TMF: Jim, let's talk about the industry at large. Such an important and visible industry to Americans. Obviously, two of the major airlines are in bankruptcy now. We've talked about American Airlines
Parker: I don't know exactly how all that is going to play out. US Airways has emerged from bankruptcy. They have lowered their costs somewhat. They still have relatively high unit costs, but they have definitely strengthened their business model somewhat. United is still in the process, so we don't know how that is going to play out.
I think from a competitive standpoint certainly it is a competitive disadvantage for us to have to compete against airlines that don't have to pay their bills, but, on the other hand, if I had a choice I would rather not be in bankruptcy and have $1.9 billion in the bank as we have here at Southwest and be in a position to make our own decisions and build our own future.
TMF: Who do you regard as Southwest Airline's primary competitor today?
Parker: I think just as it has been for 32 years, our primary competitor is the automobile. We really are a unique airline, primarily a short-haul airline. We build markets wherever we go. We expand markets through low fares and great service, and we try to get people out of their cars and into the airplanes. We try to get people who might not otherwise be traveling to make a decision to fly because they can afford to do so.
TMF: Given the state of the industry, I was thinking the other day about the Ray Kroc quote, the founder of McDonald's
Parker: We don't view it as an opportunity for us to knock anybody out. I think that it is a mistake for a company to spend all their time focusing on trying to run their competitors out of business. I have seen too many companies fail because they got so focused on trying to do that.
Rather, we just try to stick to our knitting, do what we do here and we are always scanning the horizon for opportunities. In this kind of open environment, it seems likely that there will be opportunities for us to expand and grow and offer low fares and great service to even more parts of America than we do right now.
TMF: Jim, you talked about opportunity there. Southwest is one of the few profitable and really the strongest company in this industry. You have $1.9 billion in cash sitting out there. How are you going to make use of that money? You are not going to acquire any other carriers; I think last time you were on the show you said that is not what you are in the business of doing. What about a dividend hike?
Parker: The reason we have so much cash -- more cash than we normally would carry at Southwest -- is that we built it up after 9/11 really as an insurance policy because of the uncertainty in our industry and we didn't know what was coming. It does give us that kind of insurance that we are well positioned in the event of another disruption. In an unanticipated event, we have the financial strength to assure that our company will survive. But in the more likely scenario, we believe there will be opportunities for us to grow and we will use that money to grow our company and to build our future.
Tomorrow: Parker on bailout packages and low-price competitor JetBlue.