Southwest to buy more shares; details new Houston flights

HOUSTON (AP) — Southwest Airlines Co. is raising its dividend, buying back more of its own stock, and announcing new international flights from Houston.

At its annual meeting Wednesday, Southwest announced a new $1.5 billion share-buyback program and an increase in the quarterly dividend to 7.5 cents per share from 6 cents per share.

Southwest expects to add new and used planes this year and grow its fleet to about 700 by year end, up from 679 on March 31. Analysts expressed concern about the rapid pace of growth, which they fear could drive down average fares.

Some of the airline’s ground workers picketed outside the meeting in Houston to protest the lack of a new contract despite four years of negotiations. The pilots’ union said Tuesday that it is starting to prepare for a potential strike if it can’t get a deal in the next several months.

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Unions say they should share in the success of a company that earned a record $1.14 billion last year. Shareholders prospered — the value of their stock jumped 125 percent in 2014. Last month, Southwest reported a record first-quarter profit of $453 million amid steady travel demand and lower fuel costs.

Later Wednesday, Southwest announced it would start flying from Houston to Montego Bay in Jamaica and Liberia, Costa Rica — a new destination for the airline — on Nov. 1. The airline had announced several other international flights from Houston that will start in October.

Shares of the Dallas-based airline dropped 98 cents, or 2.3 percent, to close at $41.27. They have fallen 2 percent this year.