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Kelly said, "Even Tiger Woods doesn't win every tournament. We'll be back in the game for the next tournament. It's a matter of being opportunistic. Any time you've got a competitor failing in bankruptcy, that presents an opportunity. Absent bankruptcy, I think it's pretty difficult to make airline mergers work for a variety of reasons."

He also said in the interview that his outlook for industry revenues is still pessimistic in the near term, however, Southwest likely has a chance that it can grow revenues in 2010 if things are assumed not to get worse in the economy.

Republic Airways Holdings, Inc (RJET) shocked the LUV and the airline industry by beating out the much larger peer for the ailing Colorado-based Frontier Airlines. As the larger airlines continue to struggle, some of the more aggressive commuter airline companies are making moves to capitalize. The larger airlines have seen earnings reports that show signs of weakness which the smaller airlines like Republic and AirTran Holdings, Inc (AAI) hope to exploit.

AMR Corp. (AMR), the parent company of American Airlines, Inc., last month reported a narrower loss for the second quarter, helped by lower one-time charges from the year-ago period. Revenues were down year-over-year, reflecting the impact of reduced capacity and lower demand amid global economic downturn. Going forward, the company expects capacity reductions in the third quarter and fiscal 2009.

Houston, Texas-based Continental Airlines, Inc. (CAL) reported a wider net loss for the second quarter, hurt by declines in high yield traffic and the H1N1 virus infection that led to lower revenues. Net loss was $213 million or $1.72 per share, significantly wider than $5 million or $0.05 per share last year. Quarterly operating revenues dropped 22.7% to $3.13 billion from last year's $4.04 billion. The company also announced various measures to increase revenue and reduce costs, which include the elimination of 1,700 jobs.

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Most in the market expected Southwest Airlines Co. (LUV) to add Frontier to its portfolio, but the Indianapolis-based Republic snuck in and stole the prize. The company had recently acquired Midwest Air Group. 

The larger airlines have seen earnings reports that show signs of weakness which the smaller airlines like Republic and AirTran Holdings, Inc (AAI) hope to exploit.

AMR Corp. (AMR), the parent company of American Airlines, Inc., last month reported a narrower loss for the second quarter, helped by lower one-time charges from the year-ago period. Revenues were down year-over-year, reflecting the impact of reduced capacity and lower demand amid global economic downturn. Going forward, the company expects capacity reductions in the third quarter and fiscal 2009.

Houston, Texas-based Continental Airlines, Inc. (CAL) reported a wider net loss for the second quarter, hurt by declines in high yield traffic and the H1N1 virus infection that led to lower revenues. Net loss was $213 million or $1.72 per share, significantly wider than $5 million or $0.05 per share last year. Quarterly operating revenues dropped 22.7% to $3.13 billion from last year's $4.04 billion. The company also announced various measures to increase revenue and reduce costs, which include the elimination of 1,700 jobs.

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