Originally Posted by
uastarflyer
This is the key point. I've long asserted WN would regret not going along with the other airline fees, as those fee dollars are 100% pure cash profit.
Now WSJ is saying the same.
Does anyone have any real data to validate? I'd think by end of summer we'd have a solid 9-12 months of data look-back to make an assessment.
The best I've found is this from
Boyd Group:
$20. United's new fee for checking the first bag, up from $15. Read it and weep, consumerists: if the passenger will pay it without a whimper, why not? Southwest, with no fees, isn't currently besieged with disgruntled passengers from airlines in the ancillary-revenue camp. Some, maybe. But not a stampede. The open question is whether or not the number of new "fee-averse" passengers WN may be getting will bring in as much or more than the revenues they'd collect by charging for the first two bags.
$106.39. To analyze that question, this is Southwest's average fare revenue per passenger in the 4Q of 2008, from the Airports:USA Airline Financials package. So that means each passenger that switches to WN as a result of other carriers' fees represents 5.3 $20 baggage charges ($106.39 divided by $20). Apparently it won't take many such passengers to make up for what Southwest might otherwise gain from bag charges. If just 1,000 consumers a day - which is a drop in the Southwest enplanement bucket - are diverting to WN, it's almost $40 million a year in net new revenue, not to mention happy passengers.