Sluggish US economy slowing travel demand?
That question was raised by the CEO of Southwest Airlines Co. His answer: maybe.
The chief executive of Southwest Airlines Co., Gary Kelly, said there is “growing evidence” that a slowing U.S. economy is dampening travel demand, which will make it tough for the discount carrier to achieve its earnings target for the year.
Mr Kelly said the airlines’ long-standing 15% earnings-growth target may not be met this year if the market continues to be slow.
He made his comments at the Bear Stearns Global Transportation Conference, according to wire service reports.
Southwest and other major carriers in recent weeks reported that first-quarter financial results pointed to a weakening environment for passenger revenue in the US, said AP.
Still, executives at some competitors, including Delta Air Lines Inc. and Houston-based Continental Airlines Inc., said at the conference that passenger demand remained strong. They said airlines that have cut domestic capacity this year have been better able to match demand with supply than carriers that continue to grow.
Southwest continues to see opportunities for US expansion, with new aircraft on order, said Mr Kelly.
Report by David Wilkening
David
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