An Extraordinary Year

2017 marked our 45th consecutive year of profitability. We celebrated several notable milestones during 2017, while we faced intense industry competition and endured a series of natural disasters that impacted several of the communities where we live and serve. In this year’s One Report, you can read more about these achievements and challenges—and get to know how the People of Southwest make the Company strong and resilient. We invite you to read on.

A Word from Gary

“I'm grateful for our People. I'm grateful that they do such a wonderful job. I'm grateful that they've created a Company that is admired around the world and is a favorite among Customers.”

- Gary C. Kelly, Chairman of the Board and CEO

Key Highlights

A Letter from our Chairman of the Board and CEO:
Thinking Big—Acting Small11) The 2017 Southwest Airlines One Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements related to (i) the Company’s Vision; (ii) the Company’s network and growth plans, strategies, opportunities, and expectations; (iii) the Company’s financial position, outlook, goals, targets, strategies, plans, expectations, and projected results of operations, including specific factors expected to impact the Company’s results of operations; (iv) the Company’s plans and expectations with respect to its new reservation system and other technology initiatives, and the Company’s related multi-faceted financial and operational expectations and opportunities; (v) the Company’s capacity plans and expectations; (vi) the Company’s fleet plans, strategies, and expectations, including its fleet modernization initiatives, and the Company’s related financial and operational expectations; (vii) the Company’s operational initiatives and related plans and expectations, including with respect to its technology initiatives; (viii) the Company’s expectations related to its management of risk associated with changing jet fuel prices; (ix) the Company’s expectations and goals with respect to returning value to Shareholders; and (x) the Company’s other initiatives, including construction, safety, and environmental initiatives, and related plans and expectations. These statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) changes in demand for the Company's services and other changes in consumer behavior; (ii) the impact of a continually changing business environment, economic conditions, fuel prices, actions of competitors (including without limitation pricing, product, scheduling, capacity, and network decisions, and consolidation and alliance activities), and other factors beyond the Company’s control, on the Company's business decisions, plans, strategies, and results; (iii) the impact of governmental regulations and other governmental actions related to the Company's operations; (iv) the Company’s dependence on third parties, in particular with respect to its fleet and technology plans; (v) the Company's ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; (vi) the Company’s ability to timely and effectively prioritize its initiatives and related expenditures; (vii) the impact of labor matters on the Company’s business decisions, plans, strategies, and costs; (viii) changes in aircraft fuel prices, the impact of hedge accounting, and any changes to the Company’s fuel hedging strategies and positions; and (ix) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2017.

It’s hard to fathom that the 50th anniversary of Southwest Airlines is on the not-too-distant horizon. I’m in my fourth decade at this great Company, which affords me the luxury of reflecting on the past with equal excitement about what the future holds.

I joined Southwest in 1986. I was drawn in by this scrappy, growing Company with a maverick spirit and a strong sense of Culture. Southwest was born from the idea to democratize the skies and make flying more affordable for all, not just the rich and elite. It had a People-centric orientation from day one—treating Employees like Family and our Customers like guests in our home. The attitude was instantly contagious, and it didn’t take long before our communities felt the love. The results have yielded the most successful domestic commercial airline in history, and 2017 marked our 45th consecutive year of profitability.

In 2017, we accomplished some monumental milestones. Just to name a few:

  • We launched a brand new reservation system, culminating a multi-year Companywide effort and the largest technology project in our history
  • We completed the retirement of the remaining Boeing 737-300 Classic aircraft
  • We introduced the Boeing 737 MAX 8 aircraft into our fleet
  • We opened a brand new international concourse at Ft. Lauderdale-Hollywood International Airport
  • We retained our rightful place as #1 in U.S. DOT Customer Satisfaction22) Source: Air Travel Consumer Reports. Rankings based on complaints filed with the Department of Transportation (DOT) per 100,000 passengers enplaned.
  • And we announced our intent to serve Hawaii

Today, Southwest is an international Company with an expanding footprint, adding more destinations, near and far. But I like to think that even as we grow, we maintain our hometown Hospitality, and we dedicate a lot of time and attention to what is important to the communities where our Employees work and live.

Last year was an especially challenging year for several of the communities we serve—the unprecedented hurricane season that devastated Southern Texas, the southeast United States, and the Caribbean; the mass shootings in Las Vegas and Sutherland Springs, Texas; the wildfires in California; and the earthquakes in Mexico. Of all the things Southwest accomplished last year, I’m most proud of how our Company responded to these tragic events and supported these communities in a time of need.

