Southwest Explores Change Fees, Bag Fees, and More

As I mentioned yesterday, Southwest has been circulating a survey to a bunch of fliers to try to explore all sorts of ways to make changes to their offerings. This explores change fees, bag fees, standby, Rapid Rewards changes and more. Yesterday we talked about Rapid Rewards and same day changes, but today I want to look at the bigger picture.

Before we get started, I’d like to remind everyone once again that this is just a survey. It doesn’t mean that these things are imminent, nor does it mean that it’s even being considered the way it has been presented. Surveys are always constructed to try to figure out what matters most to people, so I imagine that the results here would give Southwest an idea about what it can and cannot charge for in the future. I would be surprised to see something like this happen exactly as they’re showing it.

The survey itself threw out a bunch of different fare scenarios for hypothetical trips. There’s no need to post them all, so I’ll just show one and then we can take about it below. (Click to blow it up so you can read it.)

Southwest Fare Structure Options in Survey

As you can see, there’s a lot to talk about. The idea here seems to be along the lines of Air Canada – fare families where people can pick and choose the fares they like to get the benefits they want. Let’s talk about a few of these.

  • Check-in Time – I doubt we’ll see them reduce the check-in time for cheap fares, as they show here. Southwest is more of an airline to add benefits to higher fares than to take away from lower ones. I do like the idea of not offering EarlyBird to the lowest fares, however.
  • Bags – I actually would be fine with offering only 1 bag free to everyone, but I think it does make sense to differentiate what’s allowed depending upon your fare class.
  • Fare Reusability – This really isn’t something I even thought about changing. Now you can change your fare to be used for another ticket anytime within a year, but this proposes potentially restricting that further for cheap fares. I don’t like that idea. It’s very customer unfriendly.
  • Change Fee – This particular example doesn’t show any change fees, but other scenarios had them ranging from $25 to $100 for the cheap fares. I’m in favor of a small fee, as I’ve noted before.
  • Same Day Changes – This is one of the biggest complaints I hear about Southwest. People hate that you can’t standby for an earlier flight without paying the difference in fare. They are clearly exploring alternative options.
  • New and Improved Rapid Rewards – Those are their words, not mine. As I mentioned yesterday, I’m not sure how new and improved this will end up being, but I do think that the plan to award different multipliers of miles depending upon which fare you buy makes sense.

What do I think about this whole package? I think Southwest needs to be very careful not to become another legacy carrier. A lot of the policies that they are exploring have the potential for them to align a lot of their policies with the legacy guys, and that would be a mistake. That being said, I think there’s a lot of good in here as well.

Whether they act on any of this remains to be seen, but I imagine that we’ll be seeing some changes along these lines before the year is out.


24 Responses to Southwest Explores Change Fees, Bag Fees, and More

  1. Dan Webb says:

    I find it very interesting that Wi-Fi is included for all four of the fares…

  2. CF says:

    Don’t read anything into the specific categories offered here. This was one of more than a dozen scenarios in the survey alone.

  3. David SFeastbay says:

    On the chart for Business Select fare it says be in the first group to board (A1-A15). It makes it sound like they would only sell 15 of the highest price seats as if 16 people bought this fare then 1 of those would not be in the first group and would not get a benefit paid for. I can’t see WN not wanting to take more money for higher fares from anyone, so is A1-A15 an example or would it be extened to A1-A20 if 20 Business Select fares were purchase on a certain flight.

    I hope the above sounded like a intelligent question to ask. I wouldn’t want anymore rude comments directed at me such as “I get it, you think it’s sarcasm.”

    I’ve been reading your blogs and all comments daily, but no longer responding. Today’s blog did catch my eye on that Business Select option and was hoping the WN rep who responded yesterday may have something on that.

  4. Dan Webb says:

    @ CF:

    Very true. Though I guess I just found it interesting considering what was reported on the Row 44 walled garden approach awhile back.

  5. Dan says:

    I’m confused on a few things, but I must admit I don’t fly WN at all and so I don’t really keep up with the nuances of their business model unless I see them in someone’s blog.

    What is the difference between boarding pass availability and early/confirmed boarding?

    On “New Fare A” a same-day confirmed flight change results in no fare difference, but standby does?

    IMHO, New Fare B should be priced lower. For those whose travel plans are somewhat flexible, it looks like the Anytime fare presents the best value, without giving those who are taking the trip no matter what enough savings at the bottom end.

