As the U.S. Big 3 airlines all move into offering 'basic economy' fares to compete with the ultra low-costs, No. 4 Southwest is saying 'No.'
Basic Economy generally means a lower fare, no pre-assigned seat, limited or no access to overhead bins and being last to board.
Gary Kelly, Southwest CEO, told an investor meeting last week that such a plan would undermine what the airline has trained its customers to expect: “What you have at Southwest is a very strong brand position in customers’ minds that we stand for friendliness, reliability and low fares. The whole free bags and no change fees becomes a very powerful component out of all that. So we don’t feel like we need it.”
He also said that the only way to create basic would be to take away something passengers already have, and “That complicates the message. I think that would be a huge mistake.” Southwest has had 44 consecutive years of profits, so it has reason to be content, while others are seeking new revenues. United, for example, expects basic to earn it $250 million this year.
Another Kelly point: Southwest has the same seats on the same planes for everyone: “Every other competitor, they lavish attention on elite customers and ignore the rest. That is our biggest opportunity because we don’t ignore anybody,” Kelly said.
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