Southwest Airlines - Media Day

Southwest Airlines chief financial officer Laura Wright, speaking before the news media Wednesday, said Southwest will take four fewer airplanes in 2009 than previously planned. Ms. Wright said Southwest has reached agreement with the Boeing Co. to defer the four Boeing 737-700 airplanes to 2016. The change means that Southwest will take only 10 airplanes in 2009 rather than 14.

The carrier has taken delivery of the 26 of the 29 new airplanes it is set to receive in 2008, and it has sufficient cash on hand and operating cash flow to pay for the remaining three if necessary, she said. However, the Boeing strike makes a delivery date uncertain, she added.

Ms. Wright said the nation's on-going financial crisis has not notably affected Southwest, although she said the carrier is concerned about the longer term effect on U.S. business. Ms. Wright indicated that Southwest has some financial exposure in its fuel hedging activities because the other side in the transactions haven't put all the cash needed to entirely cover the hedging positions.

However, she said 85 to 86 percent of the hedges are covered with cash being held by Southwest. She declined to name the financial services companies with whom Southwest has hedged, but said: "They are definitely Wall Street names you'd recognize."

She said Lehman Brothers was not one of the hedgers. "We've got really good protection there. We're not 100 percent protected from counter party risk," she said.