Southwest Airlines Turns 30

Filed in archive Aviation Travel on June 26, 2007

Southwest Airlines celebrated its 30th anniversary today. However, executives at the once dominant airline are withholding the cake and balloons for now.

The low-cost airline was the first of its kind in the United States. But, competition from other airlines, including the revitalized Delta and JetBlue have Southwest looking for ways to win back favor in the industry.

Southwest, which still has lower costs than most of its rivals and an unparalleled track record of profitability, is weighing responses that could include slowing fleet expansion, partnering with other carriers, and pursuing new sources of revenue such as selling hotel rooms through its Web site and offering in-flight Internet access.

"There's a transformation process under way," said Chief Executive Gary Kelly, speaking in New York at the Fortune Leadership Forum on Tuesday. "It's an intense time. I don't think our officers have ever worked harder."

More details of its plans are expected Wednesday, when the company hosts an analyst conference. Southwest, the sixth-largest carrier in the U.S. in terms of passenger traffic but the largest by market value, declined to comment on the plans beforehand.

The changes under way at the Dallas-based company, which Kelly says has never laid off staff or cut pay, could challenge the cozy relationship between management and labor. A committed workforce has been credited with fueling Southwest's strong customer satisfaction and earnings.

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