As major airlines face bankruptcy, downsizing and skyrocketing fuel prices, there’s not much the industry has to celebrate.
That is, unless you’re Gary Kelly.
Kelly, who was named chief executive officer of Southwest Airlines last year at age 49, spoke with a slight Texas drawl as he greeted a group of employees Monday at Southwest Florida International Airport.
Southwest Airlines began service from the airport’s new Midfield Terminal on Sunday.
“We just don’t get to open in a new airport every day,” Kelly said. “We’ve been looking at Southwest Florida for years.”
Southwest Airlines, the nation’s largest and most profitable low-fare carrier, began service out of two of the new Midfield Terminal’s gates Sunday, with nine daily round-trip flights to Orlando, Baltimore/Washington, Chicago, Philadelphia and Long Island, N.Y.
The airport’s new terminal, which opened last month, was just part of Southwest’s decision to come to the Southwest Florida airport, Kelly said. The increase in the number of people flying in and out of Southwest Florida became the main draw.
“The primary factor was the growth in passenger demand,” Kelly said. “This market has been growing rapidly in the past 10 years.”
Last month, the airport recorded the busiest August in its 22-year history, with more than 446,000 passengers. With Southwest Airlines comes the carrier’s trademark low-cost fares and bargain one-way tickets priced as low as $29 and $79.
“Residents have waited a long time for Southwest to join us,” Lee County Commissioner Doug St. Cerny said at Monday’s ceremony.
Kelly acknowledged that rising fuel costs and recent bankruptcy filings by Delta Air Lines and Northwest Airlines have painted a bleak picture for the industry’s future.
Delta and Northwest, both carriers at Southwest Florida International Airport, filed for bankruptcy protection last month and became the third and fourth major carriers to go into Chapter 11 since the Sept. 11, 2001, terrorist attacks.
“Times have not been good for the airline industry,” Kelly said. “But we’re prepared. We’re prepared in a lot of ways.”
While oil price hikes have been a disaster for some carriers, Southwest Airlines has regularly bought contracts that lock in fuel prices at a certain level, giving the airline an advantage over other carriers. The airline will benefit from contracted fuel prices until 2009.
“With our dependency on energy around the world, we feel like we need that insurance,” Kelly said.
Last week, America West and US Airways merged to create an airline that could compete with carriers such as Southwest, which brings competition to airports through its low-priced tickets.
Whether Southwest will eventually merge with another airline remains to be seen, said Kelly, who predicted more bankruptcy filings and mergers to come.
“There are too many seats. Consolidation does need to take place,” Kelly said. “How we participate in this consolidation effort is still unclear.”
Southwest operates from one major hub in Chicago and has chosen new markets based on demand. While other major airlines fly several different kinds of aircraft to cities of all sizes, Southwest flies only one type of plane, the Boeing 737, and serves only domestic routes.
While locking in gas prices and attracting passengers with low fares plays a major role in the company’s success, Kelly said Southwest employees are one of the company’s key strategies.
“We’re more productive than any other work group in the United States,” Kelly said.
Southwest pilot Diane Myers, 43, has flown for the airline for nine years with plans to continue working for the airline until she retires.
“The best part about Southwest is that it is a fabulous company to work for,” Myers said.
As legacy carriers look to cut costs and downsize, Southwest has expanded its operations and began offering service from Pittsburgh in May. The company is also adding 34 more planes to its fleet next year.
“We’re going to continue to grow,” Kelly said.
Southwest’s service at the Midfield Terminal began with nine daily flights to destinations offering 29 different connecting flights, said GeorgeAnn Dingus, a Southwest Airlines marketing manager.
“Southwest doesn’t just come in with a few flights,” Dingus said. “This is pretty good for a city of this size.”
Additional service might be added.
“It just depends on the traffic,” Dingus said. “As we see that we need more flights and if the demand is there.”