Southwest Airlines Co. (LUV) may delay any expansion to as late as 2014 as $100-a-barrel oil erodes profit growth, Chief Executive OfficerGary Kelly said. The shares rose the most in four weeks.
Flights and seating capacity at the biggest discount carrier will be unchanged this year, and “we haven’t made a final decision about 2013 yet,” Kelly said today in an interview. “I don’t sense we’re going to see a significant increase in capacity in 2013, if we have any at all.”
Analysts track airlines’ capacity because a tighter supply of seats improves carriers’ ability to increase prices. With Southwest paying an average of 35 percent more for each gallon of jet fuel in 2011, the Dallas-based airline is under pressure to curb a history of expanding faster than its peers.
Full story: Southwest May Delay Flying Growth to 2014 – Bloomberg.