Cheaper Fuel Won’t Change Southwest Airlines’ 2019 Game Plan

January 7, 2019

Skift News reports, Southwest Airlines, which clipped its growth plans slightly as oil prices rose earlier this year, will stick to its capacity plans for 2019, even though fuel costs have fallen this month to their lowest levels in months, Gary Kelly, the airline’s CEO, said Friday in an interview.

“No, not at all,” he said in in Los Angeles, where Southwest unveiled a multi-year $500 million renovation of its Terminal 1 at LAX. “We are prepared for $100 a barrel oil, but we will certainly be a lot more prosperous at $50.”

According to Skift News, even for the most sophisticated of prognosticators, oil prices are notoriously difficult to predict. Less than two months ago, airlines were alarmed at fuel prices that had risen roughly 40 percent in less than a year. Many trimmed capacity plans and raised fares, while increasing fees on checked luggage. Southwest still does not have bag fees — a competitive advantage, its executives say — but it has been active in increasing prices, according to Wall Street analysts who track fares. It has also tweaked some of its fees for priority boarding.

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