  6. Oliver says:

    Is there any timeline to when these changes would roll out?

  7. MathFox says:

    Oliver wrote:

    Is there any timeline to when these changes would roll out?

    No, this is just a survey. “Hypothetical scenario”

  8. Brian says:

    Wouldn’t charging one fare for a “one free bag” allowance and another fare that allowed “two free bags” essentially be a fee for the second bag with some “bonus” features (that actually cost the airline nothing) added in? Granted, it’s a more couched way of calling it a “bag fee” but that is essentially what it would be.

  9. Oliver says:

    I understand this is just a survey…but I do remember hearing that changes ARE going to happen. I’m just wondering when this was going to happen. Sometime this year? The Spring? The Fall? When Pigs fly?

  10. JayB says:

    Transportation people, and not just airline people, love details, and rules. Simplicity is not something that ever toucked their brains!

    Grew up with freight classification. “Q: How much will it cost me to ship a box of pencils from Podunk to Sheboygan? Response: Are they Number 2, or Number 2 1/2?” Very customer-friendly! And just about every one of those truckers is gone…kaput!

    Now the airlines carry on: “Q: How much is it to fly from BWI to PHX? Response: What will you be wearing?, OK, now do you want plan QXT1NVX, or Plan VBX7DR: we have 196 plans, you know! The actual fare, you’ll be glad to know, is $0. Your cost, none of which will be subject to the federal tax, is based on your choice of our wonderful 196, detailed plans. Have a pleasant journey!”

    Not you too, WN! Must we make this buying of an airline ticket any more complicated than it already is!

  11. Robert S says:

    Regarding one of the features they surveyed… I certainly don’t like the idea of an 18 hour ahead check in instead of the 24 hour ahead check in. It would add another layer of “When do I check in again? Subtract 18 hours… er, add 6 to yesterday…” complexity that would ultimately be annoying. And an 18 hour check in would make checking in for late evening flights terrible–you’d have to wake up at 2am to hit the 18 hour check in for the next day’s 8pm flight. A 22 hour check in would be more reasonable (if you’re flying tomorrow at 8pm, you’re probably awake at 10pm today) but would still add the time complexity.

  12. Axelsarki says:

    And to add to WN story, they had their 37th consecutive profit, making 99mil in the last year.

  13. Don says:

    One of the major reasons I use SWA is the fact that if plans change there is no change fee and that I can “Bank” the money and have a year to re-use it — they are only giving 90 days in the New Fare B. The major airlines have slit their own throats by charging change fees which are higher than the ticket. I don’t see what the problem is if the flight is not full, you are doing it online and paying the current price–it is no loss to the company. I usually don’t have checked baggage — charging bag fees to me is a dirty word.

  14. Scott says:

    No free same-day standby may be a common complaint heard about Southwest, but there’s a method to the madness. It protects the integrity of the fare system by preventing passengers from simply purchasing the lowest fare available on their date of travel and then showing up at the airport for their preferred flight. There would also be no reason for anybody to purchase the Anytime fare if standby was allowed for discount fares – Southwest has to protect the benefits of that fare for the passengers who paid for it. And since so many people complain about it, it’s clearly something they value. How dare Southwest charge for something of value.

  15. eponymous coward says:

    Scott wrote:

    No free same-day standby may be a common complaint heard about Southwest, but there’s a method to the madness. It protects the integrity of the fare system by preventing passengers from simply purchasing the lowest fare available on their date of travel and then showing up at the airport for their preferred flight. There would also be no reason for anybody to purchase the Anytime fare if standby was allowed for discount fares – Southwest has to protect the benefits of that fare for the passengers who paid for it. And since so many people complain about it, it’s clearly something they value. How dare Southwest charge for something of value.

    Sure there is.

    “Sorry, that flight’s full, we’re not allowing you to board standby, you’ll have to fly on your original flight.”

    I experienced that once, trying to go standby to DFW on AA during the day for an evening ticket- a plane went mechanical and I ended up wasting a bunch of time at the airport, because all the displaced passengers from that plane went ahead of me, and rightly so.

    Also- did you know that you can change same-day on a Southwest Rapid Reward if there’s space available, at no fee? I recently did this to get in to DAL on an earlier flight. But if that had been a PAID ticket… I’d have been charged a lot of money. Kinda weird, huh?

