to memorize it.

And then finally, 5 737-800 delivery options have been exercised for 2014 delivery, and 5 2014 firm orders have simply been converted from the -700 to the -800.

So this restructuring accomplishes a lot. First of all, it will save us more than $500 million in capital spending for firm orders over the next 5-plus years through 2018. It also pushes nearly $2 billion of option aircraft spending beyond the year 2018.

It's consistent with our objective to efficiently and aggressively manage our invested capital, and on the heels of last year's deferral of $1 billion in capital spending for the years 2012 to 2014. This restructuring is also consistent with our fleet modernization efforts. And to that end, note that we are retiring more than 100 Boeing 717 and 737 Classic aircraft in 2013, '14 and '15.

So we have an objective to maintain our fleet at a roughly flat level. We'll augment our Boeing purchase contract with attractively-priced, pre-owned 737 NG equipment. Thus far, we've agreed to purchase 10 pre-owned 737-700 aircraft for delivery in 2014 and '15, and we will continue to monitor the pre-owned market for attractive opportunities.

So given our restructured Boeing agreement, our flexible aircraft retirement schedule, our access to the pre-owned 737 market, and the wind-down of our own aircraft conversion process in 2014, '15, we believe we have ample opportunities to maintain our fleet and also, to grow our service or in-service fleet in 2015 and beyond, should the right opportunities arise.

Our balance sheet and liquidity remain strong. Based on current trends, our capital deployment plan in a positive cash flow outlook, we're comfortable with a targeted liquidity of $3.5 billion, and that includes our fully available $1 billion line of credit. All of this is being accomplished by the way, as our debt to total capital is estimated to continue to fall, and by year end, about below 40%.

We have very exciting opportunities that are materializing over the next several years. First, of the launch of the international flying at Southwest Airlines next year. Second is the repeal of the Wright Amendment restrictions in and out of the Dallas Love Field next year. And third is the construction and the deployment of new international facilities and service in and out of Houston's Hobby Airport in 2015.

And these are but a few of the many exciting opportunities ahead. I'm very excited about 2013, and I'm very excited, of course, about Southwest Airlines' future.

I want to be sure and tell you how proud I am of the Southwest Airlines people, of the AirTran Airlines people, I want to thank them, again, for their extraordinary job in navigating very difficult storms, especially over the last 10 to 12 years, without losses, without layoffs, without pay cuts. They are the best, and that's why they have the best, and that's why I'm very confident in our plan to continue to provide the best for our shareholders.

Thank you, all, very much. At this time, we would be very pleased to entertain any questions that you all have.

Question-and-Answer Session

Gary C. Kelly

Yes, sir?

Unknown Analyst

First of all, thanks for increasing the dividend. They appreciate that. Just had a quick follow-up question for the other one, more about your mentioning of repurchasing stock. First of all, it looks like you had operating income last year of $838 million, and you're repurchasing $500 million or so in stock. I understand these are apples and oranges, but basically, could you just comment on whether this affects, really, the financial ratio? And then secondly, I'm sorry, does it affect any of our cash positions in a negative way? Okay? And then, secondly, on the terms of deferring the purchase of planes, does that have an effect on the overall average age of our fleet?

Gary C. Kelly

Yes, sir. We're managing our cash to maintain total liquidity of a minimum of $3.5 billion that would be split between a fully available line of credit of $1 billion. We've just passed several months -- past month, we increased our line of credit to $1 billion, which means that we would want to maintain no less than $2.5 billion in cash and short-term investments. So that will be a driving factor. The other guidepost that I would offer is that we don't want our share repurchases to exceed our annual net income, and they do not and did not, so that will be another guidepost. While our operating income last year was in the $800 million range, I just don't have that right in front of me. But our operating cash flow was far stronger than that. So there are a number of noncash items, in other words, it reduced that income number. But our operating cash flow was well over $2 billion. Our target is to have free cash flow every year, which is a Southwest-defined term, that simply means after we take into account spending for capital items, we want to make sure that we have plenty of cash left. So it is that available free cash flow that we will be targeting to use for enhancing shareholder value through dividends and through share repurchases. Share purchases, of course, we'll do as we can afford to do. And our point is, we have been in a very strong cash position to be able to reward shareholders, and we intend to continue to do that. With respect to the aircraft, we have a very young fleet. The average age of the fleet, Brian, I think, is somewhere around 12 years.

