Southwest had a media day last week, but since I was in Denver I wasn’t able to make it. The big announcement from the day? The airline is rolling out a big ad campaign centered around “Transfarency.” This appears to be a campaign to convince people that Southwest still has low fares. And to do that, the airline is trying to get people to ignore the total cost to fly and instead just focus on fees. Because when it comes to fees, Southwest is always the lowest. When it comes to the total cost to fly? Not so much.
If your first guess was that Transfarency has something to do with special fares for transgender people, you’re wrong. This is actually a mash-up of “transparency” and “fare.” You can probably guess where this is going. Southwest has been beaten up by many other airlines, because it continues to bundle two checked bags and change fees into its fares. Spirit, of course, is the most vocal about this with its Unbundle & Unbundle campaign. Southwest is fighting back, though these competing campaigns are just going to confuse people more.
Who’s right? Well that all depends. If you buy a ticket on Southwest, you’re paying for two checked bags and a change as part of your ticket. So if you plan on checking two bags and changing your ticket, Southwest will most likely be the cheaper option. After all, since everyone pays for those services, the people who don’t use them end up subsidizing the people who do.
Of course, if you have no checked bags and you won’t need to change your ticket, then it’s highly likely that it will be cheaper to fly another airline. Those airlines make people who use those services pay for them independently. So if you don’t need them, you aren’t subsidizing.
But Southwest has had such an incredibly strong brand as THE low fare airline for so many years, that it doesn’t need to always be the cheapest. As long as people think Southwest is the cheapest, that’s what matters. And that’s what this Transfarency campaign is all about.
If you go to Transfarency.com, you’ll see things like this, a definition for the word:
Philosophy created by Southwest Airlines in which Customers are treated honestly and fairly, and low fares actually stay low — no unexpected bag fees, change fees, or hidden fees. Created and practiced exclusively by Southwest Airlines.
I think it’s hard to argue that bag and change fees are “unexpected” these days. Maybe were this a campaign from 2009…. But what Southwest is trying to do is distract you from paying attention to the actual total cost of your ticket and instead trying to make you focus just on the fees. It gives examples on the website showing how Spirit can charge you up to $294 in fees while Southwest has none. But the reality is that you probably aren’t paying that much in fees, and you’re starting off a much lower base fare. Even if the fees are higher than Southwest’s (as they nearly always are), the total cost often won’t be.
Incredibly, nothing illustrates this better than a chart Southwest put into the media day presentation (via AirwaysNews) trying to show just how low its fares are.
What Southwest is trying to show here is that its fares remain below the industry fare level in 2000, but that’s not what I see. What I see is that in 2000, Southwest’s average fare was 43 percent less than industry average. Fast forward to today, and the fare gap has shrunk dramatically. Now its average fare is only 13 percent less.
I know, you’re going to argue that’s because of fees, right? But when you include ancillary revenue, the gap is less, yes, but Southwest’s advantage still drops from 45 percent to 22 percent. The point here? Southwest’s fares have just gone up a lot more than those of everyone else.
This means that if consumers actually do compare each option as apples to apples, then Southwest is less likely to have the lowest fare than it once was. So Southwest instead needs to keep hammering into travelers that it is the low fare airline, and it needs to make it harder to compare to others. The airline still won’t participate in any third-party booking sites. That used to be a cost-reduction strategy. Now it’s a revenue-protection strategy; making it harder to see what others are offering.
In that sense, this is a great campaign. It will probably help to get people to believe that Southwest is always cheap. But what consumers should really do is compare their options and pick the one that suits their needs best. Chances are less likely that’ll be Southwest in 2015 than they were in 2000.
