Southwest Airlines increased its quarterly dividend by 50 percent to 6 cents per share at its annual shareholder meeting held in Dallas on Wednesday.

The company also authorized a new share repurchase program of $1 billion. Under the airline’s previous share repurchase program it has bought back $1.7 billion of shares since August 2011.

Chief executive Gary Kelly said it has reduced outstanding shares by 15 percent.

“Our balance sheet is very strong and our liquidity is very strong,” Kelly told shareholders at the Crescent Hotel in Dallas.

The company’s shares (ticker: LUV) were down 8 cents at midday, mirroring a decline in stocks overall.

In reviewing the operations of the carrier over the past decade, Kelly told shareholders that because of higher fuel costs, Southwest has transformed itself from a short-haul carrier that served only 58 destinations in 2001 to a more versatile airline serving 96 cities.

“Higher fares means fewer people fly. High fuel costs mean higher fares. Short-haul markets have been especially impacted over the past 12 years,” Kelly said.

With the integration of AirTran Airways, which it bought in 2011, expected to be completed by the end of the year, Kelly said the Dallas-based carrier continues to have opportunities to grow particularly in the near-international market like Canada, Mexico and Central America.

“We have more opportunities than we have airplanes over the next four or five years,” Kelly said.

Andrea Ahles, 817-390-7631 Twitter: @Sky_Talk ___

Photo Credit: Southwest Airlines CEO Gary Kelly gestures as he briefs reporters on his low cost airline's plans for the future, including dealing with higher fuel costs, destination expansions and customer service, at the Reuters Aerospace and Defense Summit, in Washington, December 5, 2007. Mike Theiler / Reuters