Southwest Airlines executive says growth plans are taking back seat to better profits

Southwest exec says growth plans on back burner

DALLAS — A top Southwest Airlines Co. official says the discount carrier is taking a slow approach to expansion in new markets until it can boost profits.

Chief Financial Officer Laura Wright said Tuesday that there are still plenty of cities lobbying for service by Southwest, which so far has announced only one new market for 2010 — Panama City, Fla.

Last year, Southwest started service in Minneapolis, Milwaukee, Boston and at New York’s LaGuardia Airport. The airline is dampening expectations of other potential new markets.

“We’re just in a period where our focus right now is on improving our profitability and not growing” the fleet, Wright said at an investor conference in New York.

Southwest expects little change in its fleet of more than 530 Boeing 737 aircraft. It held fleet size stable last year but expanded to four additional cities by cutting unprofitable flights elsewhere, freeing up some planes. It also began small in the new markets — just eight daily flights at LaGuardia, for example.

Wright said the airline is interested in expanding at LaGuardia if it can get more takeoff and landing slots at the crowded airport close to Manhattan.

Southwest has been the most consistently profitable major U.S. carrier, with a string of moneymaking years going back to the early 1970s. However, its profit has shriveled in recent years, from $645 million in 2007 to $178 million in 2008 and $99 million last year.

The airline took a hit from last month’s big storms along the East Coast, which caused it to cancel 3,400 flights and lose $15 million in revenue. Wright said March bookings have been strong.