It’s time for airlines to get serious about finding creative ways to boost revenue. Higher fuel prices that aren’t showing any signs of going away mean that airlines are getting squeezed. Most airlines are trying to reduce the impact of higher fuel costs by introducing things like bag fees and premium seats. However, not all airlines are willing to take measures to squeeze a few more pennies out of every customer in response to rising fuel costs.
Southwest Airlines CEO Gary Kelly revealed during an earnings call last week that the airline has no plans to try to generate extra revenue by selling seats in advance. In fact, it was revealed that discussions regarding the introduction of assigned seating are currently not on the table at all. Customers who currently want to get a desirable seat must complete the check-in process up to 24 hours in advance and plan to line up at the gate early.
Southwest executives have been steadfast in declaring that the airline’s core policies aren’t about to change just because financial turmoil is hitting the airline industry. That means that Southwest customers shouldn’t expect any dramatic changes when it comes to fees. What has been confirmed so far in terms of what customers can expect in the months and years ahead when traveling on Southwest flights? Southwest customers can all breathe sighs of relief knowing that the current two-bags-per-passenger policy is going to stay in place for the foreseeable future. Southwest allows each customer to check two bags for free when flying. It has also been revealed that Southwest doesn’t have any plans to introduce ticket-change fees.
One other potential stream of revenue that many people have been speculating about is the addition of premium seating on Southwest flights. Could Southwest potentially add first-class cabins or provide extra legroom in exchange for pricier tickets? CEO Gary Kelly says that both of those options are unlikely to happen.
How exactly will Southwest thrive in the face of rising costs if no changes regarding fees are made? Kelly took time to assure investors during last week’s conference call that he has several ideas for short-term revenue generation in mind. However, those ideas aren’t being shared with the public just yet. Southwest does enjoy the benefit of being somewhat insulated from rising fuel costs when compared to other airlines due to the fact that it hedges more of its fuel. Fuel costs for Southwest are still up 17 percent this year when compared to last year based on the airline’s latest estimates.