Southwest wants to be in Wichita
CEO says he can't make promises, though
05/03/2011 3:54 PM
08/08/2014 10:03 AM
DALLAS — Southwest Airlines CEO Gary Kelly said Friday that the airline wants to keep Wichita and similar cities in its system after it closes on its purchase of AirTran Airways.
"We're going to make every effort to keep every AirTran city that they're currently serving," Kelly said in an interview after a panel discussion on the future of U.S. airlines at the Society of American Business Editors and Writers conference at Southern Methodist University.
However, he cautioned that he can't make any promises until after the deal is completed and he gets a clear picture about the viability of AirTran's service from Wichita Mid-Continent Airport.
"We're still competitors until we close," Kelly said. "So we'll look at all that and we'll make a judgment about what routes we want to change."
Southwest announced in September that it is buying AirTran for $1.4 billion. Kelly said he expects the sale to close by the end of the second quarter.
AirTran, which has three daily flights between Wichita and Atlanta, has flown from Mid-Continent since 2002 and is credited for lowering fares from the airport. It receives subsidies from the state, Sedgwick County and the city to help offset its losses.
The state's $5 million subsidy, which runs out this year, was cut from the state budget last month by a House committee. But the Senate Ways and Means Committee voted to fully fund the program for next year. A conference committee of senators and representatives has been meeting to try to work out the differences between the bills.
Kelly couldn't say how subsidies might play into Southwest's decision. The airline hasn't used government subsidies in the past.
"If it only works now because of the subsidy AirTran got, well, we're going to have to think about that," he said. "It's not because we want it, but it's just a balancing act here. If we say, 'Nope, we don't want a subsidy,' and then that means we have to close that, that may not be in the best interest of the community."
He said he didn't anticipate any changes this year because AirTran has already published its schedule through the end of 2011.
"I think we will need to manage our own business, and we need to maintain our profitability," Kelly said. "The stay-awake-at-night problem now is fuel. Fuel is up to 111 bucks today. So that has to weigh on us.
"AirTran's been profitable. So if we're inheriting some unprofitable markets, we just may not be able to afford that. And I think that would cause us clearly to move aggressively.
"If they're stable and they're profitable, I think we would prefer that we take our time. If Wichita's not working today, I'd at least like the opportunity to say, 'Well, what if we add these kinds of flights or move them around to these markets?' and none of that work has been done to this point."