So what does being a good corporate citizen mean to Southwest? I think it’s that same small-town outlook we have about our place in this world. A world where you love your Family, you know your neighbors by name, and you live and work side-by-side with them each and every day to provide a valuable good or service. Even as we grow, we think big and act small.

As we soar to new heights, we remain grounded in our Purpose to connect People to what’s important in their lives through friendly, reliable, and low-cost air travel. We have a lofty Vision to become the world’s most loved, most flown, and most profitable airline. And the 56,110 Southwest Family Members know that the only way we will realize our Vision is to serve one Customer and one flight at a time.

Welcome to the 2017 Southwest Airlines One Report! I invite you to spend some time learning about all of the wonderful ways in which we dedicate ourselves to the triple bottom line of Performance, People, and Planet. Even though we’re an airline, we believe some of our best work is done on the ground—in the communities we serve, by the most caring and loving Employees in the world.

They are our Heart and soul, and their steady heartbeat will forever power Southwest Airlines!

Sincerely,
Gary C. Kelly
Gary C. Kelly
Chairman of the Board and CEO

For more from Gary, please read his letter to the Shareholders.

30,000 Foot View

Our Purpose is to connect People to what’s important in their lives through friendly, reliable, and low-cost air travel. Our network of 100 destinations allows us to live out our Purpose, serving Customers on more than 4,000 flights per day during peak travel season. Carrying more than 130 million Customers in 2017—an all-time annual record—allowed us to take care of our People, invest in our business, give back to the communities we serve, and reward our Shareholders.

System Map

(as of Dec. 31, 2017)

View our interactive route map for our most current list of destinations at: www.southwest.com/routemap

Capacity by Region

(as of Dec. 31, 2017)
  • Desert/Mountain 18%
  • West Coast 17%
  • Midwest 17%
  • Southeast 16%
  • Northeast 14%
  • South Central 14%
  • International 3%
  • Puerto Rico 1%

Top 10 Airports

(daily departures as of December 2017)
  1. MDW: 251Chicago Midway
  2. BWI: 237Baltimore-Washington
  3. DEN: 196Denver
  4. DAL: 180Dallas Love Field
  5. HOU: 175Houston Hobby
  6. LAS: 173Las Vegas
  7. PHX: 168Phoenix
  8. OAK: 127Oakland
  9. ATL: 120Atlanta
  10. LAX: 118Los Angeles

Sharing our Success

More than $37 million

total corporate monetary, in-kind, and ticket donations

in Shareholder returns

$543 million

in Employee profitsharing

Reporting Approach

Our Employees, Customers, Shareholders, suppliers, and community groups all contribute to the many opportunities we see for the future of our Company. We listen to and learn from our many Stakeholders, which helps shape the content of the One Report and reflects our ongoing commitment to connect People to what’s important in their lives.

Awards & Leadership

GRI Content Index

The 2017 Southwest Airlines One Report follows the principles outlined in the Global Reporting Initiative’s (GRI) G4 Guidelines. The GRI is a voluntary, internationally recognized framework for corporate social responsibility reporting that allows organizations to measure and report their efforts in a consistent manner. Information is presented in the 2017 Southwest Airlines One Report with respect to performance related to our corporate social responsibility key topics, a term we use instead of materiality to avoid confusion with key financial information. This content index depicts our GRI responses for calendar year 2017, unless otherwise noted.

General Standard Disclosures
Strategy and Analysis
IndicatorDescriptionDetail/Location in Report
G4-1Statement from the most senior decision-maker of the organizationA Word from Gary
Organizational Profile
IndicatorDescriptionDetail/Location in Report
G4-3Name of the organizationSouthwest Airlines Co.
G4-4Primary brands, products, and/or services2017 Securities and Exchange Commission Form 10-K
G4-5Location of organization's headquarters2702 Love Field Dr.
Dallas, Texas 75235
USA
G4-6Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the reportWe operate in eleven countries: the United States, Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.
G4-7Nature of ownership and legal form2017 Securities and Exchange Commission Form 10-K
G4-8Markets servedWe serve business and leisure air travelers, and in 2017 operated in the U.S. domestic market as well as some parts of Mexico, Central America, and the Caribbean region.

30,000 Foot View
A Diversified Network
G4-9Scale of the reporting organization2017 Securities and Exchange Commission Form 10-K
G4-10Total number of employees (including breakdown by gender and employment type)A Snapshot of Southwest Employees
People Data Table
G4-11Employees covered by collective bargaining agreementsApproximately 83 percent of our Employees are covered by collective bargaining agreements.
G4-12Supply chainTo support our operations, we purchase goods and services from more than 10,000 sources across multiple continents and countries but given our network footprint as a North American carrier, the vast majority of our supply base and spend is in the U.S. domestic market. We maintain relationships directly with various types of suppliers, including service providers, contractors, manufacturers, brokers, and wholesalers. Our intent is to provide Southwest with the highest quality products and services at the lowest total costs.

