Example-Southwest

Example-Southwest - Southwest and American Airlines Page 1...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Southwest and American Airlines Page 1 Table of Contents Section Page I. Analysis on CEO Letters……………………………………. . 2 II. 4 III. Financial Analysis……………………………………………. 7 IV. Current Events………………………………………………. .. 13 V. Audit Report Type……………………………………………. 14 VI. Career Prospects……………………………………………… 12 VII. Conclusion……………………………………………………. 15 VIII. Appendix……………………………………………………. .. 16
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Southwest and American Airlines Page 2 Section 2: Analysis on CEO Letters Southwest has an optimistic outlook on their operations in the near future. The CEO of the company appears to be more than pleased with the hedging activities of the company, which resulted in a net savings in fuel costs of almost $900 million. American too had a successful hedge in 2005, just not the phenomenal success that Southwest managed to achieve during a year of major jet fuel price increases. American CEO Gerard Arpey believes in the earning ability of the company, that with consistently solid revenues, the company will fight its way back into sustained profitability. However, the CEO still cites that stubbornly high fuel costs remain to be a major obstacle for the business and both companies stress the need for higher levels of efficiency and lower over-all operational costs. There was optimism in either CEO, and American recently released earnings report for the 2 nd quarter of the current year – 2006. American just recently realized a $291 million dollar profit according to its quarterly results, when the 2005 annual report was filled with gloomy statements such as persistent factors limiting revenue growth and, ultimately, profitability. Interestingly, Southwest CEO is stringent in meeting pension fund obligations, revealing that $22 million was paid out to its pension fund, bringing the total annual contribution to $310, sending out a strong signal that American is not backing out to provide support for its employees. In 2005, the CEO also commended the 2% decrease in unit costs excluding fuel and special items, a testament to the Turnaround Plan launched since the start of the revenue environment degradation. The savings generated through collaborative efforts has lowered costs and, for the first time since the year 2000, the company managed to secure an operating profit excluding special items. American’s CEO still describes the company’s financial performance as dismal and wanting, but has a firm commitment to implement any and all changes that can be made to
Background image of page 2
Southwest and American Airlines Page 3 improve operational efficiencies and leverage on its global network, strong brand and well- earned reputation for customer service. American hopes that the improvements that it has made
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 19

Example-Southwest - Southwest and American Airlines Page 1...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online