Southwest to ponder international expansion

The chief executive Southwest Airlines, the United States' largest domestic low-cost carrier, said the company might consider an international expansion in the future.

Gary Kelly, who is also president and chairman of the company, made the comment in front of some 6,000 delegates at the National Business Travel Association convention in Houston.

The boss of the Dallas-based airline was speaking on a CEO panel discussing the economic outlook for the corporate travel sector.

He said expansion plans, domestic and international, were not on the short-term agenda, but said the time may come where Southwest extends its network outside of the US.

Speaking about the economic recovery, Kelly said he had noticed an improvement, but insisted business must continue to remain cautious.

"It's a heck of a lot better than it was a year ago," he said. "But there is uncertainty of a number of fronts which mean we should be cautious."

Kelly said between 35 and 40% of Southwest's passengers were business travellers, and that the number was steadily increasing.

However, he said the backbone of the company's success had been the return of the leisure traveller over the last 12 months.

The airline recently launched a Miami - Panama City Beach service, "an instant success", according to Kelly.

And plans to start flights next year from South Carolina to Charleston and Greenville-Spartanburg remain in place, though Kelly said the will be no expansion of the fleet.

And he said opportunities might exist where United and Continental reduce frequencies following their merger.

But he said the biggest risk facing the industry was that of energy prices, and the possibility of oil returning to more than $100 a barrel.

"Energy has been a game-changer for the airline sector in the last five years. The volatility is unprecedented. At $147 a barrel in 2008 no airline made money on any ticket."

Kelly added that the BP oil spill in the Gulf of Mexico had not helped the situation.