Southwest Airlines (LUV) announced that the Board of Directors, at its meeting held today, significantly increased the company's quarterly dividend to $0.04 per share from $0.01 per share. Annualized, this amounts to over $100 million. The dividend will be payable June 26, 2013 to shareholders of record as of the close of business on June 5, 2013.
The Board also increased the Company's existing $1 billion share repurchase authorization to $1.5 billion. Of the remaining share repurchase authorization, an initial $250 million of Southwest common stock will be repurchased under an accelerated stock repurchase program.
As a component of its AirTran integration, fleet modernization initiatives, the company said it has revised its aircraft delivery schedule. For 2014, five Boeing 737-700 firm orders have been converted to 737-800s, five options were exercised for -800 deliveries from Boeing, and five options to purchase Boeing Next Generation (NG) aircraft were relinquished. Five options in 2015 were also relinquished.
Separately, the Company has agreed to purchase ten pre-owned 737-700s for delivery in 2014 and 2015. Twelve 737NG options held by the Company in 2014 and 2015, as well as 29 options in 2017 and 2018, were converted to 737 MAX options and deferred beyond 2024.
The company also converted 30 Boeing 737NG firm orders in 2017 and 2018 to MAX firm orders and deferred them to 2019 through 2021.
Further, following the expected delivery of Boeing's 737 MAX 8 in 2017, Southwest Airlines said that the airline and Boeing have entered into an agreement for Southwest to be the launch customer for the Boeing 737 MAX 7 series, with deliveries beginning in 2019.
Gary Kelly, Chairman of the Board, President, and CEO, stated "Our restructured aircraft delivery schedule will reduce our capital spending for firm orders through 2018 by more than $500 million. Further, it defers nearly $2 billion in potential capital spend on option aircraft deliveries beyond 2018. This reduction follows last year's deferral of approximately $1 billion in capital spend in 2012 through 2014."
The company stated that its restructured aircraft delivery schedule brings its annual firm aircraft capital commitments down to approximately $1 billion to $1.2 billion, on average, through 2024. For full year 2013 and 2014, firm aircraft capital commitments are estimated to approximate $900 million and $1.2 billion, respectively. Total capital expenditures are expected to be approximately $1.4 billion for 2013.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.