The financial performance out of Dallas has been superb from day one. So the improvement may not be as sharp in those markets as it will be in some others, but nonetheless, I absolutely would expect they will continue to see improvement from that capacity.The Wright Amendment expired about a year ago, allowing Southwest Airlines to start expanding rapidly at Love Field in Dallas. By the end of Q3, Southwest was offering nearly three times as much capacity as a year earlier. Southwest is starting to lap that growth this quarter.
-- Southwest Airlines CEO Gary Kelly
On a unit basis, our third quarter operating revenues declined 0.4% on a 7.6% capacity increase. And we are pleased with this very solid performance, especially considering the impact of increased stage length ... as well as the high percentage of development markets...Southwest Airlines' unit revenue declined 4.7% year over year in Q2 because of a weakening fare environment in the U.S. Last quarter, Southwest's unit revenue trend improved dramatically, registering a decline of just 0.4%. About 2.5 percentage points of the sequential improvement was driven by Southwest's revised credit card agreement with JPMorgan Chase.
-- Southwest Airlines CFO Tammy Romo
While we have significant opportunities, we also have significant access to low-cost incremental capacity to pursue these opportunities. And that's through the restoration of our aircraft utilization to more historic levels.Southwest CEO Gary Kelly also noted that Southwest has been able to ramp up its growth this year at a very low cost by increasing aircraft utilization. For the past few years, the AirTran integration has hurt utilization as there were always some planes being converted to the Southwest configuration, or in the process of leaving the fleet.
-- Gary Kelly
[In the U.S.], we have a variety of opportunities to add nonstop segments. And especially in short-haul markets, if those markets begin to return to pre-2000 traffic levels, we'll have a lot of opportunities to add frequencies in those markets as examples.Earlier this month, Southwest Airlines opened its new international terminal in Houston with great fanfare. However, while the international market is a key growth opportunity going forward, Southwest expects the bulk of its growth to remain in the domestic market.
-- Gary Kelly
Last year, Mike, we were at 83% annual load factor. That's 15 points higher than what we produced 15 years ago in the year 2000. ... So it seems to me unless we continue to evolve more toward trying to fill airplanes up with connections, we're going to be somewhere here in the low 80s.One area where Southwest Airlines may be running out of opportunities is in filling empty seats. Historically, the company has had a lower load factor than the industry, which Gary Kelly attributes to its focus on point-to-point traffic. By contrast, many airlines schedule their flights to maximize connecting opportunities, which keeps their planes fuller.
-- Gary Kelly
(Adam Levine-Weinberg - The Motley Fool)