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Southwest's expansion sights rising even higher for Denver

Chris Walsh, Rocky Mountain News

Published March 24, 2007 at midnight

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Southwest Airlines will continue to expand in Denver this year as the carrier adds new aircraft to its fleet.

"We feel we need a lot of nonstop destinations here to really build the market," Gary Kelly, Southwest's chief executive officer, said Friday at the Grand Hyatt in downtown Denver after speaking to a gathering of business executives. "We've got a few things up our sleeve coming up that we haven't yet announced this year."

Kelly didn't offer specifics but said the company, which is bringing on more than two dozen additional planes in 2007, sees numerous opportunities in Denver.

Southwest has grown quickly since starting service at Denver International Airport early last year with 13 daily nonstop flights to three cities. By late June, it will fly 41 nonstops to 11 destinations. This year it already has announced new service to Tampa, Fla., and Oakland, Calif., as well as some additional daily flights to markets it currently serves.

The Dallas-based carrier, which leases five gates at DIA, has some room to grow. Southwest typically flies 10 daily departures from each gate, giving it room for nine more flights in Denver.

It has expressed interest in leasing some of the eight new gates DIA is building on the C concourse, although it has yet to ink an agreement for any of them.

Kelly spoke Friday to more than 200 people gathered at a meeting hosted by the Chief Executive Network, a membership group for executives.

He said the carrier will look for new ways to boost revenue and enhance customer service as it broadens its business model to confront new challenges.

"This is a very significant time for us," Kelly said. "What we're trying to do is ensure that we improve our ability to compete going forward. We have to have an advantage over our competitors."

In addition to high fuel costs and other industry challenges, Southwest faces new competitors mimicking its low-cost business model. Going forward, Southwest's challenge is to find new ways to set itself apart while keeping its strengths - low fares, low costs, corporate culture - intact.

"We can't just compete on fares," Kelly said. "What's really different for us going forward is that we're looking more aggressively to enhance the customer experience."

That could include bolstering its frequent flier program and adding international flights in coming years. Southwest hopes those moves and others - such as possibly expanding its cargo operations - will help boost revenue.

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