Southwest CEO Gary Kelly says charging passengers for extra services, such as selling meals on board flights, doesn't fit its business model.
Southwest Airlines isn't likely to jump on the latest travel trend -- selling food, entertainment and other amenities during flights.
Gary Kelly, chief executive of the Dallas-based airline, told Wall Street analysts Wednesday that charging customers for additional services like food doesn't fit the carrier's business model.
"What we've chosen not to do is feed our customers to death," Kelly said during a speech at a Goldman Sachs airline conference in New York. "You won't see a dramatic change at Southwest in terms of add-on fees, whether it's fuel surcharges or selling meals on board or anything like that."
Several major airlines, including Fort Worth-based American Airlines, have begun selling a variety of items, including meals, snacks and portable entertainment devices, during flights.
It's generally seen as a way to raise money in an environment where the airlines are starved for more revenue.
But Southwest officials emphasized that their customers are used to a no-frills flight experience. The airline has famously eschewed in-flight meals for decades.
"What, are we going to charge people for the peanuts?" joked Ed Stewart, a Southwest spokesman. "That's just not the way we do things around here."
Southwest is the only major airline that has remained profitable since 2000. Last year, it reported a $313 million profit, while the six major hub carriers lost a combined $9.3 billion.
Still, Kelly said, Southwest, like its competitors, is challenged by high fuel prices and heavy competition.
"We are in a very, very difficult industry environment," he said.
One bright spot is the airline's recent deal with ATA Airlines, an Indianapolis-based discount carrier that's in bankruptcy. Late last year, Southwest invested $117 million in the airline, buying six of its gates at Chicago's Midway Airport, taking an equity position and inking a schedule-sharing deal.
Kelly said Wednesday that Southwest is on track to reap $100 million in annual revenues from the deal.
"From any perspective, that is a tremendous investment," he said.
Southwest's stock (ticker: LUV) closed Wednesday at $14.48 per share, up 36 cents.
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