Unknown Executive

[indiscernible] 8 or 9 years.

Gary C. Kelly

Oh, It's 8 or 9 years. So we'll be managing it to maintain that fleet age in that range. I would say that the equipment that we're looking at on the preowned market is very young, very low utilization aircraft. And it would be roughly that same average age, by the way. So we'll definitely want to continue to maintain a very reliable fleet. The other thing I would mention here is that the Max aircraft will be far more economical than the current airplane. So we would much rather buy the new airplane if we had -- if we have the choice. That airplane won't be available, of course, until after 2017. So part of our logic here is to buy a very good airplane that might have a 10 to 15-year remaining use for life, so that it could be replaced more quickly with a Max aircraft thereafter. And then, finally, there's just a lot of work going on in our fleet to integrate AirTran into Southwest Airlines. There a lot of airplanes that we will be retiring, and there a lot of airplanes that we'll be converting. So will probably increase the number of aircraft in the maintenance process, if you will, by '20. And we just need a temporary method of replacing that flying until we complete the whole AirTran integration process, which, again, will be, from an aircraft perspective, will be in 2015. Yes, sir?

Unknown Shareholder

Mike [indiscernible]. Stockholder, bondholder, and an A-list member so I think you can understand why I follow the company.

Gary C. Kelly

Yes, sir.

Unknown Analyst

First off, I want to compliment you, sir, on your presentation on CNBC about 1.5 weeks, 2 weeks ago, as you are proud of many of the Southwest Airlines' crew members, et cetera. I was very proud of you and how you handled the questions, the answers and very diplomatically but firmly when was addressed about the furlough questions of the FAA people, how well you handled them and suggested that, perhaps they needed to rebate some of the money to the airlines, including us.

Gary C. Kelly

They didn't see it my way, by the way.

Unknown Analyst

They did not, but the observant viewer had no question where you stood on the issues, sir. The question that I have is as I do some flying with Southwest Airlines, it seems like the biggest retardant are the blue suitors under the rubric of TSA at airports that seem to make flying a most unenjoyable experience at times. Have we, as a firm, as in an airline done anything to perhaps, promote a little more streamlined process, and I appreciate your time.

Gary C. Kelly

I think the short answer is yes. Herb Kelleher personally in the day -- in the early days after 9/11, spent a lot of time working with the government on how to best serve customers and fulfill its mission to ensure that there are no terrorism advanced on an airplane, and that is the mission of TSA. I think we all have to respect that there is that threat, and we all have to, I think, be proud of the fact that they've done that mission quite well. I think there are always opportunities to improve the customer service aspect. They are human beings, and there are mistakes that are made. But I, at least, feel comfortable that the TSA cares about improving and really, focusing on identifying the right risk. I would tell you that our trade association, Airlines for America, meets with the TSA directly and the top leaders within the TSA, generally, every single time we have a meeting in Washington, and usually that's 4 times a year. So there is a good exchange of ideas. I think Herb would attest to the fact that they are responsive. Do they do everything that we suggest? No. But we have been carefully monitoring this whole sequestration to see if there have been cuts in TSA. And at least, I think, our folks have reported so far the resources seem to be there to process the lines. It will be up to the federal government to decide how they want to identify security risks and what procedures that they want to do. So in the end, as you as you understand, we don't have any authority over that. But I think the essence of your question is, is there a dialogue? And, yes, sir, there is. I, for one, feel like they're trying very hard to do the mission and feel like they're doing it pretty well. Yes, sir?

Unknown Analyst

Given that the case for Southwest Airlines is as positive is it's been in years, is the buyback cast in stone? If the stock runs up, do you still buy the shares? Do you see my question?

Gary C. Kelly

Yes. Absolutely, Chad.

Unknown Analyst

Maybe the public will buy and sell Southwest.

