This past week has been crazy, particularly at work. It’s been possibly the worst 7 days in the history of Southwest Airlines’ operations, with the obvious exception of Sept 11. Snow, ice, deicing delays, fog, and other issues have wreaked havoc on our flights in places you’d expect, like Chicago and the Northeast, and places you wouldn’t, such as Vegas and Portland. The majority of my inherited flights have run late for the last week. Tonight, Christmas Eve, I finally have a quiet night. I’m on a stretch of 16 straight shifts, which I normally wouldn’t do, but I picked up some overtime over Christmas and a traded shift at the beginning. I get some time off starting the morning of Jan 1. Halfway there!

SWA is in the process of securing 14 slots at New York City’s LaGuardia (LGA), marking the first time we have ever entered the NYC market (ISP doesn’t count since it draws mainly from the Long Island area, not NYC proper). Historically we have avoided the 3 New York metro airports due to high costs, lack of gate/slot availability, and chronic delays. However, by staying out of the largest aviation market in the world, we have cost ourselves huge amounts of revenue. We are now getting a few slots from ATA, which should allow 7 daily round trips to and from LGA. I have mixed feelings. The extra revenue will be significant, but LGA is an operational nightmare, similar to Philadelphia (PHL) if not worse in terms of delays.

You might have read some confusing news about Southwest’s earnings report today. Depending on which article you read, the headline might say we posted a loss or that we posted a profit. Both are correct in their own way. From an accounting perspective, we technically posted a loss due to a one-time charge of $247 million related to our fuel hedging. In a nutshell, we have a group of contracts to buy oil at certain prices on a variety of future dates. We carry that portfolio of contracts on our books as an asset. Each quarter the value of that portfolio goes up and down with the current price of oil, and our income statement has to reflect that change. This is known as mark-to-market accounting. In the 2nd quarter, since oil rose so much, we reported a huge gain because our hedging portfolio became more valuable. In the 3rd quarter, oil dropped sharply, so we recorded a hefty charge.

From actually operating the airline, we posted a small profit thanks to the benefits of our settled fuel hedges. Unfortunately, the charge from our future hedges’ drop in value was more than the profit we made from flying customers and cargo around, so we posted a loss for the quarter. Clear as mud? The New York Times posted a helpful article on the topic that might explain it better.

I know many of you aren’t that interested in SWA’s accounting practices. But there’s a lot of confusion out there regarding our hedging program, so I wanted to clarify it a bit.

Sunday morning I wrapped my first three official days as a trainer at work. My trainee was a great guy who came from AirTran’s dispatch office. He knows his stuff, has a good attitude, and is eager to learn, all of which make my job much easier. He seems like an excellent addition to our office.

The training experience reminded me of my early days in the office, which seem like such a long time ago even though less than 4 years have passed. I was much less confident than my trainee since I had never dispatched before. I was terrified when the phone rang and I had to answer it. I pored over my airport notes and diagrams and NOTAMs and forecasts, afraid that I would miss something. Despite my fear, it was so exciting to be working a real desk with real flights after working so hard to get there. It’s both a bit scary and very satisfying to become the guy on the other side, trying to help out the next class of dispatchers, teach them as much as possible, and give them confidence that they can use our software and policies to handle any situation that might arise.