Before the pandemic Southwest Airlines was profitable for 47 straight years – through the malaise of the 1970s, deregulation, the aftermath of 9/11 and the Great Recession. Other airlines went through bankruptcy (or several). Southwest was prized by the market as a well-run and well-loved company and brand.
The luster is now off with investors, and management is struggling for their jobs. They’re planning assigned seats, premium seats and redeyes. There’s been talk of basic economy. In other words, they’re looking to become like all other airlines – which are valued at much lower multiples. It’s a strange recipe to copy JetBlue in the name of financial success.
It seems, though, that the broader consumer public is starting to realize that Southwest Airlines isn’t cheaper than flying other airlines most of the time – at least in terms of airfare.
I can tell you quickly why Southwest Airlines is struggling.
Nonstop from San Antonio to Phoenix in August.
Southwest: $278 a person.
American: $276 a person.If you're going to be discount airline, you have to offer a discount.
— Michael Girdley (@girdley) July 26, 2024
Southwest hasn’t been a low fare airline in a long time and they are no longer a low cost airline. But in this example they are actually offering the better fare. For $2 more Southwest includes 2 checked bags. American would charge for both – and charges more for wifi. And that’s assuming the American fare isn’t basic economy. All Southwest flights are changeable and their credits do not expire.
The airline does have a problem now that its costs have grown. However the reason higher costs are such a problem is two-fold:
- Southwest hasn’t had the flights people wanted to buy. The airline flies largely domestically, with some close-in international. They haven’t been able to take advantage of the boom in long haul international. They don’t even have partners to sell flights on that would help here.
The airline only flies Boeing 737s. They can’t take advantage of demand from small cities. There’s been too much domestic capacity, and that’s hurt domestic-focused American Airlines. But American Airlines has regional jets that connect passengers out of small towns and fill up larger planes, while Southwest Airlines can’t.
- Southwest hasn’t had the product people wanted to buy. The past couple of years air travel has seen significant growth in premium demand. But Southwest doesn’t have extra legroom seats or first class. They don’t have lounges. Their business model was built to be efficient and egalitarian.
Historically Southwest Airlines hasn’t wanted customers to compare price side by side since – as the tweet above appears – they usually aren’t cheaper and all the customer sees is price, not total trip cost. You aren’t comparing like-to-like since bags fly free on Southwest.
Government regulation may change that if DOT rules go into effect (unless lawsuits are ultimately successful) requiring fare displays inclusive of various fees and that will make Southwest look better. No surprise they are experimenting with side by side displays on Google Flights.
New federal rules will make Southwest look cheaper at the same price. That’s an underrated ace in the airline’s hole and a reason they’ll want their fares to show wherever people search for airfare. There’s no more need to hide the comparison, when people see only price.
FAA rule already halted via injunction. Also not sure how FAA rules, even if they are allowed to go forward which is doubtful, would account for people that don’t pay bag or seat fees when displaying fares. Also not sure Google flights would have to show the fully loaded fare since they have no way of knowing the actual cost of bags or seats
Southwest is often more expensive than $2. Many times much more expensive. I do like their flexibility with ticketing when one decides to cancel a trip.
I used to avoid Southwest like the plague but now I will consider them. I still rarely fly them.
People know what SW is all about. Want fancy nonsense fly others. Want to pay more for everything, fly others.
… and no cost for taking an aisle or window seat.
1) As long as I have been flying, Southwest has generally been more expensive in economy than other airlines. It doesn’t help that I have flown out of Atlanta and NYC almost all of my life, but still, they never have been a value
2) Bags fly free are less of a draw when the legacy airlines have been pushing credit cards that include free bags for the past 15-20 years.
3) All airlines basically offer 100% changeable flights nowadays
Over the years there have been fewer and fewer reasons to fly Southwest, which shows in their results
I moved from AA to WN back in the 2000s. AA service/planes became less appealing and more expensive for family travel. While AA did have assigned seating, if I wanted to change seats even in the same class, I paid for the privilege.