While we have dedicated Teams within our Supply Chain Management department such as Fuel Management, Aircraft Maintenance, Technology, and Direct and Indirect Procurement, we strive to manage our supply chain holistically and to optimize system efficiency by utilizing analytically rigorous and dynamic approaches. Our Supply Chain Management department has a Team dedicated to monitoring supplier performance, assessing risk and planning in the event of supply chain disruptions, and analyzing our supply chain spend so we can continuously improve performance.

We build sustainable relationships with our suppliers that take into account, among other things, small and minority owned businesses and the highest standards of ethical conduct.
G4-13Significant changes during the reporting period regarding size, structure, or ownership2017 Securities and Exchange Commission Form 10-K
2018 Proxy Statement
G4-14Precautionary approachNot reported.
G4-15Externally developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes or endorsesHonoring Those Who Serve
Investing in Tomorrow’s Leaders
Lifting Spirits While Lifting Neighborhoods
Stronger Together: Fostering Environmental Partnerships
Airlines for America (A4A) climate change commitment
Public Relations Research Standards
Diversity Best Practices: the preeminent organization for mid- to large-size organizational diversity thought leaders to share best practices and develop innovative solutions for culture change. Each Southwest Employee can logon using their wnco.com email.
G4-16Memberships or associationsAirlines for America (A4A) climate change commitment
Public Relations Research Standards
National Diversity Council Board
Workforce Solutions Greater Dallas Board: the local organization mandated to implement a system of services that complement economic development as a resource for employers to access the quality employees they need, and training individuals to be successfully employed.
Identified Material Aspects and Boundaries
IndicatorDescriptionDetail/Location in Report
G4-17Entities included in the organization’s consolidated financial statements or equivalent documents2017 Securities and Exchange Commission Form 10-K
G4-18Process for defining the report content and the Aspect Boundaries, and how the organization has implemented the Reporting Principles for Defining Report ContentThrough our previous reporting and interactions with our Stakeholders, Southwest identified a number of sustainability topics which were prioritized through a benchmarking analysis of our industry conducted in 2016 and early 2017. Southwest then worked to identify key topics and related environmental, social, and governance indicators in an effort to provide a reasonable and balanced representation of our Corporate Social Responsibility efforts.
G4-19Material Aspects identified in the process for defining report contentWe have included the following key topics in the 2017 One Report: Economic Performance, Indirect Economic Impact, Energy, Water, Emissions, Effluents and Waste, Environmental Regulation Compliance, Employment, Training and Education, Human Rights, Freedom of Association and Collective Bargaining, Local Communities, Anti-Corruption, Public Policy, Customer Health & Safety, and Product and Service Labeling.
G4-20/21Aspect boundariesCovers only those business activities for which Southwest generally has complete control or ownership. This report does not include facilities primarily controlled by others, such as airport terminal space or outsourced or subcontracted facilities.
G4-22Effect of any restatements of information provided in previous reports, and the reasons for such restatementsSee data tables for any restatements of information provided in previous reports:
Performance Data Table
People Data Table
Planet Data Table
G4-23Significant changes from previous reporting periods in the Scope and Aspect BoundariesThere are no significant changes from previous reporting periods in the Scope and Aspect Boundaries.
Stakeholder Engagement
IndicatorDescriptionDetail/Location in Report
G4-24Stakeholder groups engagedCustomers, Employees, NGOs/Community Groups, Suppliers, Shareholders, and Regulators.
G4-25Basis for identification and selection of stakeholders with whom to engageWe maintain engagement channels with the Stakeholders who we believe may impact, or be impacted by, our business.

Reporting Approach
G4-26Approach to stakeholder engagementCustomers: Customer Experience surveys are sent to a representative sample of Customers each day post-travel. Daily interaction with our Customer Service Representatives with phone calls, email, or social media. Monthly brand and reputation monitoring and other ad hoc research through our Listening Center. Personal contact during travel experience with Customer Service Agents and Flight Crews.

Employees: Daily internal communications on our intranet, including news, department information, blogs, and the monthly news recap via video. Employees are able to interact in the comment sections. Monthly newsletters, annual Southwest Rallies, ongoing union meetings, and scheduled Employee surveys.

NGOs/Community Groups: Ongoing efforts with the Chambers of Commerce in each of our domestic cities, working with a variety of charitable organizations, and one-on-one meetings or calls with industry associations or community influencers, and through a community partners summit during fall 2017.

