Each week, David and Tom Gardner play "Buy, Sell, or Hold?" with a personality from the business or celebrity world, asking not about stocks, but about happenings in the world. The question they pose to their guests: If these things were stocks, would you buy, sell, or hold -- and why?
It's been a rough year for the airline industry. The Sept. 11 terrorist attacks, a floundering economy, war with Iraq, and ongoing terrorism fears have led to bankruptcies and near-bankruptcies for some of the country's biggest airlines. But one continues to soar to new heights.
Tom: Buy, sell, or hold Amtrak?
Parker: Sell. It's tough. America is no longer a train-riding nation. There are unique opportunities in some dense East Coast markets where there's the kind of urban center-to-urban center traffic to support that, but overall, it's a very expensive form of transportation and it cannot compete with an airline, which can produce air travel at around 7 cents per available seat mile.
David: This isn't a stock -- it's something close, though, and it's very concerning in your business. Buy, sell, or hold the price of oil today?
Parker: I like where we are, which is basically hedged over a period of time to give us some assurance. We don't view it as a profit center, but it gives us some stability -- that's what you need in our business is stability. I think in the near term, we'll probably see oil prices go down a little bit, but over the long term it is very volatile.
David: Do we as consumers when we buy our airplane ticket -- is that airline ticket highly dependent on the price of oil -- does it really matter?
Parker: The price of the ticket is somewhat dependent on the price of oil, but it is more dependent upon the relationship between supply and demand.
Tom: Buy, sell, or hold unions?
Parker: I think I would hold on that. There are some buys and some sells. Overall, I think the union movement is becoming much more cognizant of the importance of the ability of their employer, of a company in America to make a profit. That was really what Samuel Gomper [American Federation of Labor president] said -- that the first obligation of an employer is to make a profit. Some people in the union movement lost sight of that for a while, but I think they understand it very well right now.
Tom: Would you say that unions at the other airlines were too short-sighted relative to the unions at Southwest?
Parker: In some cases, yes. You can't just blame the unions, that would be unfair -- I think some of those other airlines fell into a self-destructive cycle of greed and it wasn't just the unions.
Tom: Buy, sell, or hold requiring overweight people to purchase a second ticket?
Parker: Well, we don't require overweight people to buy a second ticket, or there are some of us who would have to buy second tickets all the time. We just require if people are going to take up two seats that they pay for two seats. As your question is posed, I would say it is a sell.
David: Buy, sell or hold allowing pilots to carry guns in the cockpit?
Parker: I would personnally sell that one.
David: Why is that?
Parker: I think that the cockpit doors are going to be secured, people can't get into the cockpit, we don't want the pilots coming out of the cockpit, and I don't particularly want the pilots shooting each other, so I'm not exactly sure what the point is.
Tom: Would you say taken all in all -- let's take today vs. five years ago -- are we safer flying today than we were then?
Parker: Yes, I think we are safer, we are more secure. Airline safety is at an all-time high, airport security is at an all-time high.
Tom: And our final buy, sell, or hold. Jim, I really want you to think about this one before answering, because I think there are a certain number of customers who would buy if Southwest offered this sort of flight -- buy, sell, or hold nude pilots?
Parker: (Laughing) Well, I was approached the other night by a woman who said she wanted the job at our company of checking out our naked pilots. So, I think there might be a market there.
David: Jim Parker is the CEO of Southwest Airlines. Thanks for joining us once again on The Motley Fool Radio Show.
Parker: Thank you. It was a pleasure.
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