Southwest Airlines Annual Shareholders Meeting Highlights

We had a chance to sit in on Southwest Airlines’ Annual Shareholders Meeting this morning. Chairman of the Board, President, and Chief Executive Officer Gary Kelly spoke, reviewing Southwest’s recent past, present, and future. Here are three of the major takeaways from the meeting:

1. 2009 was a Disaster for Most, but Not for Southwest Airlines

As Kelly stated, “2009 was profitable: (Southwest’s) 37th consecutive year of profits.” Also, 2009 “preserved” the carrier’s “unblemished record of no layoffs or furloughs.”

2. “Bags Fly Free” has Been a Success

There’s a strong belief that Southwest Airlines’ “Bags Fly Free” program played a major part in the carrier’s profitability in 2009 (this wasn’t a guarantee a year ago). Perhaps even more importantly, Kelly believes the carrier’s decision not to charge travelers for their first two checked bags “reaffirmed (Southwest’s) brand promise to (their) customers.” Kelly also went on to say that the “Bags Fly Free” campaign has allowed Southwest to “cut through the white noise” and be heard by consumers.

3. Growth is Still the Plan For the Future

Success in new cities such as Denver serves as encouragement for future growth. This weekend, Southwest Airlines kicks off new service to Panama City Beach, and plans to move into South Carolina (Charleston and Greenville-Spartanburg) are in place for 2011. Along with new cities and hopes to expand service in current locations (LGA for one), Kelley also stated “one of these days we’ll be flying cross-border, as well.” However, he was quick to point out that Southwest is not currently operationally prepared to fly internationally, and that it is not on the top of their “To-Do List.” Kelly said that Southwest will continue to evolve its technology, so that international travel becomes a “tactical” decision, and not an operational one. For what it’s worth, his “best guess” was “within five years.”

Along with these highlights, it was made clear that Southwest still puts a high premium on its people. Kelley referred to Southwest’s employees as “warriors” and “our heart and soul.”

Now, for a less serious take on Southwest’s current state, check out the “Bags Fly Free” guys getting Southwest execs in on all the shirt-raising fun:


Published: May 19, 2010