Why Southwest Should Consider a Change Fee

On Friday, Southwest announced it was adding a couple fees and increasing another. For most airlines, a Friday that sees a new or increased fee would just be called “Friday” but for Southwest, it creates some shockwaves. These fees are actually pretty friendly, and I can’t imagine anyone complaining, but the attention paid to this move shows just what kind of predicament Southwest finds itself in. And I’ve got a controversial suggestion.

But first, let’s talk about the three changes made on Friday. They are:

  • Small dogs and cats will be allowed onboard for the first time for $75 each way (American charges $100)

  • Unaccompanied minors (kids between 5 and 11 traveling without an adult) used to fly without an extra charge, but now they’ll have to pay $25 each way (American charges $100)

  • The third checked bag will now cost $50 instead of $25 (the first two are still free)

Like I said, these are hardly offensive charges. The pet fee is great, because it’s an additional option for those with small animals that wasn’t there before. The unaccompanied minor fee also makes sense. There is a cost to providing extra attention to children traveling alone, and $25 seems quite fair. And charging $50 for a third bag? Please. Anyone who is offended by that has never flown another airline and probably packs too much anyway.

These fees, however friendly they are, aren’t going to actually generate a ton of money for the airline. Southwest has made it clear that it needs to increase its revenues. In a rare corporate-speak moment, CEO Gary Kelly wrote in a blog post, “it is our fiscal responsibility to our Employees, our Customers, and our Shareholders to maximize our existing and potential revenue opportunities.”

The key for the airline now is to find ways to add fees that it thinks customers will find to be fair. In that same post, Gary says, “We truly believe in setting the right Customer expectation and not charging for those amenities that a Customer would ‘expect’ to get for free.” As a traveler, I appreciate that. But is there any low-hanging fruit that they could tweak to have a big revenue impact?

Yes. The change fee, or lack thereof.

I’m fairly sure that anytime the words “change fee” are put together, a collective gasp wafts out of Southwest’s headquarters. Southwest doesn’t do change fees, but I would argue that a change fee is in line with their strategy.

What traveler expects not to pay a change fee? A frequent Southwest traveler, yes, but not the rest of the world. Think about a $25 change fee. There are limited costs to Southwest for someone changing their itinerary, especially at the last minute. So would anyone really balk at a $25 change fee? Or what if you only charged the fee for changes within 7 days? The cost to the airline is the inability to resell that seat if it happens to close to departure. That seems like a fair fee to me.

Anything above $25 is too much for now, and certainly the $150 fee most airlines charge makes me cringe. But a $25 fee is enough for Southwest to be able to increase its revenues while still enabling customers to make relatively easy and inexpensive changes. I think this fits within what they’re trying to do.

What do you guys think?

69 Responses to Why Southwest Should Consider a Change Fee

  1. Wes says:

    Neoncactus, your post at 1325 on 06/02 says it all. Thanks for spelling it out as you did, I was beginning to think I was the only one who sees it that way.

  2. Deborah says:

    Unfortunately, I know why my husband and I don’t fly SWA. While the airlines does not call it a “change fee”, it certainly has one – the difference between fares. In our particular instance, we wanted to leave on a earlier flight, and found the difference in fare $300+ per ticket however the customer service rep continued to insist that there was “no change fee”. As a result, we will not be “changing” our flight and will not fly SWA again. While I realize this is in the fine print and readily available information, this is outrageous. As frequent flyers using Continental, we are not charged baggage fees and they do have change fees of reasonable amounts.

    • Ryan says:

      This is absurd. First off, other airline charge you the difference PLUS a $150 change fee. I once changed flights on SW and the new ticket was actually cheaper. They gave me back the difference (as a credit, but still awesome!)
      So they don’t charge fees and will give you money back if your new ticket is cheaper and take money if it’s more. Very fair.

      That said, $25 wouldn’t bother me much, especially if it was for changing late. (like within 24 hrs.)

  3. @ Deborah:
    Deborah,

    You mean to tell me (us) that this is only reason that you don’t fly Southwest? If the fare for the earlier flight was $300 less, I would suspect that you would be a regular user and you wouldn’t care whether it was called a change fee or not.

  4. CF says:

    Deborah wrote:

    Unfortunately, I know why my husband and I don’t fly SWA. While the airlines does not call it a “change fee”, it certainly has one – the difference between fares.

    You must be talking about same-day standby only, right? Yes, to standby for an earlier flight, you have to pay the difference in fare while other airlines don’t charge you for that. But for any other changes, other airlines charge you the difference in fare + the change fee while Southwest just charges the difference in fare.

  5. Deborah says:

    You missed my point completely. I mean to say that we would have gladly paid the $100.00 change fee assessed by other carriers rather than the difference in airfare which was $610.00 not known as a change fee. I am all for SWA putting in place change fees rather than the way it stands right now.

    @ Thomas Edward Parody:

  6. Wonko Beeblebrox says:

    I think you might be missing their point.

    Assume it isn’t a same day “standby” type change (since you can’t ahead of time guarantee there would be room for you on that earlier flight anyway).