WN has been great for me since travel changed from just business and occasional flights with just my wife to family travel primarily. We almost always booked far enough ahead of time to get the lowest or second to lowest fare category. This was a huge cost advantage. If we needed to change the itinerary, all I had to worry about was the increased cost of whatever seats were available at the time. No cancelation or change fees. I didn’t have baggage fees with WN, where AA (or any other carrier) would have eaten my lunch and supper with fees. The bonus was that with small children, we got boarded before the “B” group. Even now with teenagers, I do the reasonable (not so reasonable now) Early Bird or we just sat further back in the plane.
We’ll see what the assigned seating change will bring. I’m fine with it if they allow you to pick or move seats without a tidy fee, but I have a feeling they are betting on collecting a nice sum for that privilege.
The best thing about Southwest is the nonstop destinations it can offer because of its point-to-point operations. You don’t have to go through a hub. Upgrades are nice, but I often get a regional jet, so there are few upgrades. There are also more seats on Southwest than regional, more often 3x the space available.
Southwest’s costs are pegged to Delta, UA, and AA with awarding contracts to pilots and FAs at similar compensation rates. All airlines are subject to paying employees at a market rates, or losing them. While the cost may not be cheaper, Southwest shines for me with their no expiration cancellation fees and ease of interacting with (I don’t have deal with trip credits vs flight credits). Just about every airline offers a credit card that provides a free bag so that is not a differentiator.
Economy seats are a commodity product across US airlines. Most people will buy the seat that offers the flight times needed to the destination desired. As was shown, costs are all relatively the same across the big 4 US airlines.
SW is often more expensive at the time of purchase. For it to be a better value, you have to value the change flexibility and free bags–free carry-on and checked. I highly value the flexibility, so paying an extra 20% or so worth it.
Recently booked a flight BNA-RDU. First class DL ticket was only $37 more than the cheapest SW fare. Recently I flew this route on SW and had A2 position. Ended up in row 8 with all the pre-boarders. Even without the free drinks having an assigned seat and guaranteed overhead is worth $37.
I have a trip in October: Chicago – Cancun. I need one bag, want to select an aisle seat, and want flexibility to cancel/change. Southwest is $107 more than the cheapest option, $43 more than the next most expensive option. And has the least desirable flight time (I want to get there early). This is the norm, not the exception. I can’t understand why people pay more to fly on SW?
SWA: 11:10am, $213
F9: 6am, $106 w/bag & seat ($77 base)
NK: 6am, $145 w/bag & seat ($88 base)
AA: 8:35am & 9:55am, $158 ($138 basic eco.)
UN: 10:46am, $170 ($125 basic eco.)
I will fly Southwest occasionally (mostly to and from Phoenix) but I have multiple reasons why I usually choose a different option:
1) I fly carryon only, so the free checked bags are worth $0 to me.
2) I do not like the cattle call boarding.
3) I like to fly “red eye” flights when I travel from the East Coast to the East Coast and Southwest does not offer them.
4) the free changes and credits that don’t expire are nice, but I very rarely have ever needed to change a flight and I fly enough that I can reuse other airline’s credits on a timely manner if it comes to that. So this feature too is not really worth much to me.
All that said, I’ve had good experiences flying with them overall, and if the price and schedule is right I won’t hesitate to fly with them again. These changes make that even more likely…
I compared the seat pitch in Southwest to the big three USA airlines. Sometimes it is comparable but sometimes it is more than that of the big three. For me, an extra inch or two of seat pitch is worth paying a bit more. Add that in with the other benefits and Southwest is competitive.
I love Southwest. I dislike credit cards, so the free bags are a nice option. I like sitting on an aisle seat in the back of the plane and I rarely have trouble securing this seat under the cattle call model, though on other airlines I’d have to pay for the privilege of picking out any seat. They have the easiest cancellation policies to deal with and have fixed the occasional problem without a lot of fuss. I also like that they tend to decorate the gates for holidays.
