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SOUTHWEST CHIEF DEFENDS FARE RISE

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SOUTHWEST CHIEF DEFENDS FARE RISE

Gary Kelly, chairman and chief executive of Southwest Airlines has stated that passenger demand has not been diminishing following successive fare increases brought in to combat higher jet-fuel costs. As a result, he said, the airline does not plan to cut capacity at this point.

Kelly said to US media that the airline can cope with jet fuel at its existing level of $3 a gallon but it would be a concern if it reached $3.30.

However, he also still expects Southwest to produce positive cash flow this year, and plans to use cash and profits for 2011 to fund aircraft orders. Kelly is reportedly unhappy with Boeing’s hesitation to launch a successor to the 737NG.