Southwest caps growth and looks to increase return on invested capital to stop investor flight

admin
By admin June 3, 2015 21:22

Southwest caps growth and looks to increase return on invested capital to stop investor flight

Southwest Airlines confirmed it will cap capacity growth in 2015 to 7%, 2% more than the original plan and 1% less than the revision that sent U.S. carriers’ shares plunging after American Airlines said it would compete last month. “We don’t want to grow 8%, we’re not going to grow 8% and we can easily trim the schedule to stick to 7%” expansion of available seat miles, Chief Executive Officer Gary Kelly confirmed this week. Southwest is also looking to increase its target for return on invested capital. “The historic pretax goal of 15% a year is too low,” he stated. But as Kelly looks to announce a new target as soon as July 2015, it should be remembered that pretax ROI was 21% in 2014, so that might be just the starting point going forward.

admin
By admin June 3, 2015 21:22