DALLAS (CBS Local) — Southwest Airlines has begun raising domestic fares as it struggles to keep up with an unexpected jump in expenses.
The low-cost carrier began raising domestic fares $2 to $5 one-way last week, according to Bloomberg. By Monday, the airline had increased approximately 90,000 fares.READ MORE: 'Frightening Anti-Semitism': Jewish Community Focused On Security After Texas Synagogue Hostage Situation
Southwest is facing unexpected pressure from rising operating costs. The airline has been investing in technology upgrades, new planes and expanded airport facilities.
Last month, Southwest forecasted that costs for each seat flown a mile will increase by at least 3 percent in 2019, even after excluding fuel and other items. That’s up from the nearly 1 percent that analysts were expecting.READ MORE: Stoneham Police Officer Needs 30 Stitches To Face And Head After Being Attacked By Dog
“We’re not in a panic. We’re not in a crisis. Financially, we’ve never been stronger,” Chief Executive Officer Gary Kelly told Bloomberg.
Travel demand is booming for 2019 and that makes it easier for airlines to raise prices.
“The revenue outlook for 2019 is very good, and suggests that having a goal for operating margin expansion, if fuel is constant, is not unrealistic,” Kelly said at Southwest’s headquarters in Dallas.MORE NEWS: Eversource Prepares For 'Kitchen Sink' Storm Expected To Bring Snow, Rain And Wind To New England
While employee-related costs are the airline’s biggest expense, Southwest won’t offer an early retirement or buyout program to workers, Kelly said.