Southwest Airlines used to sue everyone who would show their schedules and fares to passengers. They wanted their website as the only source for this information.
Now they opened up to allow Google Flights to show their schedules and prices. And they’re now letting Kayak do this too. What’s behind the change?
- Obviously Southwest Airlines needs more customers. They haven’t been full, and their fares have been too low. That’s led to losses, and to an activist investor trying to oust management.
- But it’s much more than this. Southwest has real problems, and expected regulatory changes to make their trips look more attractive too.
Southwest Airlines on Google Flights
Apparently, as Enilria recalls, Southwest has a disagreement with Kayak in the past over showing its fares and they came to a détente.
Southwest had it out with Kayak years ago that resulted in an agreement to only show their schedules and not their fares. Southwest never sued Kayak or sent them a Cease and Desist request, but there was an understanding that Kayak was not allowed to scrape fares from Southwest. Southwest has, however, sued many other websites that monitor its prices.
Southwest Airlines fares are often more expensive than competitors, but they include two free checked bags. Online travel agency sites showing just schedule and price don’t do a good job making this comparison.
The federal government came out with new rules that were going to require everyone that shows schedules and prices to make comparisons including fees like seat fees and checked bag fees. That was going to make Southwest look much more competitive, and they wanted to have their fares displayed online side-by-side so customers could choose them.
However the U.S. Court of Appeals for the Fifth Circuit enjoined this Department of Transportation rule, suggesting that airlines challenging it had a high likelihood of success on the merits showing that the agency exceeded its authority, and that they would suffer irreparable harm if the rule went into effect while the challenge proceeded. Now Southwest fares don’t look so good on online travel agency sites.
Enilria points out that Southwest has a problem and desperately needs customers online to see their fares because in markets where Southwest isn’t a dominant player, customers don’t think to check their website.
Even in ATL they only get about an ~8% share of residents and are living mostly on the ~12% share of visitors to keep them breathing. In Houston IAH which they gave up on, they only had about a 4% share of big city folks, while they had a 6% share of visitors from the rest of their network. That’s staggering in a city where they should have loyalty from nearby Houston HOU where they hub. In a place like New York LGA it is even more jaw dropping with about a 4% share of Residents and about 10% share of visitors. They had to fix this or they would have hit a wall on capacity growth…and fare growth.
Southwest’s problem is similar to what Washington Dulles-based Independence Air experienced 20 years ago, launching with some brand awareness in the D.C. and Northern Virginia market market but nowhere else and not paying for distribution on other websites. They’d have 4 daily flights to both Charlestons but nobody in either city knew about them!
Credit: Frank Unterspann via Wikimedia Commons.
They had to send their planes somewhere, they had a huge operation as the rebranded Atlantic Coast Airlines (United wanted to cram down the fees they paid for the United Express carrier, so they made the foolhardy move of striking out on their own), and while they lasted their fares were dirt cheap for anyone who knew to look.
One day they loaded their own mistake fares after midnight, pulling them about an hour later, and then called the Washington Post themselves to say they’d be honoring the fares for the ~ 4 people who booked tickets (‘You never know what kind of great deal you’ll find at FlyI.com!’). But nobody in their destination cities knew about them – all their bookings were coming from the D.C. market alone.
But if they’re on comparison sites, don’t their prices need to be competitive? Don’t they need to have the lowest prices, and probably therefore basic economy? With assigned seats it becomes easier not to offer assignment until closer to departure. Fares might be non-changeable. And they might include just a single checked bag rather than two (so Southwest can still advertise that ‘bags fly free’ which is a key competitive differentiator).
Of course discussions with Kayak about showing their prices would have been underway on the assumption that the DOT rule requiring all schedule displays to include prices with fees would be going into effect. Displaying fares everywhere makes sense when it’s more apples-to-apples, which Southwest expected to happen. Now the future of that rule is in question, and it throws a monkey wrench into Southwest’s revised distribution strategy to win customers out of airports where they’re smaller.
How could someone try to stop me from reporting schedules or price? It seems a basic first amendment issue.
Southwest is an airline for losers, minus the occasional billionaire or otherwise successful person whose travel needs happen to involve a very obscure segment, like MCI/STL, which only Southwest flies.
Every halfway ambitious young person today is interested in international travel, miles and points, lounges and upgrades, and not feeling like they’re in kindergarten lining up to board next to those silly pillars at Southwest gates.
Fascinating analysis, Gary, thanks for pulling this together. Love the comment from @SFO/EWR !!!
Thank you SFO/EWR. I completely agree. I *had* to fly SWA based on schedule recently. No thanks – not my crowd. I don’t want to fly with people who want egalitarianism as a flight perk. I include BUR-OAK as an example.
ambitious young people comprise 10% of young people
southwest has an infinite supply of bridge & tunnel, ghetto & trailer trash, that all age in to kettles
they share those demos with the other 3 legacies
@joseph, have you been in the back of the bus on the other 3 legacies any time since 9/11?
despite the effect on our NATIONAL SECURITY, wall street has made egalitarianism a feature, not a bug, of the painware manual for us commercial travel
You want to make money as a new carrier? Purchase left-over C-130 military aircraft, fill ’em with military style bucket seats, invest in easy to serve lunch boxes, and fly from New York to London and back – that’s all.
