Monday, May 23, 2011

Business Select contributes to strong revenue growth for Southwest Airlines

Southwest Airlines Senior VP and CFO Laura Wright said that specific revenue initiatives undertaken by the carrier helped to boost sales by $2.2 billion between 2007 and 2010, exceeding the carrier's target of growing top-line revenue by $1.5 billion. Addressing the Bank of America Merrill Lynch Global Transportation Conference, available via webcast,Wright noted that the revenue growth was achieved "on capacity that was slightly down" from 2007."

Among successful initiatives she identified is the carrier's Business Select program that gives customers in the highest fare buckets priority in boarding the aircraft as well as other perks. Incremental revenues from Business Select in the 2011 first quarter were $24 million, up from $21 million in the year-ago period with passengers up 12%, she said.

Another success is the "Early Bird" product that allows customers to pay $10 to get an early boarding number. "We are well ahead of what we initially thought we would achieve with this product," she said. The airline had "an annual goal of $100 million in incremental revenue and in the first quarter we had $34 million, which was double what we earned the previous year." The service is being used by 16%-17% of customers.

Additionally, the easing of the Wright Amendment, which gave SWA the ability to begin offering additional connections out of Dallas Love Field on a one-stop or connecting basis, contributed $59 million in incremental revenues in the first quarter, up from $47 million a year ago, she said.

(Linda Blachly - ATWOnline News)

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