In a response to a question at a recent session with students at UNLV last week, Gary Kelly, chief executive of the Dallas-based airline, said the airline—the busiest at McCarran International Airport—has begun the preliminary work of developing computer software to handle some of the transactions that would occur with flights to international destinations.

Kelly cautioned that the preliminary work doesn't mean Southwest has committed to flights and that the process of developing the software could take two to three years.

Kelly also said Southwest is in the initial stages of seeking certification to fly its twin-engine aircraft over water. That, he said, could open the door to flights to Hawaii or to the Caribbean.

Southwest has backed away from international flights in the past, citing numerous lucrative domestic markets that are much easier to serve. But the low-cost airline market has gotten more competitive in recent years with carriers such as JetBlue and AirTran gaining market share and US Airways revising its business model to attract more customers.

Kelly said that preparing for international flights gives the airline more options when aircraft is delivered from Boeing, which manufactures the twin-engine 737 that Southwest uses exclusively.

To serve destinations in Mexico and Canada, Southwest would have to seek U.S. Department of Transportation approval as well as permission from regulators in those respective countries. But in the early stages, Kelly said the company has to do its own internal preparations in order to sell tickets in international markets.

"We're talking about things like other countries' taxes and fees, currency conversion issues and working in other languages," Kelly said.

As for Hawaii and Caribbean service, Southwest must get special certification and employees receive special training for over-water flights. Southwest's Boeing 737-700 jets have the range to fly from the West Coast to Hawaii, but planes that make the run would have to have special safety equipment, including life rafts and employees who have received special training.

Southwest recently announced plans to offer Hawaii as a destination through its code-sharing agreement with ATA, which offers nonstop flights between Las Vegas and Honolulu.

Kelly was a guest of UNLV's Business Forum speaker series, sponsored by Wells Fargo Bank. Kelly addressed students in a morning gathering and local business representatives in a lunch at the Renaissance Hotel.

Other highlights in Kelly's appearances:

• Southwest will continue to grow at McCarran International Airport with at least 10 new round-trip flights planned at the airport this year. The airline flies about 215 flights a day, mostly from the airport's C gates. A construction project to build a bridge linking the B and C gates will enable Southwest to offer more flights from vacant B gates. The new connector also will enable US Airways to offer additional night flights from the C gates in the late hours.

• Kelly affirmed that the company has no plans to move its corporate headquarters from Dallas, despite efforts by several cities, including Phoenix and Albuquerque, to offer the airline a new home. Speculation was raised when Kelly commented that restrictions of the Wright Amendment made it difficult to conduct corporate business from Dallas. The Wright Amendment restricts long-haul flights by Southwest from its headquarters at Dallas' Love Field.

• Kelly remains optimistic that the Wright Amendment will someday be repealed. He said he is grateful for support from Sen. John Ensign, R-Nev., who introduced legislation in the Senate to repeal the Wright Amendment, and from Reps. Jim Gibbons and Shelley Berkley for their support.

• He explained that the airline's fuel-hedging program has been responsible for keeping Southwest profitable in the last year. The company is 73 percent hedged this year at $36 a barrel, giving it a cushion in 2006 when fuel is running at more than $60 a barrel. Last year, the company saved $900 million with an 85 percent hedge at $26 a barrel.

• Kelly said it's possible Southwest would add a new destination in 2006. The airline recently added Fort Myers, Fla., and Denver to its route map and Kelly said the Las Vegas-Denver route has been a success so far. Kelly did not hint where Southwest would go next, but analysts have speculated that Charlotte, N.C., and Minneapolis are on the airline's short list of potential destinations.