New Southwest Fare Structure a Blunder?

[Matt Molnar]

Even as a guy who is not easily swayed by cutesy marketing with fares named "Everyday Low Fare" or "Internet Special," last week when I saw the way Southwest's new fare structure is laid out when you search for a flight, my first thought was "wow, people are going to hate this." Sure enough, while feedback on the new boarding procedures has been mostly positive, complaints have been piling in to Houston about the new business-centric fares. Here's a report from BusinessWeek:

No ‘LUV’ for Southwest's changes
Carrier, used to positive feedback, hammered for new fare structure

By Christopher Palmeri
updated 3:16 p.m. ET, Fri., Nov. 16, 2007

The winds of change are producing turbulence for Southwest Airlines. On Nov. 7 the iconic airline unveiled a new fare structure that gives preferential treatment to customers who pay more for their tickets, a huge departure for Southwest (BusinessWeek.com, 11/7/07), which is famous for its lack of elitism. And the customer reaction has been surprisingly critical for a company more accustomed to abundant praise.

On the company's blog, blogsouthwest.com, negative comments have outnumbered positive remarks by more than five to one. "Not since Coke tried to change its formula years ago has a major corporation made such a marketing blunder," screeched one writer. "Herb, an SOS is needed," wrote another, addressing Southwest co-founder and Chairman Herbert Kelleher, who plans to retire next year. "We need you back."

The comments on other blogs and Web sites have been just as pointed. On Yahoo!'s financial message board one writer dubbed the changes "Kelly's Folly," a reference to Southwest Chief Executive Gary Kelly. Many comments echo those of technology consultant Vinnie Mirchandani, a Southwest frequent flier who fears that by creating different classes of passengers the Dallas company is losing the quirkiness that made it unique. "They've added a level of complexity," Mirchandani says. "The other airlines have all these analysts tweaking fares. I don't want them to be like the other airlines." Read More...

[Alex T]

Well Fact versus Fiction.

Truth: Nov 8th when Business Select was released, southwest.com sold 20% more then average tickets via southwest.com most of it with business select fares. Southwest.com hit a record in history of the most tickets sold online their website.

Checking seats and all, A LOT of flights are selling out of the business select fares.

We see this happening between MDW-CLE, DAL-HOU, MDW-LAS/LAX/SFO, STL-MDW, STL-DAL, just to name a few.

MDW-CLE the other day had 22 BUSINESS SELECT passengers on board in one flight, this means 130 bucks per business select fare, 15 bucks over the Y Fare (Business) is more profit that WN makes at absolutely no loss to the company.

The article can claim no one likes it but the fact seems to overide this here, and right now WN has seen huge success with the new fares.

But, as always, your not going to please everyone, Southwest included.

Alex

[T-Bird76]

Well Fact versus Fiction.

Truth: Nov 8th when Business Select was released, southwest.com sold 20% more then average tickets via southwest.com most of it with business select fares. Southwest.com hit a record in history of the most tickets sold online their website.

Checking seats and all, A LOT of flights are selling out of the business select fares.

We see this happening between MDW-CLE, DAL-HOU, MDW-LAS/LAX/SFO, STL-MDW, STL-DAL, just to name a few.

MDW-CLE the other day had 22 BUSINESS SELECT passengers on board in one flight, this means 130 bucks per business select fare, 15 bucks over the Y Fare (Business) is more profit that WN makes at absolutely no loss to the company.

The article can claim no one likes it but the fact seems to overide this here, and right now WN has seen huge success with the new fares.

But, as always, your not going to please everyone, Southwest included.

Alex

Alex the fact that the article is making is, is that WN is moving away from its base. Yes it does have to attract more biz customers because the yield is greater. However take your example of MDW-CLE, 22 Biz select customers got on board first pushing other people who might have got an A boarding pass down the A list or into B. What is happening here is WN is now classifying some customers as better then others which is not what WN was founded on. They prob should have went to assigned seating, WN's turns aren't all to much faster then the likes of B6, AirTran, and Frontier.

[Alex T]

Yes, WN is going away from their business plane. They started doing that in 2002 and beyond.

As for assigned seating, I think WN will do that but I have no facts to base it right now. Right now for WN it was apparant they had to make an immediate change to please the business folks. If WN only went to assigned seating, the business people are STILL not getting rewarded for their dedication to WN. In fact most of the business folks would actually probably get a middle seat and such since , correct me if I am wrong most business folks travel last minute and being last usually you wind up in the middle seat if it was assigned or, would get a C card.

This way, this new program ensures business folks who DO book last minute STILL get priority seating and boarding.

Again as I have brought up before, and yes you disagreed with me but WN didn't make this boarding decision lightly or out of a whim. Yes the final decision was made by corporate itself, but was surveyed heavily, and tested in different cities to find out which one the majority of the public voted on, and it was no assigned seating and reserved lines. Again, Tom I know you did not appreciate that, but the majority liked what WN is doing now.

Going back to business people, if you claim WN has to bring in more yields, how does going to assigned seating please the business folks, if WN comes across the situation I brought up before? At the system and operation WN was doing, I even had thought of it myself when i was a CSA, the easiest way to please WN's business folks who booked Y fares, had to be priority boarding before anyone else.

As for bumping people down, yes it does, but WN also expanded it to 60 cards per group. I have boarded as a B6 and a B27 and still gotten good seats I liked, of course I am not picky enough to care to get the emergency exit :twisted: but I liked where I was sitting.

Again folks, WN is just going with the majority of what the people wanted. Here is a link to another blog that SUPPORTED the new idea, totally opposite of what the link above does.

http://www.jetwhine.com/2007/11/southwe ... -the-past/

Alex

[NIKV69]

What is happening here is WN is now classifying some customers as better then others which is not what WN was founded on. They prob should have went to assigned seating.

Nothing more than the A, B, C boarding. I mean if someone checks in earlier they get the better seats. You can't get away from classifying people for better seating. If they went to assigned seating the business select people would get better seats anyway and they should. They are paying more. I only fly WN JFK-LAS-JFK and LAS-LAX-LAS so I will never see a business route but from where I sit this can only be a plus and a money maker for WN. Sure you are going to ruffle feathers but Alex is right out of 100 people 1 will never be totally satisfied. If they have issues they should just grab a tissue.