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Originally published Tuesday, March 10, 2009 at 10:02 AM


Travel slump hasn't hit bottom, says Southwest Airlines chief

Air travel keeps tumbling, and Southwest Airlines chief warns the travel industry hasn't yet hit bottom

Associated Press


The chief executive of Southwest Airlines says travel slumped in early March from February's already sluggish pace and the airline industry hasn't yet hit bottom amid a recession.

Gary Kelly said Tuesday that a key measure of revenue fell 7 percent in the first week of March. That followed a 6 percent slump in traffic during February, which Kelly said was much weaker than January.

"I don't know that we've reached the bottom, and certainly in an environment like this it makes it pretty tough to forecast," Kelly said at an investor conference in New York.

Business travel in particular has dropped off, and those customers often buy tickets late and fly at full fare, Kelly said. When companies cut costs, "one of the first things they attack is the travel budget," he said.

Kelly said the current airline downturn resembled one from 1991 but could be worse.

"I think we're all worried that this is sort of the 100-year flood in economic terms and that what we saw in 1991 is going to be worse this time," he said. "I think we all have to be prepared for a really tough environment and one that lasts for a long time."

Southwest has been cutting unprofitable routes and plans to reduce capacity 4 percent this year. But it just launched service in Minneapolis and plans to expand to Boston's Logan Airport and New York's LaGuardia later this year. Kelly said it can make those moves without adding to its fleet of 535 jets.

Copyright © 2009 The Seattle Times Company

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