Sky Talk

Southwest CEO says he would love more gate capacity at Love Field

Southwest Airlines CEO Gary Kelly gives thumbs up to after closing the cabin door for flight 1013 to Denver, the first non-restricted flight out of Love Field, in Dallas, Monday, October 13, 2014.
Southwest Airlines CEO Gary Kelly gives thumbs up to after closing the cabin door for flight 1013 to Denver, the first non-restricted flight out of Love Field, in Dallas, Monday, October 13, 2014. Star-Telegram

Southwest Airlines executives talked to Wall Street analysts on Thursday, discussing their $1.1 billion record profits in 2014 and the continuing drop in fuel prices.

“Things are steady and we feel really good about the business,” Southwest chief executive Gary Kelly told analysts.

Here’s the highlights from the conference call:

-Although the airline took a $283 million charge for its fuel hedging contracts losing value in the fourth quarter as fuel prices dropped, Southwest chief financial officer Tammy Romo said it has reworked the contracts and will participate in 90 percent of the drop in fuel prices in the first quarter.

Kelly added that the airline is “essentially unhedged” for 2015 although it does have hedging contracts in place for 2016 and 2017.

“It’s anybody’s guess what will happen next so we will manage as best we can, factoring in that very high level of uncertainty in energy prices going forward,” Kelly said.

-Southwest currently has seven union contracts that are currently in negotiations, including contracts for its pilots, flight attendants and ground workers.

“It is my hope that we get all of those negotiated and ratified in 2015,” Kelly said. Last year, the carrier successfully negotiated three new labor contracts.

-Don’t look for Southwest to add any more flights to its Dallas Love Field operations as the carrier is operating close to capacity.

“We’re at the point where we need more than 16 gates. So we do have a use agreement with United that allows us access to a 17th gate to support this level of flight activity,” Kelly said. “Hopefully we can add some more flights, but I’m not willing to commit to that yet. The operation we’re happy with. We’re real busy. Load factors are where we need them to be but we’d love to have more capacity.”

-Kelly was asked if Southwest was interested in possible commercial flights to Cuba if the governments reach an arrangement to allow regularly scheduled service between the island nation and the U.S. “Yes,” he said, but added that it was one of 50 possible destinations the airline may add to its network in the future.

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