Southwest Fights ‘Cost Enemy’ After AMR Bankruptcy Filing

Southwest Airlines Co., the biggest fare discounter, said it faces more pressure to trim labor and operating costs since American Airlines joined other larger rivals in using bankruptcy to pare spending.

Southwest’s cost advantage over so-called legacy carriers such as American and Delta Air Lines Inc. has fallen by half and its fares have moved closer to competitors’, Chief Executive Officer Gary Kelly told employees in a memo yesterday. As a result, Dallas-based Southwest faces a more serious threat from now-profitable peers, he said.