Southwest’s Big Changes

Southwest

Today was a big day for Southwest Airlines as they rolled out a bunch of changes to the core parts of their business. I’ll get into each one of them, but overall I like what they’ve done. No point in getting into details overall, so let’s dive right in.

They made five big changes today. Two of them, the new boarding process and the redesigned gate areas, were already announced before so I won’t get into details. They are, however, rolling out the new boarding today everywhere. (I’m actually flying them this morning to Vegas, so I will let you know how it goes.)

The other three changes were the details we’ve been waiting for regarding their long-awaited attempt to woo the business traveler. You can read about them on their website, in their blog, or in their press release. But I’d recommend just reading my summary below and then visiting the website for the best information.

Simplified Fare Choices and Business Select

Let’s start with the ones that will likely impact the largest number of people, the new “Simplified Fare Choices” and “Business Select” options. If you’ve ever flown Southwest, you probably recognize this image:

07_11_08 WN Old

This is the standard Southwest fare interface on their website. They have the “Refundable Anytime” fare (also known as the YL for fare basis junkies). Then everything else to the right has a variety of advance purchases and limits on availability. You can see how each flight stands in terms of availability. Now, here’s the new interface:

07_11_08 WN new

Pretty spartan, huh?

Now, “Refundable Anytime” becomes “Business.” It’s still refundable and changeable and all that good stuff, but it will no longer be the highest fare. That is reserved for the new “Business Select” fare which will be a bit higher (not sure exactly what that means yet). The difference here is that you’ll get a free drink (big deal), an automatic A boarding pass (that really IS a big deal), and more frequent flier credit (a nice bonus). While other fares get 1 credit per flight, these customers will get 1.25 for a flight under 750 miles and 2 for a flight over 750 miles. If it is truly a $10 to $30 bump, I’d say it’s worth it.

That’s a good way to get more revenue out of their passengers while still providing a good value. I like it, even if the name is lame.

But then we have the other end of the spectrum. Now, all those fare classes that were separated out will be bundled up into one “Wanna Get Away” fare class. It’s not that those fares are going away, they’re just becoming more opaque, more like a legacy airline display. This category will show you the lowest fare available in that class. But what if I’m right at 14 days in advance and want to know what it will be if I wait a day? Sorry, no dice. You can’t find it out, I’d assume. I’ll know for sure once I can test it out live.

This is the one thing they’ve done that I really don’t like. It makes the booking process more opaque and that’s not a good thing. It’s not like they’re making their fare structure less complicated. They’re just showing you less of it. It’s like they say on their website, “We’ve done the shopping for you. . . .” But I don’t want them to do the shopping for me. I want to see all my options.

Rapid Rewards Changes

The last piece of the puzzle here involves changes to the Rapid Rewards program. Most interesting is the creation of the new A-List. If you fly 32 flights in a 12 month period (and yes, you have to fly each one, no double credits or anything like that), then you will automatically get an A boarding pass on every flight during the next 12 months, even if it’s on a Rapid Rewards free ticket. They’ve basically created an elite level for their frequent flier program. In theory I like it, but on heavy business travel routes, it’s possible that there could be so many A-Listers (or people buying Business Select) that even someone who checks in 24 hours in advance could end up with a B boarding pass. That would be a bummer, but I guess you get what you pay for.

The other change to the program is the addition of Freedom Awards. You may remember that before recent times, each free ticket could be used for any seat on any flight except on a handful of blackout dates around peak holiday times. Then they changed the program to be more like those of other airlines. The blackout dates went away, but you couldn’t use the awards for every seat anymore. They became capacity-controlled.

Well, now the (mostly) unrestricted award is back as the Freedom Award. The difference is that it costs you twice as much as it did in the good old days. Now you can convert two standard awards into a Freedom Award which you can use any day except around Thanksgiving and Christmas. This is pretty much how legacy carrier programs operate. I have to say, it’s nice to have that option. There are frequent fliers out there who cannot use their awards fast enough, so for them this will be most helpful, especially if they’re trying to fly during a busy time.

As you can see, these changes are all focused on improving the experience of the business traveler. I realize Southwest had to figure out a way to improve their revenues, keep business travelers happy, and not drive the core leisure travelers away from the airline. I think what they’ve done is about as close as they can get to achieving those goals.

