Southwest Airlines is serious about generating incremental revenue through codeshare partnerships, so much so that it is in the midst of "record levels of investment in 2008 and 2009" for the technology that would facilitate them, according to CEO Gary Kelly.
The carrier's IT projects include replacing "virtually all of our legacy systems, including our revenue accounting system, which sets the stage for us to manage multiple airline codeshare relationships," Kelly said during today's Merrill Lynch 2008 Global Transportation Conference. "In addition to that, we are modifying our reservations technology to have fully functional code shares in there." Those upgrades--and others including revamped "airport point of sale systems"--are expected to be completed by mid-2009.
Kelly again noted that Southwest is talking to "several airlines about international codeshare partnerships" and hopes "to get one or two announced soon."
Kelly weighed in on several other topics.
Fares: "We have been pushing fares up this quarter gently ... If you move the top fares too far, people shop smarter and buy down."
Acquisitions: "Southwest is far from done in terms of developing our route system. My concern, like everyone else's, is adding a lot of capacity to Southwest Airlines. You gotta just tell me how the numbers work in 2009 and it makes Southwest airlines better. There's probably an argument that says, 'Hey man, five years from now, that investment is going to pay off.' Well, that is a lot of risk with $4 gas ... Right now, we are clearly not thinking about any kind of acquisition."
Federal Aviation Administration: "We have been working for years on the FAA reauthorization and it's not going anywhere apparently this year in terms of modernizing the air traffic control system and also they way it is financed. All that needs a lot of work."
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