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Well take a look everybody shares of Southwest Airlines after seeing record growth in the last quarter the airline this morning reporting lighter than expected revenue for its third quarter.
Had a chance to pick -- chairman -- CEO Gary Kelly about the drop since the second quarter and how he's feeling about the road ahead.
We had a great second quarter -- all time record earnings.
In July and August were little bit off of our plan and then now September was pretty far off so.
You know that -- the most I can make of it at this point is just broader economic weakness -- that seems to be pretty consistent with a lot of the other.
Economic data that we've that we've all seen.
-- as you set October of course is a different story so October.
Is really more on the pace that we were saying earlier in the year and so far her unit revenues in October up 4%.
But it's a pretty tenuous economy and and you just begs for our -- cautious outlook at this point -- You know Gary one of the analyst that covers the stock this morning wrote a research note that.
That growth investors are abandoning southwest is a stock right now going for -- your competitors like Alaska and spirits -- how do you get the airline back.
How do you sell it once again as.
The growth story.
I think it's very simple well we've got to hit earnings targets and we've got to grow our earnings and -- selves in a position where we can grow the fleet.
Grow our route network we have a number of opportunities to grow.
But it's just not sensible to do that of course until we're hitting -- our return on investment.
Do you also we have sorry -- this.
Guy does is he also got to deal with as well you got fourth quarter you got higher jet fuel prices other going to be at a record for the fourth quarters you've got that -- -- -- as well.
-- indeed and certainly in the near term again.
With demand being inconsistent.
-- -- fuel prices being higher it just begs for near term caution.
But we have a we have a plan we have five.
Strategic initiatives that are under construction -- roll out.
Beginning last year and through 2015.
They bring significant value and in particular in 4013.
Will be introducing.
Number of new revenue sources so.
I'm very optimistic about the future and of course Southwest Airlines is is a great company and -- and -- are wonderful brand with.
Sure terrific culture great customer service so.
Will will will be there and we'll have those growth investors look at southwest again.
Well let me ask you about some change -- the company on the corporate side you've recently hired Randy Babbitt up former FAA chief and he's gonna be running.
-- labor relations for you it's -- newly created title.
Are you seeing some headwinds with regards to.
Labor relations and and the unions themselves in the next few months.
What wouldn't call it headwinds but.
That you know we.
We we always put our employees first.
Over 80% of our employees are unionized and we just find herself -- an interesting point.
In our corporate development if you will also we have a lot of challenges ahead.
We've always worked together well with our people and especially our unions there will need to continue to do that we have a bigger company.
And Randy I think is about as good as it gets so will need.
To have a strategy will need to have.
Open lines of communication.
-- need to have.
Obviously close attention paid to administering our our labor contracts and then also negotiating future contracts.
And he's he's the total package so we're we're delighted to have Randy and I think you'll be a great addition.
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