Southwest holdout on baggage fees is popular and profitable

Posted 12/09/2011

No one doubts that Southwest Airlines is known as something of a maverick. But who could have predicted that their well-publicized resistance to fees would further distance them from the rest of the competitive airline market?

Some say Southwest is leaving money on the table by not charging for bags.

Chief Executive Gary Kelly recently said, however, the carrier's "bags fly free" service has more than paid for itself. Since deciding against bag fees more than two years ago, he said, Southwest has gained two percentage points of market share and boosted annual revenue by $2 billion.

"Charging $100 for your bags, that's just not what we stand for," he told an audience at the Global Business Travel association convention.

Kelly said TVs on board don't drive more business and aren't cost-effective but that providing broader Internet access for digital devices is a money-maker. About 10 percent of the Southwest fleet is Wi-Fi-enabled.

Southwest has boosted business- travel efforts in the past few years, which Kelly said "is not a deviation from what we stand for."

The Dallas-based carrier, with its one-class cabin, has been known primarily for leisure travel.

Business Select — which for a higher fare gives the traveler priority boarding, a premium drink, extra Rapid Rewards points and priority-lane access. It was introduced "without changing the experience for everyone," Kelly said, according to The Denver Post.

By David Wilkening

Originally published 12 Sep 2011 at: http://rss.feedsportal.com/c/398/f/5923/s/18349c89/l/0L0Stravelmole0N0Cstories0C11493220Bphp0Dmpnlog0F1/story01.htm