Dallas – The chief executive of Southwest Airlines Co. said Wednesday that the low-cost carrier could be forced to put the brakes on growth because revenue isn’t rising as fast as expected.
Southwest has been growing about 8 percent a year by adding planes and serving more cities, but it might have overshot the runway. Occupancy on its planes has fallen, and it can’t raise fares enough to cover increased fuel costs.
CEO Gary Kelly said company officials set their 2007 plans assuming a stronger economy, “and if that’s not going to be the case, then we’ll need to make some adjustments.”
Southwest is still a growth company, Kelly said, but 8 percent “is not a magic number.”
He said it was logical to think that “if the revenue environment is weaker, perhaps we should grow slower, and that’s just something that we’re thinking through.”
Kelly spoke at an investor conference in New York, where executives of other carriers offered different views on challenges facing the airline industry, which is making a precarious comeback after a five- year nose dive.
Gerard Arpey, chairman and CEO of American Airlines and parent AMR Corp., blamed too many airlines adding too many flights.
“We don’t see a demand problem. We see a supply problem,” Arpey said.
