Southwest Taking Away 'No Fee' Ticket Changes Because People Cheat
December 19, 2012 at 3:09 PM
Southwest Airlines has long had a problem with travelers abusing the airline's no-fee ticket change policies. Customers would purchase multiple tickets for the same destination, choose the outbound flight they wanted, and then bank the money for future flightsbut not cancel beforehand. The result has been a lot of unused seats and a lot of lost revenue for Southwest.
To deal with the problems created by the "no fee" policies, Southwest has come up with a fairly straightforward solution. They're going to take away the no-fee policy and replace it with one that imposes a "no show fee" on passengers who bought super-cheap "Wanna Get Away" tickets and cancel before not showing up. Oh, and they're also going to start charging higher fees for travelers checking in more than two bags. And also for travelers checking in bags that are too heavy. And also for travelers who want to move to the front of the boarding line. So at least they're ambitious.
The background, of course, is that Southwest is suffering from the same problems as every other airline. Fuel costs continue to increase, profits continue to decrease, and their shareholders continue to get grumpy. Just the hint that Southwest might start getting serious about fees was enough to send company stock up more than one percent in the afternoon after the announcement, even though the new charges don't come online until after the new year. There's even some confusion about how much the new overweight baggage fees actually are, with Reuters saying $100 and CBS saying $75 (it's $75, per Southwest's policy page).
And though of course we hate the new fees, how about a little bit of good will to Southwest for delaying the new policy until after the holidays? It's a sharp and welcome contrast with a one or two other LLC's that took the opposite approach.
Video via Denver CBS:
[Photo: Denver CBS]