They’ve kept the core of the airline the same. There is still only one class of service onboard, there is still open seating, and there are still no change fees. To me, that’s the heart of the matter. As a more infrequent, generally price-sensitive Southwest flier, the only thing I don’t like is that there will be a bunch of A boarding passes ahead of me no matter what I do. We’ll see how much of a problem that becomes. If it makes getting a good seat just about impossible, then I will most likely start flying someone else. But if that’s not the case, then I won’t change a thing.

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14 comments on “Southwest’s Big Changes

  1. I’m honestly a little concerned about all the changes to the A boarding group. I don’t fly enough to make it on to the “A-list” but I fly enough to be really effected by these changes. The route I primarily fly (LAX-SMF) is a very heavy business travel route and most of those flights have a load factor greater then 90%. This means that I’m the type of traveler that could be getting the short end of the stick by SWA. Time will tell if this change effects me as much as I think it will. Even if it does effect me in the manor I believe it will I wont have another choice for my flights as SWA is the only way I can easily get from Los Angeles to Sacramento.

  2. I have the same concerns as you, Chris. So we’ll just have to wait and see what happens. You do have plenty of options to get to SMF though. There’s UA or DL out of LAX or B6 has a couple a day from LGB.

  3. I’m with the group on this one… the ability for frequent travelers to max-out the ‘A’ group no matter what is a big enough reason for me to ditch WN altogether. Frankly, I’m not a fan of WN to begin with… but I’ve slowly been warming-up to them again now that they have made some major improvemnets (new plane interiors, more non-stop routes) over the past several years. This newest change could ruin all of that. I guess we’ll see… but I don’t want to find out the hard way.

  4. I see Business Select as an ersatz-premium economy/business class ‘lite’ product: first on, first choice of seats, free beverage, bonus FF credits.

    I do not currently fly WN for several reasons. Until recently, WN did not serve an airport near me. The closest airport in my area that they did serve is about an hour away on public transit, or $70 and 35+ minutes by cab. Plus, I do not care for WN’s cattle-car boarding, open seating and fear of encountering their singing flight attendants. Other airlines, including both network and LCC lines, more than fill my needs.

    WN recently opened service at an airport closer to where I live. And with the declining service of the largest airline (a legacy carrier) at that airport, plus WN’s new Business Select product, I may give them a chance. Give me access to the priority security screening lane, and I’m there.

    Cranky, I agree with you on the degradation that WN gave to its various advance purchase fares. It’s clever that they are grouping them under the “Wanna Get Away” label from its advertising campaign, but WN shouldn’t take away customer choice and control. WN is shooting itself in the foot with this move; there are leisure travelers who will pay extra for advance purchase fares if they offer greater flexibility or convenience.

  5. Where to begin with S/W. I have been flying them since the mid 80’s, and up until the change in restricted Rapid Rewards seats was VERY VERY satisfied, and paid a little more to fly them when others were cheaper. After the first change, I have flown them 75% less (I fly 2-3 time per month). Their NEW pricing structure (along with the limited Frequent flyer seating) will cause me to only fly them when they are the cheapest by $100.00 or more. I wish the company and their stockholders luck, but believe they have made a very poor business decision.

  6. I’m going to go out on a limb here…and say this is great for SWA. Come on, at a macro level it’s natural to hammer on something you haven’t tried or been affected by yet. For those of us who did college in the last 5 years do you know how many people predicted the downfall of Facebook when they instituted “News Feeds” (now the most profitable and, in hindsight, the breakout addition that differentiated it from MySpace)? About 100%. My irrelevant example aside, SWA is great, (hopefully) the fliers will adapt and hopefully they’ll make more money, allowing them to persevere in this era of massive subsidies to legacies via convenient bankruptcy protection and restructuring. I do live in HKG, fly CX and thus am pretty fair game for criticism because I won’t be really affected like those who fly all the time SWA. But if you’re really flying all the time on SWA this will be great for you…18 round trips isn’t bad at all! And it remains to be seen how troublesome it is to get your coveted A boarding pass…but also factor in the new boarding process, where there are more “buckets” of pax. I know myself in the past two weeks I’ve given up my F United tix from LAX-SFO and then SFO-SEA to fly SWA, because scheduling is better and I don’t want to deal with the disaster that is UA. If I buy a full-fare SWA tix there are so many options and it’s just less hassle and less stress. No frills, no bs, save more time.