    My feeling is that if you’re willing to play Airport Lotto, sure, go ahead. Just keep in mind that saving $50 on the ticket to take a chance on airport standby may mean you get to spend a bunch of useless hours at the airport.

    The other thing is a nominal charge for confirmed same-day change (Alaska charges $25) IF there’s enough open seats isn’t going to cost Southwest very much- you can always hold back a couple of seats for last-minute passengers if revenue management thinks it’s worth it, and you might as well collect an extra $25 rather than let the seat go empty. You could even say “no standby, but if there are enough open seats on the day of travel, we’ll let you change for $(insert dollar figure here)”.

  16. million miler says:

    Same Day Changes – This is one of the biggest complaints I hear about Southwest. People hate that you can’t standby for an earlier flight without paying the difference in fare. They are clearly exploring alternative options.

    I am very confused about this one. First let me clearly state that I have very limited experience with Southwest in the past few years. Maybe once or twice per year.

    On at least two occasions I have arrived early at Dallas for morning flight to Houston. Each time I naively walked up to the gate of a flight that was boarding and was obviously half empty. Each time I was told I would have the pay the difference. Fair enough, everything seemed to be running smoothly so I just declined and went and ate breakfast till time to board the flight I booked.

    No hurt feelings, my meeting wasn’t going to start any earlier in Houston just because I got there early. If weather was looking bad and delays seemed imminent I would have probably paid to be certain of being on time.

    However later that afternoon in Houston, I got back to Hobby early went up to the gate of a flight about to depart and was allowed to board – no questions asked. As far as I could tell they didn’t even check the fare. Just waved me on.

    On a couple of occasions I can recall being directed to a special Stand By area in an unused gate space at Hobby where they had a whole group of employees just processing requests and sending passenger to the appropriate gate for the next flight to Dallas. Again, no question asked about fare paid. At least not in a way that was obvious to me.

    So really, what is the policy? I can play by the rules, but have trouble with inconsistency.

    By the way, Off Topic, but the way they dedicated an area to Stand By’s at Hobby seemed to make a lot of sense. With flights to Dallas spaced as closely as every 15 minutes at peak times it kept things flowing and avoided confusion. Especially if the 5:00 was running 10 minutes late on the inbound, while the 5:15 was loaded and ready to go five minutes early… Just make sure every flight goes out full and keep ‘em moving. Sort of a bus terminal experience, but if that is your business model, embrace it

  17. CF says:

    David SFeastbay wrote:

    On the chart for Business Select fare it says be in the first group to board (A1-A15). It makes it sound like they would only sell 15 of the highest price seats as if 16 people bought this fare then 1 of those would not be in the first group and would not get a benefit paid for.

    My guess is that they’ve never had more than 15 people interested in buying Business Select on a single flight, but if it gets to that point, I’m sure they’d bump it up. Really, I think a lot of these things are placeholders, just used to figure out what matters most to people. The details can always be worked out later if the feedback is good.

    BTW, I don’t recall a sarcastic comment – sometimes written word doesn’t convey true meaning very well. I hope that hasn’t discouraged you from participating again.

    Dan wrote:

    What is the difference between boarding pass availability and early/confirmed boarding?

    Boarding pass availability is when you are allowed to check in. Right now, it’s 24 hours before your flight. Early Boarding is the program where you can pay more to be automatically checked-in at the front of the line.

    Dan wrote:

    On “New Fare A” a same-day confirmed flight change results in no fare difference, but standby does?

    I wouldn’t worry about the details here. I imagine these questions have been specifically constructed to elicit certain responses, but if they decide to do something like this, I would hope it would be more rational.

    Oliver wrote:

    I understand this is just a survey…but I do remember hearing that changes ARE going to happen. I’m just wondering when this was going to happen. Sometime this year? The Spring? The Fall? When Pigs fly?

    They will be relaunching Rapid Rewards for sure, and that should happen this year. Whether or not it looks like what they’ve shown here remains to be seen, but no dates have been set. I believe the way it works is this: Southwest says they want to do something, they give a tentative time frame, they blame tech problems, they launch much later than planned.

    Don wrote:

    I don’t see what the problem is if the flight is not full, you are doing it online and paying the current price–it is no loss to the company.

    If neither your original or the new flight is full, then there is no loss. But if the flights are full, then there is somewhat of a cost. I think that a $25 change fee would adequately cover that (pulling this completely out of the air), but certainly not $150.

