Southwest finds its fare hikes 'delightful'

The airline has raised ticket prices 6 times this year, but that seems not to have dented business much. With video updates.

By Kim Peterson Mar 22, 2011 12:13PM

Higher airfares are a bummer, unless you're the chief executive of Southwest Airlines (LUV). Gary Kelly said he's had "delightful success" bumping up ticket prices to pay for higher fuel costs.

I doubt any of Southwest's passengers would describe the higher fares as delightful, but the price hikes didn't keep them away. In fact, Southwest's passengers flew 13% more in February than a year earlier. That's why Southwest isn't ruling out future fare increases, The Associated Press reports.

"We've had six fare increases so far this year. That's a lot in 90 days," Kelly said at an investor conference, the AP reports. "On the other hand, our traffic has held up more than well -- it's been very, very strong."

Post continues after this video analysis of Southwest's recent earnings:

Southwest shares have not held up as well. The stock has roller-coastered over the past year, dropping about 6% to $12.32. Year to date, shares are down 7%.

Fare hikes aren't stopping the carrier from increasing its capacity by 5% to 6% over last year. The airline will also begin flying to three more cities: Charleston and Greenville, S.C., and Newark, N.J. Southwest doesn't fly overseas.

Not every airline is doing as well. Delta Air (DAL) said it will cut its capacity to Japan by up to 20% through May, Bloomberg reported. Japan is a key hub for the airline, and those reductions will have a net impact of between $250 million and $400 million. American Airlines (AMR) is maintaining its current capacity but said it saw a "modest" revenue drop after the Japan crisis.

US Airways (LCC) said its bookings dropped 20% on the day of the Japan earthquake. Bookings are still down by a "couple percent," the airline said.

0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

118
118 rated 1
270
270 rated 2
472
472 rated 3
714
714 rated 4
624
624 rated 5
608
608 rated 6
623
623 rated 7
445
445 rated 8
319
319 rated 9
125
125 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ARCPAMERICAN REALTY CAPITAL PROPERTIES Inc10
ATVIACTIVISION BLIZZARD Inc10
BIDUBAIDU Inc10
BMYBRISTOL-MYERS SQUIBB CO.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.