Suppliers: Ongoing efforts via emails, meetings, the RFP process, and supplier performance reviews.

Shareholders: Ongoing communication with our Investor Relations department via phone calls, email, and mail, Investor presentations, Annual Meeting of Shareholders, and the Investor Relations website.

Regulators: Ongoing engagement through permitting, compliance, and reporting activities. Safety testing, audits, and screenings.
G4-27Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concernsThroughout this report.
Report Profile
IndicatorDescriptionDetail/Location in Report
G4-28Reporting periodCalendar Year 2017, unless otherwise stated.
G4-29Date of most recent previous reportMay 17, 2017
G4-30Reporting cycleAnnual
G4-31Contact point for questions regarding the report or its contentsSWACitizenship@wnco.com
G4-32"In Accordance" option and the GRI Content Index for the chosen optionIn accordance-Core
GRI Content Index
G4-33Policy and current practice with regard to seeking external assurance for the reportThis report has not been externally assured.
Governance
IndicatorDescriptionDetail/Location in Report
G4-34Governance structure of the organizationCompany Officers
Corporate Governance Guidelines
Board Committees
2018 Proxy Statement
Ethics and Integrity
IndicatorDescriptionDetail/Location in Report
G4-56Values, principles, standards and norms of behavior such as codes of conduct and codes of ethicsPurpose, Vision, Values & Mission Statements
Investor Relations
Supplier Code of Conduct
Specific Standard Disclosures
Economic
IndicatorDescriptionDetail/Location in Report
ECONOMIC PERFORMANCE
DMAJobs and benefits, returns on investment, business partnerships, and Customer Service and Safety are all ways in which our economic performance matters to our Employees, Customers, Shareholders, suppliers, and the communities in which we operate. We strive to continuously improve our Performance by focusing on our Purpose, and our People are dedicated to fulfilling our Vision.

Southwest is known for a triple bottom line approach that contributes to our performance and productivity. We've achieved our success without resorting to layoffs or pay cuts, and Employees share in Southwest's success with our ProfitSharing Plan, the first in the airline industry. This approach helps us retain Employees, reducing turnover costs.

We expect our market presence to generate substantial savings for our Customers through the well-known "Southwest Effect" of invigorating competition by reducing fares and stimulating additional Passenger traffic in the cities where we fly. Our commitment to the Planet helps us manage costs by using resources efficiently and identifying emerging environmental trends and risks. In the air, we're conserving jet fuel and reducing emissions. Given fuel is one of our largest expenses, operating with a green filter is not only good for the environment, it's also good for our bottom line. Regarding our position on the potential risks associated with climate change, in our CDP response, we have identified risks associated with regulatory change and physical climate risks such as extreme weather events as having the potential to create operational complexities. These complexities may affect airline operations, which could result in impacts to operational and capital costs and ontime performance.

Performance
EC-1Direct economic value generated and distributedAnother Year of Strong Profits
Raising the Record Revenue Bar, Again
Continued Focus on Low-Cost Discipline
A Decade of Consistent Performance
Industry-Leading Balance Sheet
Balanced Capital Deployment
2017 Capital Expenditures Breakdown
A New Reservation System
2017 Securities and Exchange Commission Form 10-K
EC-2Climate change risks and opportunitiesSouthwest has voluntarily reported our greenhouse gas emissions through CDP for the past nine years. In our CDP response, we quantify climate change impacts, risks, and opportunities on our business, and provide information on how we’re integrating climate change into our business strategy. You can find Southwest’s CDP response at www.cdp.net. We have invested more than $590 million in fuel efficiency projects since 2002.

Planet
EC-3Coverage of defined benefit plan obligationsWe invested more than $1.0 billion in our Employees through 401(k) contributions of $476 million and, based on 2017 results, part of the $543 million ProfitSharing award to the retirement plan and part in cash. Ninety-three percent of our Employees participated in our 401(k) plans.

For the 2017 plan year, each eligible Employee will receive a ProfitSharing award equal to approximately 11.3 percent of eligible compensation, payable in 2018. Southwest will pay part of the ProfitSharing award to the retirement plan and part in cash. Most Employees will receive 10 percent of eligible compensation as a contribution to the ProfitSharing Plan and the remainder—approximately 1.3 percent—in cash. Some Employees will receive the entire ProfitSharing award in the retirement plan as specified in their collective bargaining agreement.

