Southwest's Acquisition Tightrope

Southwest's Acquisition Tightrope

Southwest CEO Gary Kelly was quoted in The Dallas Morning News, “At some point, I think we’ll probably acquire somebody. That’s just a reflection of my view that the industry is weak and that there’ll be players up for sale, probably in a fire-sale mode, and we’ll want to at least be thoughtful about that.”

He also mentioned that the new Business Select fare is a modest component of the airline’s goal to grow by 10 percent this year. “And then, Rapid Rewards, codesharing are the three major themes that are truly new for us, at least. I feel very confident that there’s a portfolio of ideas there worth $1 billion [10 percent of the 10 billion-dollar company].”

When asked how the airline can adjust and continue to be “Southwest” and not like a legacy carrier, he said, “Well, that’s the tightrope. I don’t want to be like other airlines. We want to be Southwest. But we’re a business, so we also have to be profitable and prosperous in the way that we offer this. So I think that is the trick.”

To help with the bottom line, Southwest is now charging $25 to check a third bag and the fourth through ninth bag will cost you $50 each; and if you have more than nine bags, the cost will be $110 per bag. There’s never been a better time to pack light.

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