Southwest seeks to trim costs

WASHINGTON (Reuters) - Southwest Airlines Co. (LUV.N: Quote, Profile, Research, Stock Buzz), the leading U.S. discount carrier, is seeking to cut costs in order to keep ahead of traditional airlines as its fuel hedges unwind, its chief financial officer said on Wednesday

"We're very focused on retaining our (cost) advantage," said Southwest CFO Laura Wright told Reuters Aerospace and Defense Summit in Washington. "There's not anything we're not looking at and not touching."

Southwest has the lowest operating costs in the U.S. airline industry, with its no-frills flights, efficient work force, and long-term hedges of its jet fuel needs. But these hedges will start to erode over the next two years, exposing the largest U.S. airline in terms of market capitalization to higher fuel prices.

Wright said Southwest has "hundreds" of initiatives running aimed at trimming costs or improving performance. These projects aim to cut costs in small steps such as streamlining maintenance procedures, reducing fuel burn at the gates, or encouraging consumers to book tickets at its Web site.

Altogether, these efforts have generated over $100 million in savings this year, helping Southwest maintain a 30 percent cost advantage over traditional carriers, she said.