Financial Performance & Guidance - Southwest Airlines missed on both top and bottom lines, leading to a stock decrease of almost 10% [1] - The company had completed a $2.5 billion share buyback program and finished $1.5 billion in the second quarter [8] - The board approved an additional $2 billion share repurchase program over two years [9] - Southwest Airlines initially guided for $1.7 billion in EBIT for the full year, but the difference is attributed to macro factors [12] Demand & Capacity Management - Demand slipped about 6% from the beginning of the year, but stabilized in the second quarter with signs of inflection in the last month or so [3] - The company has taken another 1.5 percentage points out of capacity for the back half of the year, with growth for the year expected to be about 1 percentage point [6] - Basic economy bookings and revenue saw a slip due to friction in the booking process, but the issue was resolved within two weeks [4][5] - After changes to the basic economy booking flows, the company has seen stable demand and conversion rates return to or exceed prior levels [7] Strategic Initiatives - Bag fees are expected to generate $350 million in EBIT this year and a run rate of about $1 billion per year [9] - Assigned seating, launching next week for flights in January of next year, is anticipated to perform well, with over 80% of customers (85% of customers that don't fly Southwest Airlines) desiring it [10][11]