Southwest CEO: 'I'd rather have a customer than a bag fee'

Even as rising fuel prices hike operating expenses, Southwest Airlines Co. said Thursday that fourth-quarter earnings were up 13 percent and that bookings were strong through March.

"Except for fuel, we have a great outlook for 2011," Southwest chief executive Gary Kelly told investors during a conference call. "In particular, I believe business-travel demand will continue to strengthen."

The Dallas-based carrier's "Bags Fly Free" and "No Change Fees" advertising campaigns are expected to "continue to provide tremendous momentum," Kelly said.