Southwest Airlines would use tax savings on planes, share buybacks

FILE PHOTO: Southwest Airlines Chairman of the Board, President & Chief Executive Officer Gary C. Kelly answers a question at the Society of American Business Editors and Writers conference held on the campus of Southern Methodist University in Dallas, Texas April 8, 2011. REUTERS/Mike Stone

NEW YORK (Reuters) - Southwest Airlines Co LUV.N would use savings from a potential cut to the U.S. corporate tax rate to buy new planes and fund share buybacks, Chief Executive Gary Kelly said on Thursday.

Republicans in the U.S. Congress reached a deal this week on a final version of their debt-financed legislation to cut taxes for businesses and wealthy Americans, with House and Senate votes expected early next week.

“We’re trying to grow and at the same time keep our costs low and manage the risks of growth, and this is very welcomed,” Kelly said.

“We’ll have more money to invest in airplanes, add jobs, share with our current employees and also take good care of our shareholders as well,” he added.

Kelly said that savings would also help Southwest, which built its reputation as a low-cost airline, keep it’s fares low.

The tax bill, if passed, would cut the corporate tax rate to 21 percent from 35 percent. The bill hit potential obstacles on Thursday as two more Republican senators joined a list of lawmakers whose support is uncertain.

Kelly said that even if a windfall did not translate into more Southwest jobs “it’d be more jobs with Boeing to build more airplanes”.

Southwest’s entire fleet is comprised of Boeing 737 jets.

Rival Delta Air LinesDAL.N has also said that the carrier would use a windfall to buy equipment, but Chief Executive Ed Bastian said the money would not go back to investors in the form of share repurchases.

Reporting by Alana Wise; Editing by Susan Thomas