![]() Mike: It seems to have the ability to cloud men’s minds. I just want to say that judging from all the press, this game player seems to have an unusual capability. Its big story these days is a machine called the PlayStation2. Mike: Jim, we move now to electronics and entertainment giant Sony Corp. ![]() This is an airline that all but turns away passengers, because there’s such demand for its service. It might make for some bumpy skies ahead, but this company is fundamentally strong. And no matter who it is, can they keep Southwest on its profitable track?īut does that make you want to avoid the stock? But it troubles many that he hasn’t yet named a successor. Jim: Right, Kelleher is now 69 and he is being treated for prostate cancer, though all signs are that he’s still quite healthy. The problem, not to be crass about it, is what happens if Kelleher falls out of an airplane? Mike: We should note, however, that there is one big cloud on Southwest’s horizon. But you’d never know jet fuel prices had risen by looking at Southwest’s earnings or its stock. Jim: Look at it this way: The hike in jet fuel prices this year has dented the profits, and stock prices, of most major airlines. Mike: You still think it has a ways to go? Despite Southwest’s run-up, I’d still highly recommend this stock, which trades at about 22 times estimated 2001 earnings per share. Southwest has surged 80% so far this year, while the American Stock Exchange’s index of airline stocks is down 4%. Mike: So the performance of Southwest’s stock is comparable to that of other airline stocks this year, right? ![]() That, combined with the short turnaround time its planes spend at airport gates, keeps Southwest’s jets in the air most of the time, giving the airline top utilization of its assets. Also, it flies mostly short-haul routes, so it can offer frequent service. Southwest also benefits from staying away from the most congested airports, so its planes can more easily leave and arrive on time. Whereas having a sense of humor is a prerequisite for being a passenger on some other airlines. Mike: In fact, one of the prerequisites of getting a job at Southwest is having a sense of humor. Jim: That’s one of their trademarks, that the attendants can have fun with those stilted flight rules they have to announce. I would have been rolling in the aisle except, of course, I had my seat belt on. Mike: The funniest comedy club I ever attended was a late-night Southwest flight out of San Jose, when the flight attendants gave their “fasten-your-seat-belt” spiel. It also has tremendous employee morale, as I said in fact it’s almost a cult at Southwest. It operates only one kind of plane, the Boeing 737, so it saves gobs of cash not having to train its people to fly different types of jetliners. Jim: Southwest excels for several reasons. You know that when you fly Southwest, you have to bring your lunch and you might get the center seat, but you’ll probably also get to your destination on time. Mike: No, but what it does have is predictability. Jim: It doesn’t even have assigned seating. Look at the experience of flying Southwest: As you and I both know because we’ve spent more hours flying than we care to remember, it certainly doesn’t have the best food or the most luxurious cabins. Mike: Southwest is a steady moneymaker in no small part because it runs a bare-bones operation. ![]() And it’s not just his personal habits, it’s also the amazing esprit de corps and humor he has instilled at Southwest, whose employees adore him even though they’re mostly unionized. Jim: Kelleher just might be the most colorful executive in corporate America. ![]()
0 Comments
Leave a Reply. |