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Article Excerpt
Southwest Airlines plans to rein in capacity growth this year and next in an effort to grow profits amid a slowing U.S. economy, CEO Gary Kelly recently told investors. Meanwhile, the carrier is flirting with new forms of revenue generation, which could include a new fare structure and seating assignments, a revamping of its frequent flyer program and new amenities onboard, including inflight food and Wi-Fi sales. Analysts said these, along with Southwest's recent expansion of participation in global distribution systems, are attempts to court higher-yielding business travelers.
Although most analysts are reserving judgment on the ultimate effect of Southwest's capacity cuts, they said the move should give Southwest--a price leader in the markets it serves--the ability to increase fares.
"For both fourth-quarter 2007 and full-year 2008, we currently plan to grow available seat miles year-over-year by approximately 6 percent, or about two percentage points less than previously reported," Kelly said. "We also plan to implement a...
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