In short, I would often rather pay slightly more for a model that feels like the fees are upfront and the checkout process isn’t annoying (the Frontier website makes me want to scream) . With Southwest I know I will have a reasonably good experience and generally get what I pay for.
One can find lots of anecdotal information showing SWA more or less expensive to pair cities. For me the major advantages are a good on-time record, lots of non-stops to choose from, no bag fees, and no-cost credits for flight changes or cancellations. When two of us are traveling to Puerto Rico we can fly non-stop and check 4 bags. With other airlines there are not many non-stops from our city which lowers “lost luggage” issues. Even a credit card that exempts one checked bag, each 2nd bag fee runs $60 to $80 nowaways. Also a good policy for checking various sporting goods bags as a regular checked bag. So, 2 checked bags, each way at $70/bag adds up to $280 for two people. No additional seat charges for now.
remember your BAGS FLY FREE. but do they really when the cost is hidden in the fare! thats why it cost more that most other cheap airlines even with checking bags
WN has long been anything but a low-cost carrier.
I fly frequently and live in a UA hub. UA almost always has better fares (not basic economy either) than WN. If you fly a legacy enough to gain status, it is a no brainer to avoid WN. I get two 70 lb. bags on every UA trip for free, and that includes one other person on the same booking as well. I get economy plus seats included so more legroom than WN and no cost to select them. To top it off, UA almost always has more frequencies for every destination than WN so schedule choices are better and IRROPS recovery also has more and better choices.
With all that, why would I take WN?
Southwest is Southwest, and while it is TRUE that WN doesn’t charge of bags, guess what? Neither does Alaska, American, Delta, United, et. al. ***IF*** you bought the tickets with a co-branded credit card, or have elite status, etc., etc. In other words, for many people, not charging for bags is no longer the “advantage” it used to be. And for those people *with* a co-branded card or with status, there is also the benefits of extra legroom or FC or access to a lounge or…or…or…
I will be flying WN in early December to New Orleans r/t from the SF Bay Area, but only because I think it’s stupid to route myself via SEA, and because I can’t fly from MSY to SFO on AS without an overnight stay in Seattle, which I think is REALLY stupid!
SW isn’t like Jet Blue. When JB first came out, they had tv’s in the seat backs. I stopped flying them when I had to change a flight, OAK – LAX and charged me $150 for the change…if I had bought the ticket without the change it would have been cheaper — but they charged me the ticket increase + $150!! I was livid then, and won’t fly on them as a result. People say SW is a cattle car…but honestly, I find it worse when all of “Group #” boards! All the jockeying, people in subsequent groups not moving out of the way…it is chaos. Southwest just needed to fix the cheaters. Sadly, not doing that will destroy a charasmatic company. There is no way they can add leg room without taking it away from others. And what they add for ‘premium’ may be inferior to other airlines with bigger planes. Sadly, I can’t fathom this working. And it makes me sad.
The problem is that Southwest stood still with regards to product, marketing, pricing and technology while air transportation evolved!
LCC in Europe have a highly tailored product, allowing different passengers to buy exactly what they want and pay what it’s worth to THEM: with or without checked bags or carry on, assigned seats front/back, more/less legroom, window/aisle, priority boarding, lounge access or fast track security, flexible or not! Despite all the hate thrown at EU LCC – passengers can get what they want and the airlines maximize revenue… win-win!
At Southwest, everybody gets free bags and flexible fares, but you cant get assigned seats, never mind more legroom or lounge access. So, the people who don’t want to pay for bags or insist on assigned seats will book elsewhere – and Southwest doesn’t make enough money of the people who actually want bags. And they probably couldn’t do many of these things, because of IT limitations…
They should hire some folks from Ryan Air or Vueling to bring their business model & IT into this century…
Southwest is currently one of the best, if not the est airline out there. It’s clear you’ve got it in for them for obvious reasons. But those reasons are just business. Welcome to life I’m the jungle. AA is one of the worst airlines, if not the worst. They taunt and even hate their customers. Southwest actually still cares. If SW starts making these changes to become more like other carriers, it will be the beginning of the end.
