Originally Posted by JS
If oil stays at $65/barrel, in a few years Southwest will be paying $65/barrel, which is more than double what they are paying now.
For 2006, SWA is facing a $ 400,000,000 plus extra fuel bill even taking into account their industry-leading hedging program. That equates to about 5 % of revenue. SWA has not experienced revenue increases of that magnitude, so it has to come from somewhere if they are to remain profitable.
I am convinced there is more to come. One possibility would be to put the extra rows of seats in the 700's which they intentionally did not do when the airplane was introduced. I can see the announcement now: "You wanted extra seats for award travel and we listened...."
And, be careful referring to LLC carriers, since LLC is the new stock symbol for America West/USAirways.