Thursday, October 02, 2008

Southwest Airlines Expands as Other Companies Struggle to Survive

In the midst of mergers between major Airlines such as Delta and Northwest, one company has defied the odds and continues to build on it strong base: Southwest, which just added a Minneapolis-Chicago connection to its flight list.

Through savvy tactics such as fuel hedging , Southwest carries more passengers than any other airline, manages to preserve profits and maintain low fares, while other airlines are scrambling for solutions. However, there is one major difference to this expansion, because Southwest typically adds multiple routes in a new market. So why didn't the ambitious airline add extra routes this time? Well, CEO Gary Kelly told Startribune.com.

The outlook for next year is a little dubious for our economy, for the airline industry and for Southwest Airlines. You couple that with very high fuel prices and it's just a time for us to be very cautious.

Considering the comparatively high-priced tickets offered by Southwest's competitors, Minneapolis and Chicago passengers should greet the news with open arms. USA Today claims that  fares currently range between $270 and $436.50 one way for coach and cites Southwest's Dallas-Houston route as an indication of what it might offer between MSP and Chicago Midway, adding that fares on that route "currently range between $74 and $137 one-way. Those fares, combined with Southwest's promise of no extra baggage fees,means they already have a major advantage over the competition.

Southwest's slowed yet steady rate of expansion is a strong illustration that smart leadership can guide a company to success, even in an industry that's struggling through treacherous times.

By Matt O'Hern at 03:52 PM | Comments (0)

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