Southwest Airlines expects tough year

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(Second in a series of Executive Outlooks)

Southwest Airlines is widely touted as the best run company in an industry that is suffering the effects of both the Sept. 11 attacks and management missteps at some carriers.

Richard Sweet, Southwest Airlines exec director-sales and marketing, says in the second in a series of Executive Outlooks that 2003 will be another tough year for the troubled aviation industry.

BtoB: How do you expect the economy to affect your business in 2003?

Sweet: Well, unfortunately, we're anticipating another tough year. If fact, from a budgeting standpoint, we're budgeting ourselves pretty much flat year over year.

[2002] was a very tough environment, even for a cost-conscious company like us. We're anticipating it being a relatively lean and tough year. But we're going to continue to grow. We're continuing to take on 17 new airplanes [in 2003]. There will be six retirements [of airplanes]. So we're continuing in a growth mode. It's a little bit less than we normally do.

We also will be adding service to existing cities.

We don't plan on opening any new cities. We try to grow the market rather than to steal market share.

BtoB: How do you expect the economy to affect your marketing and advertising in 2003?

Sweet: In the broadest sense [of marketing], we're going to continue to stimulate the business traveler. We've got the $299 cap out there for all of our flights, including walk-up traffic.

From a micro standpoint, we're going to focus on our meeting and convention product. We've taken that product and made it ticketless. And we'll be doing a bit more trade advertising and give it more support from a field sales standpoint.

We offer, like most airlines, discounts for meetings and conventions, and it's based on 25 people or more going to the convention. In the past that had been a product we could only handle with paper tickets.

We'll also be promoting, our online booking tool.

BtoB: Do you plan to target United or US Airways with any marketing programs?

Sweet: No, our advertising won't be affected. There may be pockets of opportunities that will be evaluated as they come up, but generally we don't have knee-jerk reactions.

BtoB: What is the most important element of your marketing program?

Sweet: That's a tough one, because they're all important in their own sense. But I think because we anticipate that demand is just not going to come back to the level it was before that our advertising in broadcast media, in addition to our loyalty Rapid Rewards program, is the most important. That's because it's the broadest.

--Interview conducted by Sean Callahan

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