Since it took off more than three decades ago, Southwest Airlines has grown rapidly by bucking the industry – resisting assigned seating, in-flight meals and the temptation to expand overseas.
Now, facing rising costs, more competition from copycats and the prospect of slower domestic growth, the nation’s largest low-cost carrier is planning to make its boldest move ever: Next year, Southwest will begin providing connecting domestic flights to passengers arriving in the U.S. on international airlines.
“We have to find a way to get our revenues up, and there are two basic ways to do it,” Chief Executive Gary Kelly said in a recent interview, “higher fares – or get more passengers per flight.”
Southwest will aim for the latter. Eventually, Southwest might fly its own international routes, perhaps first to Mexico and Canada before taking on Asia and Europe.
The initial plan would be for a passenger to be able to book an international flight with Southwest, starting in Corpus Christi, Texas, for instance, and connecting to another carrier at Los Angeles International Airport to reach a foreign city.
International code sharing, as it’s called, “is the foundation for us to move to the next step to fly it ourselves if we chose to do that,” Kelly said. For now, he said, partnerships with international carriers would help Southwest put more people on its planes.
Later this fall, Kelly said, Southwest might announce several other new initiatives, possibly including seating assignments and meals as well as onboard Internet connections – services it has rebuked because of cost.
“They’re talking about transforming themselves into a more business-friendly airline,” said Susan Donofrio, an airline analyst with Cathay Financial Inc. “They’re more of a mature airline, and certainly to continue their strong revenue growth they have to appeal to new constituents.”
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