Employees LUV WorkPerks
People Data Table
INDIRECT ECONOMIC IMPACT
DMAOur performance impacts more than our Company. Our market presence and low fares stimulate economies in cities where we fly. We also make investments in infrastructure and services that more broadly affect the communities we serve in terms of jobs, access to services, or other impacts. Working with local communities and regulators, we strive to maximize the benefits of our investments to local and regional economies.
EC-8Significant indirect economic impact2017 Capital Expenditures Breakdown
Ft. Lauderdale-Hollywood International Expansion
Many Different Ways to Give
Repurpose with Purpose
Environmental
IndicatorDescriptionDetail/Location in Report
DMA
(for all reported environmental topics)
We recognize the importance of environmental stewardship and believe it’s our responsibility to protect our planet now and for future generations. We do our part to make environmentally responsible decisions and to minimize our impact on the environment by collecting and analyzing information on our energy consumption, emissions, and waste, and continually improving the actions we take to mitigate our impacts. We set goals and use an environmental management system (EMS) and chemical management system (CMS) to help us maintain compliance with environmental regulations, minimize costs and risk, and measure our efforts to improve our environmental performance.

Given fuel is one of our largest expenses and the burning of it produces greenhouse gas (GHG) emissions, we strive to reduce future emissions while continuing to provide safe, reliable, and affordable air transportation for our Customers. A third party assessment of Southwest’s 2017 GHG Emissions Inventory has been completed in accordance with AA1000 Assurance Standard. This assurance engagement included our Scope 1, Scope 2, and Scope 3 GHG Emissions. We are currently meeting our GHG emission targets without using offsets.

Southwest’s Leaders and Employees are responsible for minimizing our impact on the environment by:

  • Complying with all environmental laws and regulations

  • Striving to meet our annual goal of zero environmental violations in our operations

  • Maintaining our EMS, following procedures, and training our Employees to meet our compliance goals

  • Continuing to improve our performance regarding our environmental goals and initiatives, including our goals for reducing GHG emissions

  • Auditing our operations for environmental compliance and implementing corrective actions where needed

  • Auditing our environmental vendors to verify their operations are compliant and they demonstrate a commitment to environmental stewardship

  • Providing transparency of our environmental performance to our Stakeholders through public reporting and third-party verification and assurance of our GHG emissions inventory

  • Conserving natural resources, including efficient use of water and raw materials, and using alternative fuels and renewable energy where possible while continuing to meet our operational requirements

  • Minimizing waste, pollution, and emissions from our operations and preventing it where possible while remaining true to the triple bottom line of Performance, People, and Planet


Maintaining compliance with all local, state, and federal environmental laws and regulations is fundamental to our environmental policy. We continually work to meet our annual goal of zero recorded environmental violations. Our Environmental Services Team regularly conducts audits to review compliance, and we are working to improve our performance by maintaining and improving our EMS, following environmental guidelines and procedures, implementing corrective action, and training our Employees to meet our compliance goals.

Our standard auditing protocol assesses a location’s record keeping, permit status, and compliance with requirements of regulatory plans such as Storm Water Pollution Prevention Plans and Spill Prevention, Control, and Countermeasure Plans. We perform a visual, walk-through inspection to confirm that key compliance practices are enacted in each of the cities we serve. We also track spills at all of our locations, audit findings and corresponding corrective action, and information about permits and their expiration dates.

Planet
ENERGY
EN-3Energy consumptionThe Retirement of the Classics and the Introduction of the MAX
Pushing Innovation in Fuel Efficiency
Load-Shedding: Managing Energy Consumption at Our Headquarters in Dallas
Planet Data Table
EN-5Energy intensityPlanet Data Table
EN-6Reduction of energy consumptionPushing Innovation in Fuel Efficiency
Load-Shedding: Managing Energy Consumption at Our Headquarters in Dallas
EN-7Reductions in energy requirements of servicesWe increased our fuel efficiency (available seat miles1010) An available seat mile (ASM) is one seat (empty or full) flown one mile. Also referred to as “capacity,” which is a measure of the space available to carry Passengers in a given period. per gallon of fuel) from 74.4 in 2016, to 75.2 in 2017.

