Southwest Airlines CEO Talks Plans, Growth For Las Vegas

Gary Kelly has a lot on his plate, and that's very good news for Las Vegas.

The chairman, president and CEO of Dallas-based Southwest Airlines, the busiest commercial air carrier at McCarran International Airport, has been on the go during the past year, which means it's a lock that his calendar will be full for the next five.

In a short time, Southwest has acquired AirTran, signed deals with Boeing to take delivery of new 737-800 jets that have a larger capacity than the planes the airline now flies, and started a partnership with a Mexican carrier, Volaris, to provide service for Southwest customers to Mexico and Volaris customers to nearly everywhere in the United States. Southwest accomplished all of that while maintaining profitability for its 38th straight year in the midst of the nation's worst-ever recession and skyrocketing fuel costs that threw many of its rivals for a loop.

With Las Vegas mired in a deeper recession than most of the country, McCarran recently ceded its position of busiest Southwest station to Chicago's Midway Airport. Las Vegas is No. 2 with 226 daily nonstop departures to 55 cities. Using 19 McCarran gates, Southwest also provides jobs to 2,700 employees in Las Vegas.

Southwest started flying to Las Vegas in 1982, four years before Kelly joined the airline after working as a CPA for Arthur Young & Co. in Dallas. He was named chief financial officer in 1989 and moved up the ranks under the tutelage of Southwest's legendary co-founder and chairman emeritus Herb Kelleher. Kelly was named CEO in 2004 and took on the president's and chairman's roles in 2008.

Kelly talked with VEGAS INC about the airline's potential growth at McCarran, what the acquisition of AirTran will mean for Las Vegas and the success of its "bags fly free" marketing campaign.

What's the first word you want your customer to think when they hear "Southwest Airlines"?

Friendly. I think that's one thing that really sets Southwest apart from the competition. Of course, we're famous for low fares, but I feel what people really love about Southwest is our people and how friendly they are.

Southwest Airlines continues to be the busiest air carrier at McCarran International Airport. Is there any way the company could grow even more in Las Vegas?

I hope so. We're still continuing to recover from the recession and looking for opportunities to grow. We're obviously combating high fuel prices, but we're seeing a nice recovery and our traffic is up year over year and up compared with 2009, so it's all dependent on customer demand--and demand, of course, is going to be somewhat dependent on fares and fuel prices. We're at 227 daily departures today and we've got capacity to add more flights to that, and we'll continue to look for opportunities to grow in Las Vegas. The other thing I'd mention in terms of growth is that we're working on integrating AirTran into Southwest Airlines.

What will the acquisition of AirTran bring to Las Vegas?

I hope it brings a lot. Las Vegas is such a popular destination in the United States, certainly a top destination. We'll be adding somewhere around 35 new Southwest destinations, plus or minus, with the AirTran acquisition. Obviously, it's still early in that integration process. All of those new destinations for Southwest will potentially be new nonstops for Las Vegas. Clearly, we won't be adding 35 new nonstops, but my point is that there are a lot of new markets we'll be adding, Atlanta in particular. We'll give a good hard look at whether we want to have nonstop service into Las Vegas for all of those. Even if we don't have nonstop service, you'll see more traffic flowing in and out of Las Vegas if only on a one-stop basis. Anytime we can add destinations to the Southwest route map, that will be very good for Las Vegas.