  7. QRC, I don’t think you are going out on a limb by defending the changes. I was reading some of the comments on the SWA Website and SHEESH, you would think SWA announced that it was trashing its whole operation, merging with American Airlines and going to be operating as American Connection or something.

    CHILL OUT PEOPLE! I would have posted on the SWA Blog, but I figured there would be a more polite and intelligent debate/conversation about the topic on this blog.

    Personally, I think the only major mistake SWA made in all these changes is not providing more information and details sooner. People are all in a frenzy about losing their “A” Boarding Pass to Business fares – but there are only about 15 of those seats available as I understand it. And I can’t imagine that there will be 45 A-listers on a single flight as to hoard up the rest of the A passes. But even if there are, I’m usually the lazy one who checks in whenever and usually end up with a “B” pass. GASP! Yet, I have never sat in the middle seat on SWA. Even on full flights.

    I agree with CF that bulking all the leisure fares takes transparency and freedom away from the consumer. It would have been more desirable to create less categories, to be sure, but not only 1 “Wanna Get Away” category. And the “Business” label is soooooo boring and lame. SWA could have been more creative about that.

    I find myself believing that people are less upset by the actual changes themselves and more upset about the philosophical shift they perceive this to mean for the airline. I read many comments expressing dissatisfaction that SWA was becoming more like legacy carriers. Hogwash. That claim is indefensible until I start feeling the same wariness and fear going up to a SWA agent as I do going up to an AA agent.

    All in all, everyone needs to just chillax and at least wait to see how this goes before pouncing!

  8. So, here’s the big question that I’ve been discussing over at PlaneBuzz. Why didn’t they bother letting every fare pay $10 to $30 more for an “A+” boarding pass. If you’re willing to take that money from someone who was going to buy a biz fare, why not be willing to take it from someone paying a low fare? It’s like the Economy Plus upgrade on United. I think they’re missing out on a revenue opportunity.

  9. Now THAT is a swell idea CF. Makes good economic sense and it will possibly quiet some of the egalitarian arguments being made about losing equality at SWA. Nice!

  10. I just read the PlaneBuzz blog you linked up above. DUDE, the author of that article is SO RIGHT ON! Southwest could have created basically EXACTLY the same pricing scheme they did now, but marketed it in such a manner that everyone would have gobbled it all up. I loved that post’s ideas and wished SWA, the airline that took a mini-skirt incident and made it a national sale advertisement, would have thought of that themselves. Too bad.

  11. I agree with CF on this issue. Allowing every fare the option to pay an extra $10 to $30 bucks is the best way to go. If they truly want to bring in as much rev as they can this is a nice option.Taking money from a customer is what it’s all about for them anyway, regardless if it’s biz class or coach.

  12. I had the unpleasent oppertunity to find out about the business class and the crap that southwest has done to get an “A” bording pass the other day after I went to checkin online less then a minute after it opened up for the flight I was on and got a “B” pass. I am a rather tall person (6’7″) and I enjoyed getting the A boarding passes so that I could get a seat in the exit row or the front with more leg room; now Southwest has taken that oppertunity away from all of us. Some my say buy the business class then….When I fly for work it is governmental so paying the extra $100 is not an option and like I said I work for the government so when I fly personally that is not an option; and when I fly with the family why should I have to put out an extra $400 so that I can get the leg room and we can sit together. I guess I will just fly Airtran or some other airline where I can pick a seat ahead of time (BTW AIR tran lets you upgrade to Business calls (lots of leg room and only 2 seats on side of plane insted of 3 for an extra $40). I think that this new Southwest policy is just a way for them to steal money out of the pockets of the travelers they supposidly cator to.

  13. i am very upset that southwest changed their website. it was so easy to use before and i never had any problem. My grandma was also able to us the previous website. IT was basic and basic was good. now it is to much. the deals are not good and there is no differentiation between this website and other websites.

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