The company is focused on initiatives such as assigned seating, premium seating, and network optimization to improve customer experience and financial performance. These initiatives are designed to drive shareholder value and are expected to impact future results.

The company is formalizing partnerships with international carriers to expand its network, beginning with Icelandair in Q1 2025. This strategy aims to connect customers with more global destinations and generate additional demand.

The company added 22 Boeing 737 MAX 8 aircraft to its fleet in 2024 and retired 34 Boeing 737-700 and two Boeing 737-800 aircraft. This fleet modernization is aimed at lowering operating costs and improving fuel efficiency.

The company is targeting a $500 million cost savings initiative by 2027 through various measures, including minimizing hiring, optimizing scheduling efficiency, capitalizing on supply chain opportunities, and improving corporate overhead.

The company experienced operational disruptions due to extreme weather, resulting in flight cancellations and customer reimbursements. The company is working to improve operational reliability and resilience.

The company is investing in technology improvements to support operations and customer service, including new seating processes, airline partnerships, and digital customer service modernization. These investments are intended to improve efficiency and customer experience.

The airline industry is particularly sensitive to changes in economic conditions, and continued or future unfavorable economic conditions could negatively affect the Company's results of operations and require the Company to adjust its business strategies.

The Company's business can be significantly impacted by the availability of jet fuel and high and/or volatile fuel prices, and the Company's operations are subject to disruption in the event of any delayed supply of fuel.

The Company's business is labor intensive, with most Employees represented by labor unions; therefore, the Company could be materially adversely affected in the event of conflict with its Employees or its Employees' representatives or if the Company were unable to employ and retain appropriate numbers of qualified Employees to maintain its operations.

The airline industry is intensely competitive, and Southwest has historically competed with other airlines on virtually all of its scheduled routes. The Company competes with airlines that have more seating options and associated passenger amenities, including first class, business class, and other premium seating and related amenities.

Alliances and code-sharing agreements increase the airlines' opportunities to expand their route offerings. An alliance or code-sharing agreement enables an airline to offer flights that are operated by another airline and allows the airline's customers to book travel that includes segments on different airlines through a single reservation or ticket.

The Company believes its Customer Service and Customer-friendly policies (including those listed below) continue to positively differentiate it from many of its competitors. The Company continuously reviews the effectiveness of its Customer policies in achieving its commercial objectives.

The Company expects to further increase asset utilization through its introduction of redeye flights and its initiatives to decrease the amount of time it takes to turn an aircraft. Such investments include moving to a fully digital (i.e., paperless) process, improved communication tools for Employees, and better visual and real-time information to assist both Customers and Employees.

The Company continually works to better optimize its route network and schedule through the adjustment of flights in its existing markets and the addition of new markets and itineraries, while also pruning less profitable flights from its schedule.

Southwest's use of a single aircraft type has historically allowed for simplified scheduling, maintenance, flight operations, safety management, and training activities.

The company is investing over $2 billion over five years to modernize and transform the Customer Experience. These enhancements include improved WiFi, onboard power ports, larger overhead bins, and more entertainment options.

The Company is amid a multi-year digital service modernization program designed to provide better Customer Service at a lower cost. Key focus areas include contact center service modernization, airport service modernization, Customer Service communications, and disruptions management.

In 2024, the Company introduced generative AI capabilities and automation tools with a goal to improve Customer Service, increase efficiency, and drive lower cost while exceeding Customers' Hospitality expectations.

The company returned $680 million to Shareholders through $430 million in dividend payments and $250 million through an accelerated share repurchase program entered into by the Company with a third party financial institution in fourth quarter 2024.

The company is focused on prudent capital deployment by minimizing fleet capital expenditures, continuing to invest in infrastructure, managing debt levels, and providing returns to Shareholders through dividends and share repurchases.

The Company has pursued, and plans to continue to pursue, opportunities to take advantage of current market conditions through the sale and/or sale-leaseback of certain aircraft, with the intention of replacing most, if not all, of such aircraft with new MAX aircraft from Boeing by the end of 2031.

The Company remains steadfast in its desire to pursue, implement, and enhance initiatives to address the Company's impact on the environment. Over the years, the Company has undertaken a number of initiatives that have a direct impact on its fuel conservation and emissions-related reduction efforts.

The Company's ability to achieve its environmental sustainability goals is subject to risks and uncertainties, many of which are outside of its control. These risks and uncertainties include, but are not limited to: the Company's ability to successfully implement its business strategy, effectively respond to changes in market dynamics, and achieve the anticipated benefits and associated cost savings of such strategies and actions.

As part of its commitment to corporate sustainability, the Company published its 2023 One Report on May 8, 2024. The report describes the Company's sustainability strategies, which include the Company's fuel conservation and emissions mitigation initiatives and other efforts to minimize greenhouse gas emissions and address other environmental matters such as energy and water conservation, waste minimization, and recycling.

In 2024, the U.S. airline industry continued to face challenges such as inflationary cost pressures (particularly labor costs), delayed aircraft deliveries, shifting travel demand patterns, economic uncertainty, disruptive weather events, and natural disasters.

The airline industry is heavily regulated, especially by the federal government, and there are a significant number of governmental agencies and legislative bodies that have the ability to directly or indirectly affect the Company and/or the airline industry financially and/or operationally.

Airport capacity constraints and air traffic control inefficiencies have limited and could continue to limit the Company's growth.