Denver International Airport has not yet become a big transfer spot for cross-country travel on Southwest Airlines, but it will eventually, predicted Southwest chief executive Gary Kelly.
“There’s not enough flight activity yet to really envision it that way, but as time goes by and we have more flights, it will be a natural connection point, geographically,” Kelly said. “So that certainly enhances our ability to continue to add more flights here.”
Southwest’s Denver flights are not as full as they were after the carrier first started flying to Denver in January 2006, Kelly acknowledged.
“Our load factors are down only because we’ve added more flights and we simply haven’t absorbed those new flights yet,” Kelly said. “What we’re doing is growing the market.”
Southwest will continue to add flights in Denver this year, but Kelly is hesitant to make a firm commitment on new gates to be built at Denver International Airport. Other airlines may compete for the eight or more additional gates DIA plans to build on Concourse C, where Southwest operates.
“We’ll want to grow Denver at the right pace,” Kelly said after speaking at a Chief Executive Network conference at the Grand Hyatt in downtown Denver on Friday. “At this point, we’re just taking our chances that we’ll get what we need without making any costly commitment.”
Southwest is taking on a fifth gate at DIA and recently announced new flights from Denver to Oakland, Calif., to start in June. By then, it will fly to 11 cities from Denver.
The airline is considering going from no-frills to some frills, as Kelly also predicted that low fares alone may not give it enough of a competitive edge in the future.
He said low-cost carriers such as Frontier Airlines have low costs because of low labor costs, while for Southwest efficiencies are a big driver of lower costs.
In Denver, “United is obviously the largest competitor with the most flights, and they’re a very formidable competitor in that sense,” Kelly said.
“Frontier has a strong brand and is also a very formidable, very able competitor,” he said.
Because Southwest increasingly competes against leaner major airlines and low-cost carriers in Denver and the rest of the country, “looking forward I feel we have to compete more on service,” said Kelly. He said Southwest is considering additional services such as assigned seating and in-flight entertainment.
Staff writer Kelly Yamanouchi can be reached at 303-954-1488 or kyamanouchi@denverpost.com.
