Things in the Sky

Yesterday, I wrote about Gary Kelly’s speech at the AAAE convention, and today I would like to share the highlights of the question and answer session, and some parts of it were very interesting.

The first question was about business travel, and to be honest Gary’s response wasn’t too shocking – customer feedback has been positive, and the company is trying to move away from a “one size fits all” model to one that provides more customer choice.

Next up was about international service, and Gary said that Southwest’s systems still aren’t capable of generating international reservations, but that will be coming. Gary then said that since Southwest has flies only the 737, markets like Mexico, Canada, and the Caribbean make sense for consideration and that “we’ll be evaluating those [international markets] in future years, but it is not a priority.”

He then said that Southwest is still focusing on its domestic network, and mentioned the new stations opening this year. Finally, he said WestJet and Volaris would be coming next year, and there’s nothing for the Caribbean and Hawaii yet. So, even though Gary said that international markets would be far off, for me that’s the first time I have heard someone from Southwest say that flying to international markets with their own fleet would even be considered. Personally, I think the negotiations with pilots will have a big impact on Southwest’s next move in this area, since codesharing was a big issue.

Next was the really interesting question. Someone asked for Gary’s opinion on proposed high speed rail projects, specifically in Texas (quick history lesson – last time a proposal got somewhere Southwest did a hell of a lot of lobbying to stop it). Gary said that neither Southwest nor the ATA have taken a stance on this issue, but it would be “worthy of consideration.” Gary then took this opportunity to criticize the stimulus bill, as he feels that aviation got a very small amount of cash, and was disappointed that NextGen received no funding (I agree – so much for “infrastructure” investment). He then said that investment in aviation has a much better return than in high speed rail, and that “there’s no high speed rail system in the world that I’m aware of that can operate without subsidy.”

The next question was about Boston, and its effects on Providence and Manchester. Gary said that many years ago, Southwest was pretty much the only low fare carrier. But now more low fare airlines exist. I am pretty sure that in this case, Gary was referring to the presence of AirTran and JetBlue in Boston. And he makes a good point – if there’s good service out of Logan, people near the city are less likely to drive to PVD or MHT. Gary said that not many people going to Boston choose PVD and MHT, and most of the customers for those airports live near them. Therefore, the Boston service is more to attract passengers in that downtown area, and shouldn’t hurt PVD or MHT.

Next was LaGuardia and what Southwest will have to do in the scheduling department. Gary really didn’t have much to say in terms of specifics here, so take a look at this great post on the issue that Cranky wrote back in April.

Someone else got up to talk about a proposal to increase ARFF requirements, and why the ATA has yet to weigh in. (I assume they’re talking about this measure discussed in an IAFF press release.) Gary said that the ATA has just yet to focus on it. Then another airport executive spoke about it. She said that her airport, Reno, will have to increase full time firefighters from 20 to 52 and build a second fire station if this measure passes. She then went on to say that would increase annual cost per passenger by $3, and the airport would need $20 million in capital. Obviously, that’s expense for airports, and the airports would have to pass those costs along to the airlines. It doesn’t seem like anyone wants to compromise safety here, but the airports are concerned about excessive costs.

Alright, now I’m officially done with AAAE posts.