• 4
    Feb
    2010

    For an airline that has done a good job of avoiding inflight entertainment like the plague, Southwest sure is diving right in when it comes to wireless internet service. The deal is done and wifi will start rolling out aggressively next quarter.

    Don’t get me wrong. They’ve been incredibly slow in actually getting to this point, but from now on, it’s going Southwest To Put Wifi Fleetwideinto overdrive. There are currently four test planes outfitted with wifi, but it’s been that way for about a year now. That’s one long test period.

    Southwest has now signed an equipment purchase agreement and that means two things:

    1) Wifi provider Row 44 is peeing its pants with joy now that it has a huge paying customer

    2) The last hurdle between Southwest and the rollout is gone

    Beginning in the second quarter of this year, Southwest will start outfitting a plane every other day. They hope to ramp that up to 25 per month soon after. With around 550 airplanes in the fleet, it’s going to take them about 2 years to get it completely done. When it’s done, however, they’ll be one of the largest wifi providers in the sky.

    How much will they charge? They aren’t saying just yet. According to their blog, “We’re still testing a variety of price points on the four aircraft that currently have wi-fi. We’ll have a decision on price in the second quarter of 2010 . . . .”

    Fair enough, but I think it’s safe to assume that the Business Select crowd won’t pay a dime while the rest of the herd will have to pay something. We just don’t know what yet. Heck, if they can get enough advertising revenue from a sponsor, maybe they’ll go that way from time to time. The good news is that they have complete and total control of the content, so they can do pretty much whatever they want on that end. That’s why they went with Row 44’s satellite option even though the ground-based option from AirCell would have fit their network just fine.

    For Southwest, this is the perfect technology. They’ve long avoided inflight entertainment because it adds cost. Airlines haven’t been able to charge for overhead movies for a long time, and in-seat video is costly. It’s not just the content but also the weight and the extra pieces that can break in each seat. It’s just not a Southwest way of doing things. But wifi is different. It does add a little weight, but it only gets installed in one place so you don’t run the risk of having a problem at every seat.

    More importantly, the test they’ve been running apparently shows them that they can make money on this, or at least make it cost neutral. (I have to assume that’s what the test showed.) That means that for the customers, it’s a nice perk that they’re willing to pay for. It also helps business people with productivity (even if they don’t want it, but that’s another story).

    This combined with Business Select and Earlybird boarding makes it sound like Southwest is once again trying to The Company Plane for more and more people.

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  • 23
    Jan
    2010

    American Airlines, oneworld Increased Offer to Japan Air Lines May Not Be EnoughBNET
    American is desperately trying to keep JAL in oneworld, but it’s not looking good.

    oneworld Alliance Will be Much Weaker if Japan Air Lines LeavesBNET
    If JAL leaves oneworld, what does it mean for the alliance? It’s not pretty.

    do your visa researchantibride
    If you’re traveling to exotic lands, make sure you find out the passport and visa rules before you go, otherwise it’ll be ugly.

    Delta, American Airlines Court JAL for Routes to AsiaNPR Morning Edition
    I chat with NPR’s Adam Hochberg about JAL’s bankruptcy filing and what it means for Delta and American.

    The Business Case Behind Boston Logan Airport Making Wireless Internet FreeBNET
    Boston Logan has made wifi free. Why would they do that? I thank Google.

    Codesharing ExplainedFly HIA Blog
    I dug into the world of codesharing for a guest post on the Harrisburg Intl Airport blog.

    Charleston Yeager Airport Expertly Uses Social Media During Recent Aircraft IncidentBNET
    An airplane aborted takeoff and ran off the end of the runway at Yeager. The media could have blown this out of proportion, but Yeager didn’t let them with their expert use of social media.

    More Passengers in Fewer Seats Means Profit for Southwest AirlinesBNET
    Southwest announced a profitable fourth quarter this week, even without special items. They appear to be back on track when it comes to revenue.

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  • 21
    Jan
    2010

    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.

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  • 20
    Jan
    2010

    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. Fortunately, a thoughtful reader took screenshots of every single page of his survey and sent it over to me. Today and tomorrow, I’ll be taking a peak at what they’re asking about.

    Please keep in mind that this was just a survey. We know that a change to Rapid Rewards is coming, but we don’t know that this is it. This is apparently just one of the potential scenarios they’ve been floating around. Have a read for yourself.

    Southwest Rapid Rewards Change Options in Survey

    It looks like they are taking a page from Virgin America and JetBlue with this possible change. You would earn points based on the number of dollars you spend. Higher class fares would get higher earnings (wait until tomorrow, I’ll show this). I don’t mind this piece of the puzzle.

    Where I’m not thrilled is with the redemption plan. This program would again be like those of JetBlue and Virgin America in that the redemption amount would vary. In this scenario, it would be directly tied to the selling price at the time you’re looking to redeem. While I see the value in this from an airline standpoint, I remain unimpressed by these programs since you really can’t save up for a free flight. The number is always changing. Of course, a cash + points option would make things somewhat better. If they go this route, I’d hope they’d consider that.

    This program would keep the A-list elite benefits, but my guess is that it would turn into more of a full-fledged elite-style program. That’s not necessarily a bad thing, but it will put a dent in Southwest’s egalitarian persona.

    Now let’s switch gears to something that has annoyed most Southwest fliers at one point or another . . . same day standby. While other airlines will generally allow you to standby for another flight on the same day (sometimes for a fee), Southwest has always required that you simply pay the difference in fare to the selling fare available at the time. It looks like they’re now exploring alternatives.

    Southwest Same Day Change Options in Survey

    So what are they throwing out there? Well, there’s the possibility of same day standby and same day confirmed, just like the other guys offer. They’re also looking at a priority same day standby option that would be offered to the higher fare classes.

    It does sound like Southwest is looking at becoming more like the other guys, huh? I hope they move very carefully here. We’ll talk about that more tomorrow when we look at the bigger pricing picture.

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  • 9
    Jan
    2010

    Short Haul Air Travelers Aren’t Buying Premium Tickets, May Be a Permanent ChangeBNET
    Premium air traffic numbers are looking a bit better on long haul, but short haul travel is still feeling the pain.

    Southwest Rings in the New Year with an Aggressive Denver PushBNET
    Southwest isn’t giving up on Denver – in fact, it’s kicking up its efforts there. People in Colorado are lucky.

    a new year brings new air travel security rulesAntiBride.com
    My first post for AntiBride in the new year talks about the newest security rules.

    Allegiant’s Unique Aircraft Order Highlights A Different ModelBNET
    Allegiant just ordered 18 new planes, 5 simply for parts, and they probably paid less for all these planes than you would for a single new 737-800. Oh yeah.

    US Airways Nearly Achieves Unit Revenue Growth in DecemberBNET
    Positive revenue growth? Not quite, but we’re almost there. It’s nice to see.

    Getting “Cranky” Over the Parasite Blogger MythStarkman & Associates Blog
    Eric Starkman has a very nice piece on the legitimacy of blogging vs traditional media, and Cranky features prominently.

    Don’t Fly Cranky, Fly WITH Cranky Concierge!AirlineReporter.com
    I spoke with David Parker Brown about Cranky Concierge and he likes what he sees.

    Airline Financials Should Get a Boost From Stellar Operational PerformanceBNET
    November was just a great month for airline operations, and that’s bound to result in a nice cost savings.

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