Gary C. Kelly

Well, I think that -- they're -- as, of course, you well know, there's a difference having a dividend and a share repurchase. We do approach the share repurchases in a flexible way. We want to make sure that we can afford them in a right economic circumstances and the right profit circumstances for Southwest, which ties in with the gentleman's question earlier. So that will be a factor in our decision to complete the share repurchase authorization. And then a component of that has to be the price. I don't think that we want you to believe that this is a route program that we will simply just go out and buy shares every single day, no matter the circumstances. I won't comment on what price we think is right or not, but certainly, we wouldn't be announcing a share repurchase today if we weren't willing to get out there and buy some shares at these prices. Yes, ma'am? Good to see you.

Unknown Shareholder

[Spanish] Mr. Chairman, Board of Directors, my fellow stockholders, I'm Jane Garcia from Detroit, not only a stockholder, but a great, wonderful customer of you all, because they are wonderful. I go all over the country, and my husband always says, "Can we fly Southwest?" Because he just loves the entertainment on the plane and the great service. Well, I'm here from Detroit. I'm attending the National Fair Conference in Fort Worth, so I've been here a couple of days. I'm here to thank you, Christine Ortega, who also gives a great back to the community, very much the Board of Directors that give back so much to the communities across this nation. We're very biased with Daniel, but I just think it's very important that we come here and thank you for what you've done for the military, for what you've done for the national organizations. Giving back to the community is very important to me as a social worker, from a very tired but great city like Detroit. So I, here -- come here basically to thank you, all, for your service, for giving back, Mr. Chairman. We are very grateful to all that you do for this community. [Spanish]

Gary C. Kelly

It's always great to see you every year so thank you so much.

Unknown Shareholder

My name is Howard Ratliff, and I'm a shareholder. One question regarding the integration of AirTran and the positioning, as far as types of new customers or clients that you'll be attracting with this addition of AirTran into the Southwest fleet. And my question is whether the branding and the marketing of Southwest is going to pretty much remain the same, as the dynamics will change, based on more business or more pleasure vacation-type traveling, and what your strategy is going forward on that?

Gary C. Kelly

And that vision is pretty much set several years ago, and we're simply following through and executing against that. The Southwest brand will survive, as you know it and love it today. Southwest carries more customers in the U.S. than any other airline. Combined with AirTran, we serve about 25% of the U.S. market. Of that, we have a very substantial number of business customers who fly Southwest, in addition, of course, to consumers and people that are flying on their own nickel for fun and for leisure. I would estimate that about 35% to 40% of our customers fly Southwest Airlines for business. Interestingly enough, AirTran is much smaller. When we bought them, they were about 1/5 the size of Southwest. They have a very small proportion of their customers who fly AirTran for business. So they are much more heavily weighted towards leisure. The combination of adding those flights and converting them to the Southwest brand should drive most business travel travelers on those previous AirTran routes, and still preserve our low-cost structure. AirTran is a very low-cost airline. Believe it or not, we've identified opportunities to actually reduce the operating cost of AirTran once it's integrated into Southwest, so that we can preserve that low-cost and preserve that low-fare brand. To date, or at least through the end of this year, we will have converted 19 aircraft from AirTran into Southwest, along with a similar number of their employees to operate those flights. We have a fairly significant number of AirTran employees who will convert into Southwest this year. And the way to think about it is, by the first of next year, all of the airport personnel will be Southwest employees, and whether they are serving an AirTran-branded flight or whether they are serving a Southwest-branded flight. The -- to complete the full integration, which is targeted for the end of 2014, the main thing that has to be accomplished now is international. AirTran has international routes. They have the reservation system capability to do that. Southwest does not. That work is underway at Southwest, and as soon as that is done, then the remaining airplanes can be converted. The airports can be converted, and the employees will all transfer over. So really, we're -- not for that, we would probably have the AirTran brand gone sooner. Southwest has open seating, as you know, single-class service. AirTran has a little bit different operation there and a different mix of fares and fees. But when all of that is done and converted, it will be Southwest again, as you know and love it. Any other questions? Yes, indeed, there are. Yes, ma'am.

Unknown Analyst

[indiscernible] If I book a trip on AirTran today, do I get miles from Southwest?

Gary C. Kelly

If you book a trip on AirTran today, will you get miles on Southwest?

