ON THE HOT SEAT
As Boston service starts, Southwest looks ahead
By Katie Johnston Chase, Globe Staff | August 16, 2009
From its humble beginnings as a Texas-only carrier in 1971, Southwest Airlines has become the biggest domestic carrier in the United States, based on passenger numbers.
And the airline’s steady expansion continues, even during an economic downturn that has seen a decrease in the number of travelers. Southwest is entering four new markets this year and tried - unsuccessfully - to take over the bankrupt Frontier Airlines.
Today, Southwest begins service out of Boston - its 67th city - with four direct flights from Logan International Airport to Baltimore and four to Chicago. During the week, that number goes up to 10 nonstop flights a day.
Southwest chief executive Gary Kelly, a 54-year-old former quarterback for the University of Texas-El Paso, spoke with Globe reporter Katie Johnston Chase at the Langham Hotel on last week to talk about the carrier’s ambitions for Boston and beyond.
Southwest is starting with flights to Baltimore and Chicago, and everyone is very curious which destinations you’ll be adding. What are some Boston routes the airline might consider next?
I think that there’s a whole list of potential cities for us to consider, but for now we’re trying to approach the year very cautiously. It’s just a very difficult economy. We’ve got very weak business travel demand. We’re concerned about rising fuel prices. . . . There’s every good reason to believe we can grow in the future. It’s just again, we don’t want to get ahead of ourselves yet.
There’s lots of competition at Logan, and since you’ve announced service here, some airlines have slashed fares on competing routes. Why should Boston area travelers choose Southwest?
We always have the effect of bringing down fares in the market, so travelers in and out of Boston can thank Southwest for that. We’re the low-fare leader and very, very proud of that. That’s our specialty. In addition to that, though, you’ve got the airline with the best customer satisfaction record, year in and year out, according to the [Department of Transportation] statistics. So we bring a unique brand of customer experience, and certainly our low fares, but also great people. Year in and year out, we’re at the top of the on-time performance list. We have great baggage handling, and we’re just continuing to expand our route system.
A lot of business travelers fly in and out of Boston. Is Southwest doing anything to court them specifically?
In 2007 we improved our overall boarding process. We created a new product called Business Select. If you buy our Business Select fare, that allows you to board the aircraft first, get your pick of seats. We offer open seating. You also get frequent flier credit, as well as a free cocktail.
A free cocktail - important for business travelers . . .
Very important.
We don’t offer a lot of frills, but on the other hand we’re very easy to do business with. We don’t charge change fees, we don’t nickel and dime you for baggage fees and things of that nature.
One onboard amenity that we’re working on is Wi-Fi. In fact, we launched a prototype early, and we’re still on the prototype stage, but I hope we have a decision on that soon.
Many airlines have started charging for checked baggage to generate more revenue, but the first two bags are still free on Southwest. Does Southwest plan to start charging for bags?
We don’t. And that’s not to say that we won’t revisit that. . . . But no, we have no plans to charge any bag fees this year.
Southwest recently raised the fees for overweight or third checked bags to $50, and started charging $25 for unaccompanied minors. Why?
We’re trying to match the fare to the service, and there’s just a lot of additional work involved certainly with heavy bags. And we think we’re already very generous with two free checked bags. And then the same applies to unaccompanied minors. There’s a significant number of additional steps involved with taking them into our care.
In May, Southwest also started allowing dogs and cats to fly, for a $75 fee. Are you feeling the heat from Pet Airways, the new airline that caters only to pets?
You know, we’re both sort of getting into the business at the same time, so I really don’t know. I don’t know how good they’re doing. So far, I haven’t got one complaint from a cat, not one complaint from a dog, so I’m a little envious of Pet Airways.
After making deals with Canadian and Mexican carriers - and bidding for Frontier, which flies to Mexico - Southwest appears to be gearing up to fly internationally. When do you foresee that happening?
I don’t think it will be before 2011, if then.
We have WestJet to Canada, Volaris to Mexico. That will be our first step internationally, and then we’ll evaluate from there whether we want to fly some of our own jets internationally.
But our first step is going to be . . . next year.
At a time when fewer people are traveling, Southwest is entering four new markets this year and tried to acquire another airline. Can you explain your growth strategy, and how does Boston fit into it?
It’s all about winning more customers. In this decade, we’ve seen the industry operating costs and ours in particular increase significantly.
So we have a need for higher revenues to offset higher operating costs, and until we get our finances stabilized, if you will, it does not make sense to grow the fleet. So that’s step one. So we plan to end this year with roughly the same number of airplanes as when we started [the year.] And likewise we don’t plan to grow our fleet in 2010.
We can still grow our route map because we have developed some very sophisticated aircraft-scheduling-optimization tools. . . . We can literally rewrite our schedule every time we publish it. . . . So what does that mean? It means we go in and we eliminate the unprofitable flights and we take that aircraft and we find a better use for it.
How will Providence and Manchester fit into your strategy? Will Southwest cut more flights in these cities as it grows in the Boston market?
We are trimming flights across the country to match the current economic environment, so that will continue to happen - and potentially again in Manchester and Providence.
But I don’t see that Boston Logan will cannibalize those markets. By all the research that we’ve done, the majority of customers that we serve out of Manchester and Providence are those local customers.
What else would you like people to know about Southwest?
We really do treat each other like family, and we try to extend from that to treat our customers like they’re guests in our homes. But it starts with the family feel, which is a genuine interest in people and having real empathy for what they do and the struggles that they go through. And a real support for trying to help people do their jobs. But it’s more than just that, you know we have been successful for 38 years. We’ve been profitable every year since our first full year of operation. We have never had a furlough, never had a pay cut, never had a benefits cut.
Southwest has never had layoffs?
Never. And a lot of people assume, “Oh, well you’re low cost, that means old airplanes and you’re nonunion.’’ No, we’ve got a very young fleet, and we’re probably the most unionized carrier in the country. . . . So it’s a real special place.
© Copyright 2009 The New York Times Company
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