"Southwest may consider adding smaller jets"

Monday, September 1, 2003

Southwest Air may consider adding smaller jets
Bloomberg News


DALLAS - Southwest Airlines Co., the discount carrier that flies only Boeing
737 jetliners to keep costs low, will consider adding smaller aircraft,
Chief Executive Officer James Parker said.

Dallas-based Southwest flies four types of 737s, eliminating the cost to
train crews and mechanics and maintain parts for planes made by other
manufacturers. 

"That whole issue of smaller airplanes is not something we are going to
ignore," Parker said in a recent interview. "We're going to look at it, in
light of the new technology that's available, and try to make a rational
decision whether it makes sense for us to consider some smaller airplanes."

Southwest is the only major U.S. airline to post profits since the September
2001 terrorist attacks. Its competitors had losses exceeding $20 billion.

Expansion by low-fare carriers will force Southwest to start serving markets
where rivals such as JetBlue fly, or move into smaller cities, said Dan
Kasper, an airline economist for LECG LLC, a legal and economic consulting
group in Cambridge, Mass. 

"The bigger they get and the more diverse the markets become, it implies
they have to add a different aircraft type at some time," he said. "No other
airline in history has operated a single fleet type that large."

Southwest officials have not spoken recently with Brazil's Embraer, the only
company making a 100-seat jet, Parker said in his Dallas office. The
carrier, which flies to 58 cities in 30 states, previously considered and
rejected adding 50- or 70-seat jets because they were not cost effective.

Southwest has 381 planes, with the smallest of its 737s carrying 122
passengers. 

Southwest isn't pursuing the purchase of a smaller jet more aggressively
than in the past, yet Parker said he "wouldn't rule it out."


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