Amazon Contextual Product Ads

Thursday, June 26, 2008

Southwest Airlines, The Only Airline With a Sound Business Model?

In April I took a vacation to Las Vegas. My airline of choice was Southwest. I was able to get the incredibly low fare of $80 each way through a special promotion called “Get Away Fares.” Other airlines price based on what all the other airlines are doing, but Southwest seems to truly have “sale” fares. If you are flexible in the days and times you leave, Southwest can save you a bundle. For example Southwest Airlines doesn’t charge you for your second bag as some other airlines do, then also throw in free curbside check-in. To find Southwest’s sale offers on the main page click on the “Special Offers” tab on the top of the page. One of the top offers currently is flying nonstop between Denver, CO and select West Coast cities for $79 one-way. Not bad in the era of rising jet fuel prices. “The Dallas-based airline has used derivatives to hedge the cost of more than 70% of its estimated fuel consumption for 2008 and 55% of its estimated costs for 2009 and is paying a price equivalent to $51 per barrel of crude oil (WashingtonPost.com).” In an article titled ‘Why Southwest Soars While Other Airlines Sag’ in the Chicago Sun Times Southwest Airlines chief executive officer Gary Kelly states, “We now board more passengers annually than any other airline in the world.” According to TheStreet.com revenues for Southwest were up 15.10% last quarter. The stock price (LUV) is up 25.85% over the last 3 months.


No comments: