Southwest Airlines is considering ways to boost revenue, generating curiosity among investors by saying that new avenues are “under construction;” however, the airline continues to avoid charges for bags, changing reservations, and assigning seats—which has the air industry wondering what will change.
At a recent meeting with investors, Southwest Airlines chief executive officer got everyone’s attention when he mentioned the airline is working on new ways to generate revenue. CEO Gary Kelly continues to skip fees other airlines accumulate for luggage, seats, and reservation changes—telling investors there are “better opportunities that fit our brand,” the Los Angeles Times reported—so now the industry is buzzing with ideas for what might change.
One optional new income stream could be customers paying more for better perks, including priority screening or getting their bags off the luggage carousel first. Another option is introducing a new fare class above the airline’s current Business Select offer; think a limited amount of seats with business class amenities like guaranteed access to the front four rows and dedicated spots in the overhead bins.
Southwest also does not plan to institute a basic economy class, but one way the airline could increase revenue is by reducing benefits in the cheaper fares, like not being able to use a cancelled ticket toward another flight.
The biggest concern in all this is the potential to alienate loyal customers.
“As long as Southwest offers these as add-ons and the consumer sees they are appealing, and Southwest doesn’t take anything from its core value proposition, they have a reasonable chance of success,” Henry Harteveldt, founder of Atmosphere Research Group, told the Los Angeles Times.
[Image: Flickr/D Coetzee]