Business Travel Drops Sharply Over 2007 Figures

Southwest Airlines presented something of a good news, bad news report Tuesday. The Dallas-based low-cost carrier reported it flew 5.1 billion revenue passenger miles (RPMs) in February 2009, a 6.0 percent decrease from the 5.4 billion RPMs flown in February 2008.

The good news from that dreary figure comes in the fact that drop nearly matched the 6.5 percent decrease in available seat miles over the same period. In other words, capacity cuts implemented by Southwest over the past year seem to have tracked passenger demand fairly well.

The airline's load factor for the month was 69.1 percent of seats filled, compared to 68.6 percent for the same period last year... another indicator capacity cuts are tracking along with passenger numbers. However, Southwest warned even more capacity cuts may be coming.

Of particular concern to Southwest is that its full-fare traffic has continued to drop, an indicator the airline isn't attracting business fliers despite recent moves intended to appeal to last-minute fliers on the company dime.

"Revenues softened in February compared to January, bringing the year-over-year increase in passenger unit revenues to the two percent range for the first two months of 2009," the airline stated. "Business travel, in particular, has softened significantly, as measured by a decline in the percentage of full-fare traffic.

"As a consequence of the continued deterioration in revenue and booking trends and the current economic environment, the Company's revenue outlook for the remainder of the year is more cautious."

FMI: www.southwest.com