If it works (it’ll be a LONG flight) then expand but keep all segments under 8 hours.
You’ll make a ruddy fortune, trust me on this. I’m a former Military pilot and know the C-130 backwards and forwards, especially the old ones.
It is pleasing to hear from those here who bash Southwest – those of us who love Southwest are glad to know that these snobs will never be on board and complaining in their whiny little entitled voices. Just another reason to love Southwest…
@SFR/EWR That is a pretty obnoxious comment you made. The vast majority of passangers on the legacies are flying domestic in economy. The experience is a commodity product since all are fly 3×3 seating with 28-32 inches of pitch. Southwest transports the most passangers within the US. Their product manages to attract a lot of customers.
When Southwest fares are shown on Matrix, THAT will be a newsworthy story.
Until then, meh, who cares?
Booking using an OTA rather than direct is a mugs’ game for folks who enjoy making their lives difficult and who enjoy pain.
I admit to flying Southwest when its a short flight and the fare is cheap
Long haul no way.The seats are uncomfortable and the width of the seat should be outlawed
They do seem to attract more of an undesirable cross section of the population however
Spirit & Frontier are still worse with the gutter crowd and downright scary
Maybe SW airline company is doing this because they are now realizing that they can no longer get away or hide there wrong doings any more because it’s bound to get out in the open with time,so I would have to figure that they’ve chosen to now play things safe so they can get in front of any bad presses or negative stuff being released against them.
I’m not sure I get the logic that fares shown on comparison sites have to include checked bag fees or seat assignment fees.
1) I may not be checking a bag when I fly. Checking bags is not required to fly an airline.
2) I may not request a premium seat when I fly. I can fly without a seat assignment (which is the default for Southwest!)
3) I hold Delta, JetBlue and American credit cards and don’t have to pay checked bag fees on either airline even if I wanted to check bags
Why should Google/Kayak need to show higher fares than many customers would actually pay? Would Southwest have to include their “Early Bird” fees in their pricing?
I agree that taxes should be shown for hotel and airline prices – and in the case of hotels, resort fees (which the hotels try to collect from everyone) should be shown as well. But these airline charges seem different to me.
Also, you don’t “need” to have the lowest prices on comparison sites. But you do need to have the lowest prices IF your reputation is being a budget airline with a convoluted boarding process, limited amenities, no lounges, etc. Too many customers in the US hold airline credit cards, have visited lounges, have experience picking seats with extra leg room, etc. Customer expectations have adjusted, and Southwest won’t solve the issue by getting on a few more sites.
People often say SW needs to charge for bags/seating but their fares are so high those things are already priced in. If they charged for them the fares would be non-competitive. I’m mostly flying them due to the companion pass otherwise I’d be looking elsewhere since I rarely need to check bags.
Spot on @SFO/EWR
@Gentleman Jack Darby I suspect a lot here do what I do: check a site that shows all airlines, then book directly with the airline.
@Anthony. Yep, WN would love to have their airfare posted next to the others plus two bag fees plus a seat fee to look better, even if the person searching would pay none of those.
Truth is simple: SW did not want to pay referral fees to Google. Now they realize it makes sense and agrees to pay those fees.
SW is not a discounter airline, prices has been high for decade.
Loading policies has been outdated and being abused heavily as noone at gates care.
@Dave W – obviously someone else that has no clue about the “first amendment”. It only protects people from government control on speech (and even then there are exceptions). Companies can protect what they consider their intellectual property. Sure you can tell someone about fares or schedules but post g that information is an IP violation of you don’t have rights to the data.
People are so ignorant and clueless!
@AC “People are so ignorant and clueless!” Yes, they can be. I don’t need your lecture on first amendment rights. My question related to the ability of WN to prevent me from repeating that which they have made public, which is certainly different than other IP issues. But, discussing subtle issues is less fun for you than bashing someone you perceive, quite incorrectly, to be poorly informed on an issue?
AUS-DAL use to be 50 minutes block to block in both B737 and MD80 . . . did the tectonic plate of the Balcones Escarpment shift?
Those that arbitrarily bash Southwest do not know southwest. After struggling with Delta on opportunities to use my annual companion certificate….. I now have the unlimited Southwest companion pass which is amazingly easy to use. After sitting next to overweight people “assigned” to sit next go me, I can choose another seat or board just few minutes after the first to board and select who I sit next to. As an A Lister I am receiving the best, most friendly call center service than I have recieved ever flying Delta. As an A Lister I never print a boarding pass when I check bags. I love checking in the old fashioned way..
.and I am never more than 1 or two I’m line. There are not bazillion of ELITE TRAVELLERS I am competing with. BTW… SWA gave us Prioroty pass lounge access this year for free. I enjoy my 2 free alcoholi drinks per segment without needing a coupon. I love 2 free bags….and unlimited changes to all of my tickets with free stand by day of. You can’t imagine how much I have saved by changing tickets when lower fares are offered. I can buy my international upgrades on other airlines with the money I save flying SWA. If the destinations line up and If you know the Southwest system… you love what they offer and how they offer it.
@Jim Thurber – awesome idea!