Southwest Airlines 1998 Annual Report Download - page 9

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9
SOUTHWEST AIRLINES CO. ¤ SIX STORIES OF FREEDOM
“We give our People the freedom to keep fares low
in every city we serve. These are not merely introductory
fares, they are our everyday low fares — and they are low by
philosophy, not expediency.”
— Gary C. Kelly, Vice President — Finance & CFO
Low fares, every seat, every day. That’s what makes Southwest so different. And
that’s what Customers want: low fares so they have the freedom to fly. Low fares are
even more important in our shorthaul market niche, as Customers have ground
transportation as a viable alternative. Therefore, we have to charge low fares to
succeed, regardless of what our airline competitors charge.
We are the low-fare police in the U.S. airline industry, THE Low-Fare Airline.
Customers think of Southwest when they think of low fares. In a July 1997 Consumer
Reports survey, Southwest was ranked as having the lowest fares of the nine major
airlines rated. We are committed to maintaining that reputation.
Well over 100 communities requested service from Southwest last year because of
our low-fare reputation and the knowledge of what low fares and high quality service
can produce. When Southwest Airlines enters a market and slashes fares, the number
of travelers increases significantly, often three- and four-fold. The U.S. Department of
Transportation refers to this surge in air traffic and its favorable economic impact as the
“Southwest Effect.” This is especially true in shorthaul markets where people were
forced to travel by automobile or other modes of ground transportation because air
travel was simply not affordable prior to Southwest service.
Since we charge low fares every day, we tend to dominate the markets we serve with
frequent flights. We consistently rank first in market share in 80 to 85 percent of our top
city pairs and, in the aggregate, generate a 60 to 65 percent share in the top 100 city-
pair markets served by Southwest. We rank first or second in Customer boardings at
the majority of our 53 airports served. Overall, we are now the fourth largest airline in
the U.S. in terms of passengers boarded.