More Opportunities Than Planes at Southwest

Some analysts question the company's moves, speculating that it appears to be running out of solid growth prospects.


On overall growth in 2007:

We have a plan that is pretty well formulated through much of the first half of the year, where we'll pretty much focus on our current markets rather than new ones. We don't have all our plans set for the rest of 2007 though. The conflict, as usual, is that we have more opportunities than we have airplanes. But if we can get through the year without adding a new market and it supports our overall strategies and growth objectives, I think that would be preferred.

On being flexible:

Sometimes opportunities present themselves and you've got to move. We know better than to get locked down and say this is what we're going to do for the year and then not be able to react to changing conditions. Washington Dulles is an example of that. If you go back a year ago, we weren't even planning on going to Dulles. And then things happened in the first quarter of this year. The airport's costs were much more favorable than what we had understood, and Independence Air shut down. There was an opportunity there that was different than last fall. So we decided to move on that.

On the dangers of expanding too rapidly:

From the outset we try to plan our aircraft growth conservatively. We're talking about 8 percent growth next year, not 20 percent. We've positioned ourselves where it's less likely that we'll need to throttle back. We feel that because our costs are low, because our fares are low, there's a much larger potential market where we add service. Therefore the risk that we're wrong is mitigated. If you come into a market with more service and higher fares, you're just going to have a smaller universe of passengers.

On industry consolidation:

There are still too many seats, and the flying is inefficient. I don't think the hub-and-spoke system is so great for customers. There are still arguably too many hubs, and the industry is a financial failure still. Something needs to dramatically change to have an industry as a whole that is successful, and consolidation makes sense. I don't think you need 20 airlines, although I don't know whether you want just two.



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