I’ve flown WN since deregulation, and it has been our family’s airline for generations. I love open seating, the nice flight attendants (for the most part), the extra legroom, fully exchangeable tickets and the casual nature of the airline. My Priority card gives me a few chances to board early, too. It’s sad that they’re moving to assigned seating, but I’m sure we’ll get over it. The rest of the Company will still be there.
Southwest has as always bern different.
They ard not for look at for last minute travel. Fares go bbn up once underc2 weeks.
Southwest isusually the fare driver in Dale’s around 4 months- 6 weekd before glightd.
Covid hurt them and delays hurt them.
Thry limited flights to lijr 1 stop and 1 layover max. This limited routes and schedules
Other airlines with hub/ spoke can easily Correct errors when flight delays occur
They are more maxed out if schedulrdelayd happen.
@Patrick “and no cost for taking an aisle or window seat.” You are uninformed or fibbing. I pulled up a random SAT-PHX flight. There were more than 30 available aisle or window seats you could reserve at no additional cost (yes in the back half of the plane). What are your odds of getting one if you don’t pay extra on WN?
WN has one-third of my home airport’s passengers. Yet, or maybe because, they are more expensive than the legacies more than half the time. And, they often require you to fly very early or late if they are cheaper. I have a good friend who loves them and regularly flies for business. Maybe I’m missing something. We’ll see when they implement the much needed assigned seating and an upper class.
Southwest does offer more legroom seats. It’s just throughout the plane. Southwest offers 32 inch legroom vs 30 for the legacies. That’s why I fly Southwest today.
Southwest used to have some price comparison ads – highlighting that bags fly free. It sounds like they just need to expand all the other unique features of flying Southwest that are not reflected in the price. Fares are changeable and credits don’t expire ever, no seat assignment fees (for now), credits can be transfered to another person – try that with the majors who have a use it or lose it within a year of of booking and are individual credits.
That DL First Class fare that was $37 more. What a great find, but that is not always the case. Also was that refundable or non-refundable. I’m going to guess it was non-refundable.
The tweet is not even a close comparison. No luggage fees which relates is less people lugging their liege which most can’t even lift! In dislike parking others luggage away. It’s heavy and in don’t want to get hurt. For this reason I require my elderly mother to check in her luggage which makes her life easier. Having people jam their luggage into compartments that fit is always frustrating. They should weigh carryon bags! I don’t understand why ALL airlines don’t allow at minimum one check in. It should be mandatory by law. Second, the cheapest ticket usually posted by other airlines is deceiving. You get horrible seating!!’ You don’t get decent seating. SW one got decent seating orc at least you had a better shot at it. Other airlines i not equal they hold out half the plane seats to the ones that have a bigger wallet. Interestingly I’ve find that SW seating is faster without assigned seating. I fly often.
So, I live on the Fort Worth side of the Metroplex, and besides hating the cattle call seating, my biggest issue with flying them is that they only fly out of Love Field. Access to that airport, in general, is horrible. The incoming roads are falling apart and generally always backed up, compared to DFW, which has some of the easiest access by car of almost any airport.
As for why the general public is souring, I wonder if part of it is due to their frequent flyer program. Everyone on this blog are probably a lot more points sophisticated than the average consumer. Looking at it from the perspective of an average consumer, United, Delta, and AA all offer the dream of sunkissed islands like the Maldives and Paris in the spring, flying on a lay-flat seat, drinking champagne, and eating caviar. You really can’t get with Rapid Rewards.
If you want to see the future for Southwest, look at WestJet in Canada. Initially, they were the Canadian copy of Southwest. 737s only, flying into smaller airports, and a frequent flyer program for them only. Now, they have a variety of plane types and business classes, fly internationally, and have interline mileage partnerships with Delta and other carriers. While still maintaining the friendliness and some of the worst features of the legacy carriers.
No mention of the Companion Pass, which cuts ticket prices (dollars or points) in half when my wife and I travel together?!