Jaunted

Gary Kelly

Southwest CEO Predicts "An Interesting 2008"

December 20, 2007 at 2:00 PM | 0 Comments

We certainly have an obsession with interviewing travel trendwatchers like Peter Greenberg and airline CEOs like Fred Reid. Sadly, we can't score all the gets. But we can tell you what Southwest Airlines CEO Gary Kelly had to say in a recent interview with The Dallas Morning News.

Most importantly for his company, Kelly says Southwest is ready for high fuel prices and an economic slowdown--both definite possibilities for next year:

We've got a great fuel hedge this year. It's not quite as good next year, but it's still very good and certainly provides us tremendous protection. We're 70 percent hedged next year at about $50 a barrel...We've slowed down our growth to be prepared for a more difficult economic environment next year...In terms of the fleet, that will be a net of between five to 10 airplanes.

That puts Southwest at odds with European low cost carriers--and the newest point-to-point LCC in the States, Skybus, who's busy adding lots of new routes and new planes. While Kelly doesn't name names, he does say:

We are not going in a direction like some of our European counterparts who, they don't capitalize "C" in customer, I assure you. It's just a very different approach. It's a desire to be cheap at all costs. And that's not who we are or where we're coming from.

With ruthless competition between price point and customer service, looks like Kelly could be right when he says, "It'll be an interesting 2008." If you wanna talk travel with us, Gary, be in touch!

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[Photo: StuSeeger]