Southwest Considers In-Flight Internet

FORT WORTH, Texas -- Southwest Airlines, long renowned for its no-frills service, is considering selling in-flight perks such as on-board wireless Internet as it faces softening travel demand and rising costs.

The Dallas-based airline, the nation's largest discounter, reported a first-quarter profit of $93 million, its 64th consecutive quarterly profit. But executives warned they were seeing signs of declining demand for travel in domestic markets.

"It's clear the trend has changed from last year," said Gary Kelly, the airline's chief executive. "There's no evidence in second-quarter data to suggest any strengthening of demand from the first quarter."

Softer demand typically makes it difficult for airlines to bring in more money through higher fares. That has intensified efforts at Southwest to come up with additional ways to bring in dollars.

The airline is looking for a partner to develop a prototype for wireless Internet service during flights. Passengers would presumably pay a fee to connect with their laptop or portable device during the flight.

While no major U.S. carriers currently feature in-flight Internet service, several European airlines offer it. German airline Lufthansa launched broadband service in 2004, charging passengers $30 for access during the entire flight or $10 for 30 minutes of use.

A Louisville, Colo., firm, AirCell, has said it can offer broadband service to commercial carriers in the United States using a radio spectrum license it acquired last year. Boeing also offers a service.

Frontier Airlines and US Airways are among those also considering the service.

"We want to add things to our brand that will enhance our ability to keep customers happy and get more customers," Kelly said.

He declined to name other fee-based services Southwest is considering. In the past, Southwest has tested assigned seating, and some analysts have speculated it could charge passengers who prefer assigned seats. The airline could also begin selling in-flight food or offering on-board entertainment for a fee.



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