Planet Data Table
WATER
EN-8Total quantity consumed by sourcePlanet Data Table
EMISSIONS
EN-15GHG emissions (Scope 1)Reducing Emissions by Striving to Be the Best
Planet Data Table
EN-16GHG emissions (Scope 2)Load-Shedding: Managing Energy Consumption at our Headquarters in Dallas
Planet Data Table
EN-17GHG emissions (Scope 3)Planet Data Table
EN-18GHG emissions intensityReducing Emissions by Striving to Be the Best
Planet Data Table
EN-19GHG emissions reductionReducing Emissions by Striving to Be the Best
Planet Data Table
EN-20Emissions of ozone-depleting substancesOne of the most important issues surrounding chemical management is the use of ozone-depleting substances. The ozone layer prevents harmful ultraviolet light from passing through the atmosphere, and the use of these substances can cause a decrease in the total volume of the ozone layer. Potential ozone-depleting substances Southwest presently uses include refrigerants found in the HVAC systems and appliances of Southwest operated buildings and the air conditioning systems of company vehicles. In every location except our Headquarters Campus, we contract the servicing of our HVAC systems. For this reason, we estimate the use of these substances for reporting purposes. In 2017, the estimated emissions are 3,395 metric tons of CO2e based on an upper-bound assumption of the expected losses that would occur from Southwest facilities. We do not produce or import ozone-depleting substances in Southwest operations.
EN-21Quantity of hazardous air pollutantsPlanet Data Table
EFFLUENTS AND WASTE
EN-23Total weight of solid waste by disposal typeManaging Our Electronic Waste
Planet Data Table
EN-24Total number and volume of significant spillsIn 2017, we had no spills that were reportable to the National Response Center per regulatory requirements.

We recognize that spills of chemicals, oils, and fuels can have a significant impact on our planet, so we make every effort to prevent them. However, we acknowledge that despite our best efforts, some spills do happen because of equipment failure or human error. We provide our Employees 24/7 access to guidance and emergency response assistance with spill response, and we track our spills using an online spill reporting form. This not only makes it simple for our Employees to report a spill in a timely and accurate manner, but it also provides automatic notification to the entire Environmental Services Team upon submittal for quick response and regulatory agency reporting when required. The Environmental Services Team also compiles and analyzes details from all spills so operating groups can assess spill prevention strategies.
COMPLIANCE
EN-29Monetary value of significant finesPlanet Data Table
Social: Labor Practices and Decent Work
IndicatorDescriptionDetail/Location in Report
DMAEmployees are the heartbeat of Southwest. We focus on bringing the best People into the Southwest Family with a competitive compensation and benefits package. We then provide a positive working environment, training, and encouragement to help them succeed. Therefore, our approach to employment and labor practices is a critical strategy guided by our Executive Vice President Corporate Services and our People and General Counsel departments, which includes a section devoted solely to Labor and Employee Relations.

We are committed to:

  • Seeking talented People

  • Maintaining positive union relations

  • Investing in training and educational opportunities to enhance Employees’ skills

  • Fostering an atmosphere that promotes equal opportunity

  • Providing our Employees with a safe and stable work environment

  • Maintaining equal opportunity for learning and personal growth


We conduct scheduled Employee surveys to assess job satisfaction of our Employees, and we use information from the surveys to improve our ability to attract, develop, and retain talented Employees who will help us meet Southwest’s business needs today and tomorrow.

People Data Table
EMPLOYMENT
LA-1Employee hire & turnover ratePeople Data Table
LA-2Benefits provided to full-time EmployeesIn 2017, more than 59,800 active and inactive Southwest Employees participated in at least one component of the Company’s Employee benefits program. Southwest offers standard benefits to both full-time and part-time Employees. In the case of tuition reimbursement, Southwest provides the following maximum annual benefit, which will be counted toward the calendar year in which reimbursement is made:

  • Graduate Degrees: $5,000 for a full-time Employee, $2,500 for a part-time Employee.

  • Undergraduate Degrees, Individual/Preparatory courses and Certificate Programs: $2,500 for a full-time Employee, $1,250 for a part-time Employee.


Many of the components offered to Employees in our Employee benefits program also are offered to dependents and/or committed partners.

Women at Southwest Soar to Great Heights
Employees LUV WorkPerks
Weathering the Storms
Employee Benefits
TRAINING
LA-9Hours of annual Employee trainingOne Team. All Heart. One Res.
Training, the Southwest Way
People Data Table
DIVERSITY AND EQUAL OPPORTUNITY
LA-12Diversity and equality breakdown of employeesA Snapshot of Southwest Employees
Women at Southwest Soar to Great Heights
Building on a Legacy of Diversity
Social: Human Rights
IndicatorDescriptionDetail/Location in Report
INVESTMENT
DMAAt Southwest, we are strong supporters of protecting each individual’s basic human and civil rights and are guided by fundamental principles to not only comply with the law at all times, but also to avoid the appearance of impropriety in the actions of our Employees and our business partners. We reflect these principles in various policies and our conduct toward Employees, Customers, suppliers, and the communities we serve.

We have created and adhere to Company policies to support and respect the protection of human rights within our sphere of influence. These policies include our commitment to:

  • Prohibit any form of harassment, discrimination, or retaliation in the workplace based on race, color, religion, age, sex, sexual orientation, gender identity, pregnancy, marital status, national origin, disability, veteran status, genetic information, or other legally protected statuses

  • Respect the right of Employees to associate freely

  • Recognize lawful rights of Employees to choose or not choose collective bargaining representation


Corporate Policies
HR-2Employee training on human rightsForty percent of Employees and over 6,800 contractors received training on Human Rights in 2017.

