Transformed Southwest set to grow, change further

“I can’t remember a time when I have been more optimistic about the future,” Southwest CEO Gary Kelly told attendees at Airlines for America’s Commercial Airline Summit.

Kelly recounted the transformation of Southwest since 2001 from a much smaller, predominantly short-haul, all-domestic carrier, through more than a decade of recession, high and volatile fuel prices, tougher competition and missed ROI targets into a much different airline today.

“We optimised our route system, changed our boarding process, introduced business select, revamped our frequent-flyer system, added the 737-800, retrofitted new seats, launched MAX and launched international routes,” Kelly summarised. “We are now replacing a 30-year-old reservation system.”

The transition yielded record profits in 2014 and a load factor of 83%, up from 68% in 2001.

Southwest will continue to add new Latin American destinations in 2016. And the “Southwest effect” remains durable, with fares down and passengers up 32% at LaGuardia and fares at Washington Reagan down 34%, according to Kelly. He is looking at up to 50 new destinations in North and South America and more investments in technology in the coming years.

Henry Canaday, contributor, Low-Fare & Regional Airlines/
Washington, DC, USA

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