By Trebor Banstetter

Star-Telegram Staff Writer

Posted on Thu, Mar. 24, 2005

Southwest Airlines isn`t likely to jump on the latest travel trend -- selling food, entertainment and other amenities during flights.

Gary Kelly, chief executive of the Dallas-based airline, told Wall Street analysts Wednesday that charging customers for additional services like food doesn`t fit the carrier`s business model.

``What we`ve chosen not to do is feed our customers to death,`` Kelly said during a speech at a Goldman Sachs airline conference in New York. ``You won`t see a dramatic change at Southwest in terms of add-on fees, whether it`s fuel surcharges or selling meals on board or anything like that.``

Several major airlines, including Fort Worth-based American Airlines, have begun selling a variety of items, including meals, snacks and portable entertainment devices, during flights.

It`s generally seen as a way to raise money in an environment where the airlines are starved for more revenue.

But Southwest officials emphasized that their customers are used to a no-frills flight experience. The airline has famously eschewed in-flight meals for decades.

``What, are we going to charge people for the peanuts?`` joked Ed Stewart, a Southwest spokesman. ``That`s just not the way we do things around here.``

Southwest is the only major airline that has remained profitable since 2000. Last year, it reported a $313 million profit, while the six major hub carriers lost a combined $9.3 billion.

Still, Kelly said, Southwest, like its competitors, is challenged by high fuel prices and heavy competition.

``We are in a very, very difficult industry environment,`` he said.

One bright spot is the airline`s recent deal with ATA Airlines, an Indianapolis-based discount carrier that`s in bankruptcy. Late last year, Southwest invested $117 million in the airline, buying six of its gates at Chicago`s Midway Airport, taking an equity position and inking a schedule-sharing deal.

Kelly said Wednesday that Southwest is on track to reap $100 million in annual revenues from the deal.

``From any perspective, that is a tremendous investment,`` he said.

Southwest`s stock (ticker: LUV) closed Wednesday at $14.48 per share, up 36 cents.