Southwest Airlines CEO Thinks Its Passenger Experience Is Just Fine

The vast majority of airline CEOs would tell you that they need to focus on improving the passenger experience, but not Gary Kelly, the chairman, president and CEO at contrarian Southwest Airlines.

You know, it's the airline with 41 consecutive years of profitability despite recessions and the September 11 terrorist attacks, for example.

Asked yesterday during the airline's third quarter earnings call whether he anticipates Southwest making big changes to the passenger experience, such as perhaps adding a premium economy section, Kelly said he's "real happy with the product we have now."

While Kelly said new technology tools in the works, such as its improved reservations system, would "significantly update capabilities to pursue our commercial goals," for 2016 Southwest intends to focus on the basics, such as the reliability of the operation and the "hospitality" of the carrier's customer-service personnel.

Southwest can achieve these goals in the short term even without the upgraded technology, Kelly said.

He added that Southwest has no plans for making "material changes" in 2016 to the passenger experience.

In the J.D. Power 2015 North America Airline Satisfaction Study, Southwest ranked second to JetBlue among low-cost carriers.

Kelly's remarks came as a stark contrast to the discussion at United Airlines, which likewise reported third quarter earnings October 22.

Ancillary Revenue

In other news, Southwest officials that ancillary revenue in the third quarter offset its loss of merger partner Airtran's fee revenue. Southwest, for example, took in $16 million in the third quarter for no-show fees. Its "other revenue" category climbed 102.1 percent year-over-year in the third quarter to $386 million, but this was mostly due to a $130 million benefit tied to an amended credit card agreement with Chase and a related accounting change.