Unknown Analyst


Gary C. Kelly

Effectively, yes. Because you're able to use -- it will actually be the AirTran program until AirTran completely winds down. But you'll be able to use your AirTran program points on a Southwest flight. And again, when this integration is completed next year, the AirTran program will go away, and your AirTran points will simply be transferred into the Southwest system at that point in time.

Unknown Attendee

Thomas Box, Irving, Texas. I have a question concerning marketing. I saw 2 words in the same sentence recently, it was Southwest and Alaska. Could you expand on that?

Gary C. Kelly

Well, I assume you're talking about the state, as opposed to the airline. Our vision for Southwest is to become the world's most flown and most loved and most profitable airline. And we're starting that from a base of, I think, having achieved a lot of that already in the United States. And the United States is one of the largest travel markets, if not the largest travel market in the world. Well, we are preparing ourselves to expand beyond the 48 states. We're already flying to San Juan, Puerto Rico, as I mentioned. Southwest was built to serve the 48 states, so it is different to fly to San Juan, it's different to fly to Hawaii. Probably fly to Alaska with the previous capabilities that Southwest had. But we want to -- we want to set our sights on expanding to all of North America, assuming that the profits are there to support that growth. That's a major predicate. And the 737 will do that mission. So again, as you know, Southwest, we are devoted to a single aircraft type. The beauty of 737 is its versatility. It will make it to -- all of these points in North America, it will actually do the mission all the way to the Northern tier of South America. There are tremendous growth opportunities beyond the 48 states just in North America. And that's what we have our sight set on. So Alaska fits into that, and hopefully, one of these days, we'll plant that Southwest flag in Alaska, along with a number of other points in North America, that's our goal.

Unknown Analyst

My question is in regard to the corporate culture, integrating the new airline into Southwest Airlines. Does management have plans to, I don't want to say, brainwash, but welcome the new employees into the Southwest Airlines family? Being -- as it's such a unique culture. I think there's a danger of losing so much.

Gary C. Kelly

I think the very quick, very straight answer is of course. And I would say it's not really planned, but that work has long been underway and is well underway. You never know how employees of an acquired company will react when they hear the news that they're going to leave the real company and go to the new. What I can tell you is that almost unanimously, the AirTran employees have embraced the idea of coming to Southwest Airlines. It's not all about money, but Southwest Airlines is the best -- is industry-leading in terms of its pay. Has never had a furlough, has never had a pay cut. There's no other airline that can make those kinds of claims. So just from the economic standpoint, there is much to look forward to in coming to Southwest. We are famous for our culture, and most people long to be a part of that kind of a team, that kind of a company, and we call it a family. I've heard all kinds of anecdotal remarks about how much -- how warm and welcoming it is to join the Southwest family. So I don't think it's that hard, because culture comes from within individuals. And as long as individuals want the culture to be something great, it will be. And that's what you've got at Southwest Airlines. Another way to think about this is you've got thousands of people that will be joining in a relatively short period of time who can't wait to be here, it will actually inject new life into the culture, and we find that all the time. We have candidates lined up out the door when we post openings for Southwest Airlines because they want to be a part. They want to be treated the way that we treat people at Southwest, and it really allows people to flourish. Culture's always going to be strong at Southwest because of the people who are here and the people that want to be here. And yes, our leaders are doing a tremendous amount that you would hope, from a program perspective, to spend time and make sure that our employees are on boarded, to use your term, and are welcomed warmly into the Southwest Airlines, far more than any other company would do. Is there any -- another, Eduardo [ph]? Any other questions? Yes, ma'am, please?

Unknown Attendee

[indiscernible] at the debacle of the cancellations. Channel 4 interviewed a woman at the airport, and she said, "30 more minutes, 30 more minutes." I whipped out my iPad and got a flight on Southwest. And I thought, "Yay!"

Gary C. Kelly

I'll second that. Thank you, all, for being here this morning. Congratulations on the dividend and on the share repurchase, and here's to another great year at Southwest Airlines. Thank you, all, again for your support.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to All other use is prohibited.


If you have any additional questions about our online transcripts, please contact us at: Thank you!