In December, Southwest Airlines will begin selling domestic
tickets on its new Amadeus-based reservation system for May 2017 travel and
beyond, Southwest executives said in an earnings call. May is when operations
will transfer to the new system.
The switch to the new system will be mostly invisible to
travelers, president and CEO Gary Kelly said. The carrier is bulking up call
center staffing as it trains them on the new system, but because Southwest
already uses the system for international flights, many employees already are
familiar with it. "It's behind Southwest.com, where we'll have a new
reservation system engine," Kelly said. "[Customers] won't know that
they are making a booking in a new system."
The new system has enhanced capabilities to sell ancillary
services. Growing ancillary revenue is "definitely an objective" for
Southwest, likely to show in 2018, Kelly said. He declined to elaborate on those
services, except to say, "I'm not talking about charging for bags. I'm not
talking about change fees. But we do have opportunities to invest in tools and
techniques and beef up our resources to pursue some opportunities."
During the third quarter of this year, Southwest's total
operating revenue declined 3.4 percent year over year to $5.1 billion. Though
there was "record third-quarter traffic"—up 4.1 percent year over
year—revenue declined because it came at lower yields, Southwest executive vice
president and CFO Tammy Romo said. Southwest's average fare declined 4.8
percent year over year to $146.96. "The domestic industry is growing seat
miles well ahead of GDP growth, and we've seen significant competitive capacity
additions in markets we serve," Kelly said. "Increased competition
dilutes revenue."
Southwest
increased capacity 4.2 percent in the quarter, and its load factor declined 0.1
percentage points to 85.3 percent. While it plans to grow capacity 5 to 6
percent this year, it will slow capacity growth next year to about 3.5 percent,
about 40 percent of which will be international growth, Kelly said. The carrier
reported a net income of $388 million for the quarter, down from $584 million
in the third quarter of 2015.