Southwest CEO: No-bag-fee policy to stay, codeshares ‘perhaps by 2011’
Southwest will continue to allow customers to check two bags for free, the airline’s CEO tells Tampa Tribune reporter Ted Jackovics. Speaking to Jackovics for a Q&A that runs in the Tribune, Southwest chief Gary Kelly defended the no-bag-fee policy against criticism from Wall Street analysts. Many of those analysts say Southwest is walking away from hundreds of millions of dollars in revenue by not charging for bags.
“The analysts just don’t get it,” Kelly tells Jackovics. “We are making money and others (who have added baggage fees) are losing money. We have gained market share because of our policy. If we added baggage fees, we could lose more revenue from lost passengers than we would gain by charging those who remain with Southwest.”
When asked by Jackovics if that will remain Southwest’s policy, Kelly says: “Yes, we can never say never in perpetuity. But we are not thinking about making changes. Why should we? It differentiates Southwest from the other airlines.”
Kelly also made an interesting comment about Southwest’s plans for its international codeshare plans with Canada’s WestJet and Mexico’s Volaris. Those agreements had widely been expected to begin this year. But when asked about Southwest’s outlook for international service, Kelly tells Jackovics: “We have plans for codeshares with other airlines to serve Mexico and Canada, perhaps by 2011.” While that does not spell out any clear-cut changes, Kelly’s “perhaps” comment seems likely to stir up speculation among industry observers.
Elsewhere, CFO Laura Wright is anothSouthwest maintains timeline for Volaris codeshareer Southwest official being quoted in the news this week. In a story carried by Reuters, Wright says Southwest is open to growing by acquiring a rival, though she adds the carrier’s preference would be to grow organically. “No question, if the right opportunity presented itself with all the right facts, we would certainly be interested,” Wright says in the Reuters story. But, she adds: “From where we sit, we don’t see consolidation as something that’s necessary for us.”