    Any other airline would be a $150 change fee PLUS that $300 difference in fare. For each of you. Plus luggage fees.

    (As an aside, would you have preferred if there was no room for you on the flight you changed to?)

  7. Wonko Beeblebrox says:

    BTW- you could also simply have purchased a new one way ticket back on another airline and then reused the value of your original return ticket on some later flight (a “cheap” one…).

    There’s no change fee on Southwest…

  8. Josh says:

    Deborah is an idiot. NO ITS YOU WHO IS MISSING THE POINT.

    Airlines charge the difference in fare PLUS a fee, moron.

    And to the OP who suggested SWA charging a change fee, DIAF. Why the hell would you want to be charged more money?

    • CF says:

      Tone it down, Josh. No need for name-calling. You could just as easily have explained your position without it.

  9. Pingback: Southwest Restricts Unused Tickets, I’d Rather See a Change Fee - >> The Cranky Flier

  10. Scott says:

    I personally love SWA for their policies, and out of principle and loyalty will always fly them if I can. I am leaving for Europe tomorrow and have been enduring a nightmare just dealing with scummy Continental/United. $100 for 3 extra inches of leg room? Sickening. $150 to change a flight? (These airlines have no idea if a personal problem occurs, nor do they care). Southwest always gets it right. They are dependable andaffordable, but most importantly don’t treat their customers like commodoties. I personally love flexibility with travel dates so it is ideal. I hope they never change and that gradually over time they win over more and more fliers who revolt against all these horrible pathetic airlines. If only Southwest flew overseas, I would be set!

  11. mccuney says:

    You all got it right. SWA not only doesn’t charege a change fee, but it will loet you change the flights online and keep your confirmation number. That’s fantastic. Yeah there may be difference in the price of the new ticket, but that’s my problem for my decision making (done in haste or done in procrastination). Other companies don’t care, and they will tell that if there was an illness or emergency you need to check with your doctor or relatives. It is not there problem! Yet SWA, took care of my problems no matter what they were. Frequent flyer since 1979.

  12. Kelly says:

    SW just lost a customer here. I arrived early on a stopover and tried to get on a flight that left well before my next one. I was told that I’d have to pay $250 to do so, and yet the gate rep insisted this wasn’t a “change fee.” I called customer service to no avail. Sad that the ads are so misleading. As a frequent business traveller, I’ll no longer use Southwest. Hope this comment helps others stay away as well.

    • Kelly it wasn’t a change fee just the difference between what you paid and the walk up fare for the flight you wanted. That is why their ads are so misleading. They want the public to think all airlines make you pay the fare difference as they say, but the other guys are also making you pay a change fee. All that is not true since with other airlines if the fare you purchase still qualifies for the new flight you could pay a change fee of $75 or $150 or nothing at all if you purchased a no penalty fare. You could even get a refund if the new flight is less depending on your original ticket fare rule.

      Most WN passengers think that $39 fare they purchase 6 months in advance may only have a $20 fare difference since WN has done a good job of brain washing the public into thinking they have only those low type fares. I wonder how many people are surprised when they find out the new flight fare difference is hundreds of dollars as you found out.

  13. David, I don’t think that the ads are outrageously misleading. Rather, many folks don’t realize that “walk-up” fares tend to be much higher than “advance purchase” fares. Southwest has been doing what they are doing for quite some time now.

  14. What I think amusing is that people seem to be very opionated about any kind of ad on fees, yet they rarely if ever would know about it as all the airlines, including and especially the travel providers, all expert at disguising “fees” of any kind. They call fees everyting from opti-fees, to booking fees, processing fees, handling charges, billing fees, shipping fees, and those are only the ones that come to mind, though they are getting very creative todaywith some very unsual sounding fees, that only serve to bum up the profits of the company nothing more. I guess everyone has to make a living somehow, but really now, lets noteven give another thought to an airline decding to call something a “change-fee” because at least that sounds half-way honest. I mean they could have as easily called it the “high-altitude-decompressional fees” or [HADF] fees for short and would we really be paying attention? Then when we become incensed, we go to the competition who agrees that these fees are outlandish, they would never even dream of such tom foolery. So as you get in the taxi to go home and take out the competitors bill you can’t help notice the $25 dollar “No HADF Processing Fee” plus a $15 dollar DYRTWC Fee, uncommonly known as “Did You Really Think We’re Cheaper Fee”

  15. Pingback: United Jacks Up Change Fees, Earns the Cranky Jackass Award - >> The Cranky Flier

  16. Dan says:

    Add me to the list of Southwest misleads. I’m a frequent business traveler and today I wanted to get home 3 hours earlier. Every other airline I’ve traveled would just charge me $0 to $75 to grab an open seat, STANDBY. Southwest hit me for $299. I feel raped. To see them brag about “no change fees” when I got raped is ridiculous. Again, this was same day, standby, open seat, no reason for Southwest to treat me like I changed my day of flight or walked up to the counter without a ticket. Pathetic.

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