Southwest Air plunges most in two years


Southwest Airlines Co. tumbled the most in two years as Wall Street worried that expenses are getting out of hand. Investments in new technology and airport facilities haven’t paid off as much as expected, said Chief Executive Officer Gary Kelly. Costs for each seat flown a mile, a key measure of efficiency, will climb at least 3 percent in 2019 even after excluding fuel and certain other items. That outstripped analysts’ expectations.
“We’re not seeing the kind of efficiences here that I was counting on,” Kelly said on an earnings call. “We’re just going to have to work much harder to do that.” The outlook suggests a challenging year for Southwest, in contrast to the improving fortunes at rivals such as Delta Air Lines Inc. and United Continental Holdings Inc. Southwest is considering how to get more revenue from a new $500 million technology upgrade that’s given the carrier more flexibility to raise fares and fees.

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