Texas Business Report: Bumpy Skies for Southwest Airlines?

Southwest Airlines announced it will slash spending by at least $100 million after the airline's third-quarter numbers were lackluster.
Sat October 20, 2012 1:57 am
AP Images

The Texas economy is one of the most robust in the world. Wildly profitable companies and ingenious entrepreneurs call this state home, and what happens here influences businesses around the nation. Here’s a slice of the profits, losses, big deals, and backroom decisions happening across  Texas this week.

Tough Medicine to SWA-llow
Coming off a sluggish third quarter, Southwest Airlines announced this week that it plans to slash spending by at least $100 million , but the cuts will not involve layoffs, Bloomberg News reports. CEO Gary Kelly told employees on Thursday that the airline will be “trimming our total headcount” due to “high fuel prices and economic uncertainty.”

The Bottom Line : The Dallas-based airline has never laid off workers, but Kelly said the company will likely slow — but not freeze — hiring in the year ahead.

Texas Log-ins
The University of Texas is branching out into the digital education arena, announcing this week that it will partner with online course provider edX to develop at least four free online classes by the end of next year. The university will invest $5 million in edX, a nonprofit venture launched this year by Harvard University and MIT, and it will spend an additional $5 million to develop the programs. The goal of the partnership is to “better meet the learning needs of a wide range of students, raise graduation rates and cut the cost of higher education,” the Texas Tribune reports.

The Bottom Line : Some critics worry that providing free online courses could “dilute the UT brand,” but administrators say the programs will be held to high academic standards. UT also has less invested in the project than Harvard and MIT, which each contributed $30 million to get edX off the ground.

We Can Do IT
In other UT-related news, the university’s School of Information received a $1 million federal grant this week to “increase the involvement of women in information technology,” the Austin Business Journal reports. The funding from the National Science Foundation will be used to research new ways to improve recruitment and retention of female professionals in the computing workforce.

The Bottom Line : According to UT Professor Lecia Barker, who will oversee the grant-funded projects, women make up less than 25 percent of the computing industry, “and they leave it at twice the rate of their male peers.”

Think Before You Pink
In the midst of National Breast Cancer Awareness Month, breast cancer charities are working to ensure the integrity of marketing promotions that claim to support the cause. Dallas-based Susan G. Komen for the Cure and the Breast Cancer Research Foundation have adopted new “guidelines for fuller disclosure by those selling pink products and services in their names,” Bloomberg Businessweek reports.

The guidelines, drafted by the New York Attorney General’s Office, advise companies that participate in promotions benefiting breast cancer charities to be more transparent, directing them to “disclose the specific amount that will be donated from each purchase” and “state if a purchase triggers a donation or merely calls attention to the cause.”

The Bottom Line : The charities have a valid interest in clarifying their policies: A recent review of campaigns at more than 150 businesses identified several cases of misleading information about donation amounts, including one company that funneled more than half of donations to pay celebrities to appear in its ads.

Winner of the Week: Ocelots
Wild ocelots in south Texas have an unlikely friend in Los Angeles Dodgers pitcher Josh Beckett, who filed a federal lawsuit this week to stop work on a gas pipeline that runs through his ranch in Cotulla, which Beckett says is a habitat for the endangered wildcats. Beckett claims he first saw a “very stealthy cat with unusual markings” while bow hunting on the ranch several years ago and that other ocelots have appeared since then, according to the AP. The pipeline’s owners, Eagle Ford Midstream LP and its parent company, Houston-based NET Midstream, began clearing brush in an easement on the property earlier this month after the pitcher’s attorneys failed to convince a state court to put a stop to the project.

Loser of the Week: Pizza Hut
Following an outpouring of ridicule from the likes of Stephen Colbert , Plano-based Pizza Hut backed off a marketing stunt that encouraged customers to interfere with this week’s presidential debate. The promotion promised a lifetime of free pizza to anyone in the debate’s town hall audience who dared to ask President Barack Obama or Mitt Romney whether they prefer sausage or pepperoni , the Dallas Business Journal reports.

The company announced the reversal in a public statement: “We're no longer asking a few hundred attendees at the town hall presidential debate on Oct. 16 to pose the question, rather we're bringing the question — sausage or pepperoni?   — to millions of Americans.”

More Texas Monthly

Loading, please wait...

Most Read

  • Viewed
  • Past:
  • 1 week