    Scott wrote:

    There would also be no reason for anybody to purchase the Anytime fare if standby was allowed for discount fares

    This has already been addressed, but there is absolutely a reason. Standby isn’t a guarantee, especially now with load factors approaching 80% on the airline. I would love to see the data, if there is any, on how many people who would pay $25 to standby would be willing to buy up to a higher fare. My guess is that Southwest could actually make more money by getting a higher number of people to pay the low standby fee than they can get from people buying up.

    million miler wrote:

    So really, what is the policy? I can play by the rules, but have trouble with inconsistency.

    The policy is definitely that you have to pay up to the current fare if you want to change. I wonder if the triangle routes get a little more lax since it’s like a shuttle operation? Dunno.

  18. MeanMeosh says:

    I wouldn’t necessarily object to a new, “lower class” bucket of fare with fewer benefits, IF they would also provide a discount to compensate. For example, if the current “Wanna Get Away” fare from DAL to ABQ were $85, I’d be willing to accept the loss of one bag, fewer Rapid Rewards credits, etc. if they would drop the price to, say, $70. If I knew ahead of time that I would only be taking one or no bags, don’t care about what seat I get, etc., that would be a pretty good deal to me. What would irritate me is if they just strip benefits from the current fare level, keep the price the same, then try to make you upgrade to a higher level fare to get those same benefits back. That’s little more than a disguised fee situation.

    WN does need to introduce some form of same-day standby (but, like Million Miler, I once stood by on an earlier flight from MSY to DAL, and they didn’t ask me to pay anything – and I wasn’t flying on a full fare). $25 would be fair, in my opinion, though maybe they could waive it in the event of a “no harm, no foul situation” – lots of empty seats on the earlier flight, your original later flight is overbooked and they need your seat, etc.

  19. JJG says:

    SWA might consider a 2 level “Wanna Get Away”. Right now, I’ll bet 80-90% of their tickets are booked in that bundle. Maybe the “premium version” allows $25 day of flight stand-bys and 2 checked bags while the “discount” version reduces that to one bag and employs the current flight change rules. The “discount” fare should be cheaper than the current prevailing rate, the “premium” more. Frankly, maybe they just need to change the rules and fares for the current “premium” classes to get them better utilized. I’ll bet that “one free drink” offer didn’t mean a thing to any prospective passenger.

    In either case, I think they need to be very careful about not impacting their Fare Reuseability feature. I regularly “bank” hundreds of dollars with SWA fully understanding that my leisure travel plans months in advance may change. I am always comfortable paying the prevailing fare bucket weeks in advance if I need any changes down the road. And if I cancel, 12 months from the date of original purchase is enough time to burn the cash. Right now, I have August SWA tickets on a RT that I’ll probably, but not certainly take. That money is good through next January. I am certain that I would travel less if I couldn’t take advantage of sales when they pop up, toss a leisure trip in my “bank”, and then go or not go based on future circumstances.

    I do think I agree with you that a nominal change fee of $25 might be in order for flights scheduled just a few days out, say 7 or less. Not 30 or 45 when the airline could really care less.

  20. Sealand says:

    I don’t see service getting any better, why should (hidden) costs be continually added? Travel is up.

  21. Ron says:

    Cranky, did any of the survey screens mention the senior fare? As far as I understand, currently seniors get a walk-up fare of no more than $220 anywhere in the system as long as there’s a seat available. It’s fairly important for people like my wife’s mom — she nearly always flies on lower fares, but the senior fare is sort of a guarantee that she won’t be too badly hurt if she needs to change her plans at short notice (which does happen).

  22. Robert S says:

    I’m with JJG a couple of posts prior. I travel more on SWA and more overall than I would otherwise thanks to the reusability of travel funds. A close in cancellation fee would make sense to address the potential loss of revenue if there’s not enough time to re-sell the seats (Cranky you’ve suggested this as an option before as I recall). I’d even like to see a much larger (maybe even 100%) “no-show” fee on nonrefundable tickets; that would cut down on the need to overbook.

  23. CF says:

    Ron wrote:

    Cranky, did any of the survey screens mention the senior fare?

    Nope, not that I saw. I would be surprised if the senior fare went anywhere, but then again, I have no real clue.

  24. It is very interesting that Wi-Fi is included for all the fares. I like this!

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