A media report has indicated that Southwest Airlines, appreciated by fliers for not charging the kinds of fees common at other carriers, (3/26/2007)
According to USA Today, chief executive officer Gary Kelly says the airline needs to generate more revenue without "nickel-and-diming our customers" or raising fares again.
Kelly shared that Southwest´s operating costs have jumped 25 percent in the past five years because of higher fuel prices, and that it needs to generate more revenue to offset those and other rising costs. The report also highlighted that Southwest´s year-over-year revenue rose only one percent in January and February. After six price increases last year, Southwest´s average one-way fare is now $104, a record high for the airline.
The report also shared that in order to boost revenue, Southwest already has:
. Focused growth in large, high-demand business travel markets. Southwest entered the Denver market a year ago, returned to New Orleans last year after a post-Katrina hiatus, and is beefing up service in the densely populated East and at Chicago´s Midway Airport. This fall, it plans to resume service to San Francisco International. It pulled out in 2001.
. Emphasised cargo service. While Southwest has always carried some cargo, its emphasis on fast turnaround times made it tough to load lots of cargo on its planes.
. Sold ancillary services. It is trying to sell hotel rooms, rental cars, vacation packages and other travel services on its website.
. Improved technology. By 2009, Southwest will have a new computer system that could allow it to offer not only assigned seats but also foreign itineraries.