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Southwest Could Add Cities, Longer Flights In Response To United

July 5, 1994

DALLAS (AP) _ Facing a West Coast challenge this fall by a low-cost United Airlines subsidiary, Southwest Airlines Co. said Tuesday it is prepared to make longer flights and start serving new short-haul markets in California.

Officials with Dallas-based Southwest, which has grown into the nation’s only consistently profitable airline by offering low-fare, short-haul service, said they initially will see what UAL Corp.’s U2 does when it starts service, scheduled for Oct. 1.

″If indeed they are as aggressive as their rhetoric has been, then they are indeed going to see an aggressive response,″ chief financial officer Gary Kelly said.

Southwest particularly wants to protect its dominance in California.

Late Tuesday, Boeing Co. said Southwest had ordered four more 737-300s for delivery next year.

Southwest spokeswoman Ginger Hardage said the company had moved up two of its 1995 deliveries to this November. The airline now plans a total of 19 more planes this year, 22 bought and leased in 1995 and 18 in 1996, she said.

Southwest chairman Herbert Kelleher told The Wall Street Journal in Tuesday’s editions that Southwest could go into new markets now served by United, both short- and long-haul.

He stressed that long-haul service is not new for Southwest, which make up to 20 percent of the carrier’s system, he said.

Some analysts downplayed Southwest’s saber-rattling Tuesday, saying the carrier was lengthening its flights anyway as its system grew.

″What Southwest’s statements reflect is some excellent poker-playing with regard to United. I think it’s designed to make United stop and think twice about where and how big U2 is going to be,″ Salomon Brothers analyst Julius Maldutis said.

″Southwest Airlines has a winning formula and no one - but no one - to date has either been able to duplicate it or to challenge it. That’s the key element.″

United Airlines spokesman Joe Hopkins said the carrier has not threatened to attack Southwest.

United has merely cited Southwest as ″an example of a successful carrier with a low cost structure,″ he said. He declined to comment on the prospect of Southwest taking on United’s long-haul service.

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