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Southwest CEO sees no return of road warriors

The CEO of Southwest Airlines says business travel is still slow and he doesn't expect it to improve next year either.
/ Source: The Associated Press

The CEO of Southwest Airlines says business travel is still slow and he doesn't expect it to improve next year either.

"I'm not expecting strong economic growth in 2010, and likewise I'm not expecting a rebound in business travel in 2010," says Gary Kelly.

Business travelers are a key source of revenue for airlines because they fly regularly and often pay higher, last-minute fares.

With corporations still pinching their travel pennies, Southwest is adjusting its plans.

Kelly says Southwest doesn't expect to increase its 541-plane fleet next year, and that passenger-carrying capacity will be flat.

At an investor conference in New York, Kelly predicts Southwest will be profitable in the fourth quarter after excluding one-time items.

Good news for American
A top American Airlines executive says the carrier is seeing a pickup in both leisure and premium travel, at least on international routes.

Beverly Goulet, treasurer of American parent AMR Corp., says advance bookings through February are flat with a year ago. She says international bookings are up nearly 3 percent but bookings in the United States are weaker.

American and other airlines have been raising fares, including surcharges for peak travel days, and other fees. Goulet told an investor conference in New York that the strategy seems to be working.

"We are modestly encouraged by the revenue trends we're seeing," she said.