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Southwest having 'delightful success' raising fares

23-Mar-2011 12:52 PM

Southwest CEO Gary Kelly stated the carrier has had "delightful success" raising fares to offset higher fuel prices and has no plans to reduce capacity (Associated Press/Bloomberg, 22-Mar-2011). "We've had six fare increases so far this year. That's a lot in 90 days. On the other hand, our traffic has held up more than well — it's been very, very strong," Mr Kelly said. The carrier stated it plans to increase capacity by 5-6% in 2011.

Southwest Airlines: "Our revenue improvements have been very dramatic over the last five years. We have been routinely setting load factor records, including the most recent monthly results in January and February of 2011. Our domestic O&D market share reached number one during this five-year time period. And every year, it continues to climb. We've been forced to pursue fare increases for the obvious reason with surging oil prices here in 2011. And at the same time, as I just reported to you, we've seen very strong demand. We've continued to see our record load factor performances. So as you can imagine, we're very pleased with our continuing revenue momentum. Our financial objectives for 2011 are to sustain the very strong revenue momentum; to overcome higher than planned fuel costs; and keep the rest of our cost structure under control so that we can surpass 2010 earnings. So thus far, our capacity plans for 2011 are primarily driven by increased aircraft utilization. And we are expecting our available seat mile capacity still to be up in the 5% to 6% range. And that is unchanged, again, from our plans late last year," Gary Kelly, CEO. Source: Company Statement, 22-Mar-2011.