We conduct training on human rights issues as they relate to harassment, discrimination, or retaliation for all new hires. Human rights training and information (including training on human trafficking and notification to law enforcement authorities) is available for existing Employees through a variety of vehicles, including our Guidelines for Employees, our Disability Discrimination & Workplace Accommodation Policy, in both written and audio versions, and our Most Compliant Leader training, a program required bi-annually of all Leaders, Supervisors, and above, and our harassment online learning module.

People Data Table
Policy on Harassment, Sexual Harassment, Discrimination, and Retaliation
FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
HR-4Freedom of association and collective bargainingWe have not identified operations or suppliers where the right to exercise freedom of association and collective bargaining are being violated. We take preventative measures to avoid this risk by implementing our Code of Conduct.

Corporate Policies
Social: Society
IndicatorDescriptionDetail/Location in Report
LOCAL COMMUNITIES
DMAWe understand the powerful impacts that our Company can have on the social systems within which we operate and our responsibility to be a good corporate citizen. That is why we have a Community Relations Department committed to engaging and giving back in the communities where our Customers and Employees live and work. Through our Community Outreach Teams, we provide support, leadership, and encouragement to a variety of local, civic, and charitable organizations. We believe in connecting People and championing the communities where our Employees live and work, and we strategically invest our resources to support local needs and the causes that matter most to those Communities. Our Employees get involved through volunteering, serving as Green Ambassadors, and participating on Community Giving Boards to help direct support to local organizations.

Community Giving Boards are made up of local Employees from various work groups who evaluate donation requests Southwest receives from nonprofit charitable organizations in their community. The Boards donate complimentary, roundtrip travel to approved organizations for fundraising or transportation purposes.

People
SO-1Local community engagementAt the national level, our Heart of the Community program is on a mission to build connections that bring People together and strengthen communities for a more resilient future.

Since the program launch in 2014, we’ve invested $3.6 million into 20 public space grant projects and provided placemaking technical assistance in partnership with Project for Public Spaces (PPS). Together with our local grant partners and the community at large, we aim to reimagine public spaces into vibrant community gathering places.

In 2017, we expanded our efforts in partnership with Points of Light to focus on building the resilience of three low-income communities through the individual and collective power of volunteerism. Southwest Employees are putting their Hearts in action, working hand-in-hand with neighbors and their local networks to improve how the neighborhood looks, feels, and functions. Together, we aim to strengthen cross-sector participation and connections to accelerate change and create thriving places of opportunity.

Industry Leading Balance Sheet
Honoring Those Who Serve
Music to Our Hearts
Weathering the Storms
Many Different Ways to Give
Investing in Tomorrow’s Leaders
Near to Our Heart: Civility and Respect
Travel Assistance for Patients in Need
Lifting Spirits While Lifting Neighborhoods
Repurpose with Purpose
People Data Table
ANTI-CORRUPTION
DMAAt Southwest, we strive to maintain accountability and transparency of our business practices to reduce or eliminate corruption. We require all Employees to annually certify receipt and understanding of our Code of Ethics and Insider Trading Policy. We also employ robust auditing procedures to analyze and monitor business activities, which further enhance our ability to maintain high ethical standards. We continually review our systems to provide transparency and accountability, and we update our corporate governance policies when needed.
SO-4Anti-corruption communicationIn 2017, more than 63,000 Southwest Airlines Employees and certain business associates certified receipt of our Code of Ethics and Insider Trading policy. During 2017, we also distributed our Foreign Corrupt Practices Act Policy and Anti-Corruption Compliance Procedures to all Company Officers, Senior Leaders of all departments, and select Employees and contractors who are involved with Southwest’s financial records and/or international operations. In 2017, more than 2,700 individuals received and completed a compliance questionnaire regarding the Foreign Corrupt Practices Act.

Corporate Governance Guidelines
PUBLIC POLICY
DMAWe must continually adapt to new laws and regulations. Legislative and regulatory changes have the potential to limit our opportunities for growth, and government policies and legislation can have a deep impact on how we do business. We present our views on these topics to a wide range of policymakers and Stakeholder groups through trade associations and interactions with public officials at the federal level and in the states and communities we serve. We participate in industry associations such as Airlines for America (A4A) and have developed our own public outreach programs such as our Key Contact Program, which features Days on the Hill. Our involvement allows us to gain insight into core issues for the airline industry as a whole and to advocate jointly for regulations that support a healthy, competitive industry. We also benefit from the opportunity to share technical expertise and operational knowledge that leads to better Customer Safety, Service, and overall efficiency.

