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Southwest Airlines sees stronger passenger traffic this summer than predicted earlier this year, Gary Kelly, chief executive of the low-cost airline, said Wednesday.

However, he told analysts during a Webcast presentation from the New York Stock Exchange, the airline will trim capacity growth in the fourth quarter to 6% from its earlier forecast for 8% growth as well as plans to expand routes by 6% in 2008.

Kelly said the airline will trim some unprofitable flights, and add routes that are more profitable. “‘Our greatest opportunity lies with the business customer,'” Kelly said.

The Dallas airline, which last year overtook American Airlines, a unit of AMR Corp. (AMR), as the largest carrier of domestic air passengers, this year is facing rising costs for fuel and labor – the greatest expenses for all airlines – and stiffer competition.

source: CNN

Filed under Low cost, Southwest.