- Southwest’s chief commercial officer said customers would “happily pay a little more” for a new fare category with perks.
- Potential perks can range from repeated guesswork about early boarding, additional frequent flyer points, free Wi-Fi or more ticket flexibility.
- “I think they’re only going to bundle up stuff that people might find useful,” said Brett Snyder of the Cranky Concierge.
Southwest Airlines has been talking to travelers and investors about a new fare category for months, which includes perks not offered to buyers of its cheapest tickets.
In December, the airline’s chief commercial officer said the undisclosed perks are something customers “will happily pay a little more than.”
“This will be an upsell to the advanced features,” said Andrew Watterson.
On the airline’s earnings call in late January, new CEO Bob Jordan touted the new fare category, which will expand Southwest’s ticket classes from three to four, as a promising revenue initiative for 2022.
Last week, Southwest’s chief financial officer Tammy Romo said more details about the new rental offering, which will begin rolling out by June, “are coming soon.”
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The prepared disclosure — the airline has been testing names for the fourth fare category since at least 2019 — is classic Southwest marketing and has prompted speculation online about how the new fare category, and those above and below it can be seen.
Repeated speculations on potential perks to entice travelers to purchase the unnamed new ticket type with the cheapest ticket, called Wanna Get Away: Early Boarding (Southwest famously doesn’t allocate seats), Additional frequent flyer points, free Wi-Fi or more ticket flexibility.
There has been a lot of heat on the changes in general since Watterson discussed the length of the new fares, with few details, at the airline’s investor day in December.
“Ah. Higher rent inflation under the guise of ‘Like’,” lamented a poster on the Southwest forum on FlyerTalk.
Here’s what travelers need to know about Southwest Airlines tickets, why the airline is shaking things up and the potential options on the table.
Southwest Airlines Tickets 101: Choose Business, Anytime, Want to Go Away
Southwest, the country’s largest domestic carrier, currently has three ticket types:
Business Select, its priceless fare, which is refundable and comes with a prime boarding position, an alcoholic beverage and other benefits;
Anytime, a similarly priced ticket that is also refundable but does not come with Business Select Extras; And
Wanna Get Away, its lowest price ticket.
All three earn frequent flyer points, the highest multiples among select business tickets, at 12 times the fare, want the lowest fare, six times the fare.
All tickets come with two free checked bags and there is no ticket replacement fee, although passengers are required to pay any difference between the fare they paid and the fare when they change tickets – made last minute. An expensive proposition on the go.
Why is Southwest adding a fourth ticket type?
With the new fare category and expected changes to existing categories, Southwest’s goal is simple: to boost ticket revenue. Jordan told investors in January that the new rental offering, along with a new computer system to better manage rents, would provide a “material boost” to Southwest’s revenue earlier this year.
A new fare category with additional perks is designed to entice vacationers and small to medium-sized businesses with its cheapest tickets to buy, though not to the extent that it is refundable or commercialized at any time. Will require the purchase of select tickets.
The gap between Wanna Get Away tickets and refundable tickets, once huge, has narrowed during the pandemic, but the airline says it still sees room for a fourth type of ticket.
“We aim to have four rental products each with more modest buy-ups between rental products,” he said in December. “That level of buying will be determined by the market.”
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It’s no different than what budget carriers like Spirit and Frontier do with their fare bundles or basic economy tickets with American, Delta, United and others.
“For me, it’s just another iteration of that,” said Conor Cunningham, airline analyst at MKM Partners. “It’s Southwest’s right on the whole situation.”
The bottom line is this: the new fare category equals the increase in fares, he said.
“A new fare structure usually just means a new price increase,” Cunningham said. “If you’re peeling it back it eventually means it.”
Does Southwest Airlines have basic economy?
Southwest officials insist that adding a new ticket type with perks won’t convert its cheapest tickets to basic economy tickets, adding to the many restrictions on those no-frills tickets that are cheaper than budget airlines. were built to compete with rents.
For example, United does not allow passengers to board basic economy tickets with traditional carry-on bags. They have to be checked in, if checked at the gate an additional fee is charged.
“Just to double down,” Watterson said on the airline’s earnings conference call in January, “we won’t take anything from Wanna Get Away.”
Travelers might not see it that way, but the verdict will come when Southwest announces the details.
Southwest wants to add perks to make you pay more for your airline ticket: What’s on the table?
Watterson said the new ticket type will have additional tickets in addition to those that are offered on take-away tickets, in addition “for which we believe customers will happily pay a little extra.”
Southwest already offers free bags, doesn’t charge for seat assignments like many of its competitors, and allows change on any ticket. So what does this leave on the table, assuming the airline isn’t going to start adding an extra legroom seat or allocating overnight seats?
Cunningham said he has “no idea” what Southwest is cooking up, but the new fare category will likely include more flier points.
Inflight Wi-Fi and/or a drink, worth $8 each and already included in merchandise select tickets, are possibilities, too, said Brett Snyder, who runs the Cranky Concierge travel service and writes the Cranky Flyer blog.
“I think they’re just going to bundle up stuff that people might find useful,” Snyder said, adding that he expects the new fare lineup to be overwhelming.
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One big advantage that will attract travelers’ attention as Southwest has open seating: automatic check-in or some sort of boarding priority.
With no seating, Southwest passengers line up from a boarding position and select an open seat once available on the plane.
The first slot goes to travelers who purchase select expensive business tickets, followed by top tier frequent travelers and pay for the airline’s Earlybird check-in, which ranges from $15 to $25 per person. Passengers in those groups are automatically checked in by the airline.
The rest of the boarding order is set during online check-in, with passengers setting an alarm to check-in just 24 hours prior to departure in hopes of catching a good boarding number. This process worries many passengers and sparks endless debates about seat-saving practices.
Southwest could include earlybird check-in, which is already a big money-maker for the airline, as a perk or add another feature that allows passengers to somehow “cut” the boarding line. allows. Cunningham said that at no time does the ticket price come with boarding priority, so allowances there would have to change.
Southwest currently sells last-minute boarding upgrades at the airport, when available, with fees starting at $30 one way, depending on the flight.