Dow Jones Business News Southwest Air Financial Chief: Sep Bookings 'Decent' Friday September 19, 2:10 pm ET By Elizabeth Souder, Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Southwest Airlines Co. (NYSE:LUV - News) Chief Financial Officer Gary Kelly said the low-cost airline has seen "pretty decent" bookings in September, but no material improvement in the percentage of business fares it sells compared with discounted rates. In an interview with Dow Jones Newswires on Friday, Kelly said boosting airline revenue requires a rise in business flying, which depends on job growth in the U.S. And currently, payrolls continue to decline. "September's not a great month. We didn't expect it to be. But the traffic and the bookings have been pretty decent so far. There's no sign of things falling apart, but there's no way to know how things will be next year." Still, Kelly said, the airline's mix of full-fare sales continues to improve compared with discounted fares, though the percentage of full-fare sales remains around 35%. And he's confident next year will be better for the Dallas airline than this one. The airline plans to take delivery of new planes next year in order to return to its traditional 10% growth rate by 2005. Kelly said Southwest will probably add another city to its route system in 2004. "We'll add at least one city next year. It's possible we could do more than that," said Kelly. Southwest currently operates at 59 airports. "We're looking for two basic attributes. We're looking for a market that is overpriced, and one that is under-served," said Kelly, who has worked for Southwest since 1986. He said the airline is also considering beefing up its schedule for St. Louis after AMR Corp.'s American Airlines drops the city from hub status. Trouble is, American's pullout means other airlines that operate at the airport will have to shoulder a larger portion of the airport's costs. "The big question at this point is the cost burden of operating at that airport. We are anticipating it will go up - the airport has as much as told us that," Kelly said. Kelly also said Southwest executives will revisit the idea of adding a smaller airplane to the airline's fleet, currently comprised solely of Boeing 737s, in order to serve smaller markets. But he doubts they will add another model. Part of Southwest's low-cost model is to operate only one kind of airplane, which keeps training and maintenance costs low. He said Southwest will consider a smaller plane, such as Empresa Brasileira de Aeronautica's Embraer 190 jet, to serve smaller markets. The 737 is meant for medium- to large markets. "It begs the question of do we want a smaller aircraft, and I think that answer is no, we don't," Kelly said. As for Southwest's contract talks with flight attendants, Kelly said negotiations are no more heated than talks with other unions in the past. Negotiations with flight attendants have been going on for 16 months, and have been turned over for federal mediation. Southwest negotiations with flight attendants have never gone to federal mediation before, though talks with other unions have been mediated in the past. Some Southwest flight attendants have picketed, complaining they are required to clean planes and perform other tasks without compensation because Southwest only pays them for hours worked in the air. Kelly said a small number of employees have been involved in the public demonstrations by the union representing flight attendants. "Union negotiations are always vigorous and it would be wrong to extrapolate those kinds of debates that are taking place to something bad that is happening among the entire company," Kelly said. -By Elizabeth Souder, Dow Jones Newswires; 201-938-4148; elizabeth.souder@xxxxxxxxxxxx