This is the second in a series of posts about our just-released integrated annual report, the 2010 Southwest Airlines One Report™, where we have illustrated our commitment to a triple bottomline and how our passion and focus on Performance, People, and Planet continues to propel us forward.
I’m sure many of you joined me in saying, “Whew!”, as we watched the U.S. economy begin to improve in 2010. However, consumer behavior patterns remained uncertain and fuel prices continued to climb. We zig. They zag. This was apparent in our response to these challenges in comparison to our competitors. Other carriers reacted to high fuel prices with leaner schedules while Southwest responded with more optimized flight schedules offering a more robust and efficient network for our Customers.
Remember I mentioned fuel going up? Well, many of our competitors added new fees and increased their fees for checking bags. Here’s where our zag came in again. We remained true to our low-fare brand and corporate philosophy, refusing to nickel and dime our Customers with excessive fees. Dedication to our low-fare brand, prudent capacity discipline, revenue management enhancements, and our award-winning Customer Service contributed to making 2010 our 38th consecutive year of profitability, an accomplishment unmatched in U.S. aviation history.
Here are some other 2010 performance milestones Southwest achieved:
- Grew our net income by 364 percent to $459 million as compared to 2009
- Excluding special items, net income was $550 million, or a record 74 cents per diluted share
- Achieved record total operating revenues of $12.1 billion
- Achieved a record annual load factor1 of 79.3 percent
- Produced lower unit costs, on average, than most major carriers, adjusted for stage length
- Maintained the strongest Balance Sheet in the domestic airline industry
- Received the highest industry Customer satisfaction rating
- Increased domestic market share to 21 percent
- Maintained the distinction of being the largest U.S. carrier in terms of Passengers boarded
- Achieved a return on invested capital (ROIC), before taxes and excluding special items, of approximately 10 percent for 2010, which was approximately double our 2009 ROIC results
I couldn’t be more proud that of Southwest Airlines 2010 performance. While our outlook for 2011 is largely dependent on fuel price volatility and economic stability, we entered the year with a strong brand, strong financial resources, an industry-leading business model, and sustained profitability.
We are proud of our commitment to being a good citizen of the world. We look forward to sharing the journey with you in our upcoming blog posts on Performance, People, and Planet, and we hope it will inspire you to read our 2010 Southwest Airlines One Report™, which, in an effort to conserve our natural resources, can only be found online at www.southwest.com/citizenship.