Southwest has adopted a policy that it will primarily use its affiliated political action committee, the Southwest Airlines Co. Freedom Fund (Freedom Fund), which is financed through voluntary Employee contributions, to support political campaigns, and that Company funds will be limited to supporting selected political campaigns at the state and local level in compliance with the laws of the relevant states and localities. All political campaign contributions from the Freedom Fund or by the Company directly are approved by the Vice President of Governmental Affairs and overseen by Southwest’s Senior Vice President General Counsel & Corporate Secretary, with an annual summary of those contributions provided to the Southwest Airlines Board of Directors. All political contributions are intended to promote the interests of the Company and are not guided by any private political preferences of any Employee. All contributions by the Freedom Fund are disclosed via publicly available reports filed monthly with the Federal Election Commission. The Company strives to comply with all applicable federal, state, and local campaign finance restrictions and disclosure requirements.
SO-6Political contributionsIn 2017, the Company contributed $34,100 directly to political campaigns at the state and/or local level in four states (California, Florida, Illinois, and Maryland). No Company funds were used to support or finance any political campaign at the federal level, nor did the Company support or finance any independent expenditure committee or any so-called “Super PAC.” In 2017, the Company contributed $50,000 in support of a ballot measure in Kansas City, Missouri, and a total of $30,000 for two political committees organized under section 527 of the Internal Revenue Code (benefiting organizations representing Democratic municipal officials and Republican state legislators, respectively).

In 2017, A4A, our airline industry trade association, determined that $1,557,347 of the total dues paid by the Company to A4A were nondeductible lobbying expenses. Southwest also paid dues to several other national, state, and local trade associations and chamber organizations, in which a portion of those dues were used by these organizations for nondeductible lobbying activities; however, in all cases, that portion was less than $6,000 annually for each organization.
Social: Product Responsibility
IndicatorDescriptionDetail/Location in Report
CUSTOMER HEALTH AND SAFETY
DMAAt Southwest, we are committed to the Safety & Security of our Customers and Employees—it’s our number one priority. We continually work to create and foster a Culture of Safety & Security that proactively identifies and manages risks to the operation and workplace before they can become injuries, accidents, or incidents. We strive to manage our Culture of Safety & Security through establishing and annually reviewing Safety related objectives, establishing and promoting Safety & Security reporting processes, and creating and maintaining a proactive reporting Culture. Southwest’s policy is that no disciplinary action will be taken against any Employee for reporting a Safety or Security occurrence or hazards, except in cases where behavior is ultimately deemed to be reckless.
PR-1Health and safety impact assessmentTraining, the Southwest Way
Safety Meets Big Data
People Data Table
PRODUCT AND SERVICE LABELING
DMASouthwest has always focused on the Customer, with features such as no first or second checked bag (size and weight limits apply) or change fees (fare differences apply), and with a constant desire to improve the Customer Experience. We measure our Customer Satisfaction on an ongoing basis by tracking various sources of Customer Satisfaction data such as our Net Promoter Score, the American Customer Satisfaction Index, and the U.S. Department of Transportation’s (DOT) Customer Satisfaction Ratings. We also measure Customer Satisfaction through our own Tracking Loyal Customers platform and through the Customer Experience survey which is sent to a representative sample of Customers each day post-travel. Survey results are reported to Leaders of the Company and to Leaders in the various Customer touchpoint areas who use the results to measure performance of key activities. We also do monthly brand monitor research and other ad hoc research that evaluates Customer and Non-Customer perceptions and experiences. Additionally, we track feedback received through various channels such as call centers and social media to learn how we are doing.

We recognize the importance of communicating openly, accurately, and responsibly about our service to our Customers, and we are committed to Transfarency,® honest communication about our fares, so Customers can make informed choices.

Our Customer Service actions are further communicated to our Customers through the use of various channels or Customer Insight opportunities that allow for two-way communication with our Customers, such as through Southwest’s Listening Center and social media. In all these channels, we’re answering questions and looking for ways to connect our Customers to what’s important in their lives.

People
Customer Service Policies (click on “Customer Commitments”)
PR-5Customer satisfactionExternal Customer commendations increased in 2017, and our U.S. DOT score related to consumer complaints per 100,000 enplanements maintained a strong position compared to 2016. We also realized a five percent improvement in our mishandled baggage ratio in 2017 compared to 2016.

One Team. All Heart. One Res.
Uniforms with Heart
Social Care: A Look Behind the Scenes
People Data Table

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