Southwest Airlines CEO: 'Never Say Never' on Baggage Fees


Take a look at the arrivals or departures screens at the Boise Airport and you'll note that hundreds of Idahoans hop on a Southwest Airlines flight each day. So more than a few travelers may want to take note that the CEO of Southwest—who has long held onto a policy of not charging baggage fees—told CNBC Thursday "never say never."

"There are no plans to charge for bags in 2013," Gary Kelly said on CNBC's Squawk Box, but added, "Never say never. ... The customers will tell us whether they would prefer to have extra fees or whether they would prefer to have everything bundled."

Kelly added that the industry is facing pressure because of higher fuel costs, which weighed on fourth-quarter profits. Southwest earned 9 cents per share, excluding one-time items, a penny higher than estimates. Revenue of $4.2 billion was just shy of expectations. The company also saw higher operating expenses and a decline in passenger traffic.

Kelly said that the industry landscape "is changing and that's a challenge."

"Over the last 10 years … you do have low-cost carriers entering the market," he said. "Every single legacy carrier has gone through bankruptcy, gotten their costs down significantly," he said.