Last year Southwest Airlines shrank for the first time ever. Now the CEO says it could rebound with record revenue in 2010.

Gary Kelly said Thursday that the nation's biggest discount airline had strong bookings for February and March.

Kelly said 2010 will easily top last year in sales and could even beat 2008's record of $11 billion. He gave some of the credit to Southwest's heavily advertised bags-fly-free policy.

Southwest reported Thursday that January traffic rose 7.1 percent from a year ago.