Southwest Throws Down The Gauntlet

Who's nervous now? With United Airlines set to launch short-haul service on the West Coast if its employee buyout goes through, Southwest Airlines vows to fight back--by going after some of United's long-haul business. Analysts doubt that cautious Southwest CEO Herb Kelleher will abandon his primary focus on shorter routes. Still, even rivals say Kelleher isn't just blowing smoke. Already, about 6.5% of Southwest's flights are longer than two hours. And with the delivery of new Boeing 737-X aircraft set for 1997, Southwest could offer transcontinental flights. Consultant Michael Boyd of Aviation Systems Research, for one, believes United, saddled with higher costs, is likely to lose any head-to-head battle with Southwest.

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