Southwest Airlines chairman and CEO Gary Kelly, speaking at the Raymond James airline conference in New York today, outlined an ambitious schedule for new technology projects, including satellite-based Wi-Fi, website upgrades, changes to the Rapid Rewards frequent flyer program, and a new revenue management system.
Kelly said Southwest's satellite-based broadband Wi-Fi system -- provided by Row 44 -- will be unlike any other carrier's installation because Southwest would control its marketing, packaging and pricing. He said the airline will be able to choose from a number of different entertainment options.
Alaska Airlines, too, is in the process of installing the Row 44 system.
Southwest plans to equip about 15 aircraft per month with Wi-Fi and expects to outfit the entire fleet by early 2012.
In contrast to Row 44's business model, with Aircell's Gogo Wi-Fi system, which is used by Air Canada, AirTran, American Airlines, Delta Air Lines, United Airlines, Virgin America and US Airways, Aircell retains control over marketing and pricing. Another difference between the competing systems is that Row 44 is satellite-based while Gogo uses a network of ground towers for transmission.
Turning to the airline's website, Southwest.com, Kelly said a recent redesign has led to improved look-to-book ratios and the booking of higher average fares.
Southwest plans new releases of the website quarterly in 2010, and the upgrades will turn into "tens of millions of dollars" in additional revenue from ancillary services, Kelly said.
Two other major technology projects in the works, Kelly said, are overhauling the Rapid Rewards program and implementing a new revenue-management system.
A modified frequent flyer program, expected to be in place by the end of 2010, would attact more users for the loyalty program and aims to increase members use of credit cards, Kelly said.
He called the remodeled Rapid Rewards program an "enormous revenue opportunity," adding the airline won't see the benefits until 2011.
Kelly said the airline's existing revenue-management system lacks some basic features, and the new one, slated for 2012 implementation, would provide "a very handsome opportunity," although changes in the Rapid Rewards program have more upside potential.