SWA "Bags fly free campaign"...is it working?
 

So now that SWA has estblished themselves as the only remaining carrier to carge for bags, seems as though they are really starting to advertise that fact. I think it's great and their commercials make me laugh, as opposed to Alaskas pathetic attempt at humor. My question is this:

Is SWA generating more passengers, and the resulting revenue due to the fact that they don't charge for bags, or are they losing out on millions of dollars that bag charges generate?

How do their fares compare to other carriers that charge for baggage? The "bag" fee may be embedded in the airfare.

Ok so I am a bit biased as you can tell... but as far as the bag fee goes, most people don't want to crack their wallets open at the ticket counter after already paying for their ticket! Most people want to know what it is going to cost them to go from point A to point B. If the fee is in the fare then so be it. At least there is no surprise when you get to the airport. You know what you paid and that's it.
I have never thought it was a good idea to add a fee for bags. But hey I am just one opinion.

WNrider

There are two primary ways to be profitable: to cut costs to the bone and charge for every little thing; or to provide a good product at a price corresponding to its actual value. Having worked for companies that have focused on each of these to the exclusion of the other, I vastly prefer working for and/or patronizing the latter.

I don't know which kind will win the race, but I know where my app will go when the day comes.

The writing is on the wall. People want Ala cart pricing. They do not want to pay for services that they do not use. They will buy the cheapest ticket, then add on a bag, window seat, web service, exc... Yes, they are ****ed when they have to pay $15 for a bag, but when they travel next month, it's back to the cheapest fare.

Really? you can not say P'd. WOW:rolleyes:

Have to agree with the Green Nanner on this one. People will search for hours to save 50 cents on the fare, then spend like crazy the day of travel. Had 100 bags in the hold on a recent flight. That's $2000 additional revenue in one flight. Add in cocktails, a meal and a movie, internet connection to send Aunt Bee an email and the ticket price begins to look like the cover charge at a club.

I think WN is leaving $$ at the table, but Shhhhh, let's not tell 'em!

As a frequent traveler platinum, etc. I don't pay bag fees. I like the commercials, beats everyone elses.

As an aviation consumer (we are home based and can book our own tickets), the issue with SW for me is the lack of an assigned seat. I find that SW isn't always the lowest fare in the 3-5 day before travel window.

I'm a SWA pilot and I'd agree. We are rarely the cheapest in the short term. However I don't know that you can extrapolate that to us not having the cheapest fares. That can be a function of how many seats we have remaining to sell on that particular flight.

Remember that we do allow you to board early, thereby picking any seat you want, for a small fee. ;-)

I've heard Gary Kelly talk about this very subject and he strongly believes that it's working. There is no reliable metric to measure what a customer would have decided, only what they actually did decide. So it's hard to say that charging for bags is really making money for the legacy carriers.

As a frequent flyer- I pack light and use the overheads. Yeah, I’m guilty of jockeying for position. I’m lifetime Silver on DL and hoping for annual Silver this year on CO. I still love WN and fly them when it fits. Sometimes they are the least expensive, sometimes not. I do think ala carte is a pain in the butt, however I understand internet pricing is driving it. Everybody "homes in" on that first published number. That said, I have my preferences and needs when I book my flights, in rough order-

Price- driven by my business cost
Schedule - driven by what I need to do
Seating- I'm not sitting in a middle seat for 4-5 hours if I don't have to- driven by comfort
Preferred Carrier- based on ease of use (primarily boarding preference to get overhead space) driven by what I want or expect for convenience or service
Frequent Flyer Benefits - driven by what I might accrue long term

The bags are kind of a non-issue. How does WN win? Fun airline to fly on, excellent in-flight service, and perhaps most importantly, they are not trying to be low bidder on Orbitz, Travelocity, etc.

The question is what does it actually cost to operate a flight profitably? With the adoption of internet pricing, most customers select their flight according to cost of ticket. Convienence and service are well down the priority list. The result is it becomes necessary for the carrier to list the ticket price well below the cost to operate. Carriers have figured out that the area that will generate the profit is in the cafeteria of add on fees.

It's all a function of the switch to internet booking.

SWA does not participate in the internet travel booking sites such as Expedia or Travelocity. So, they are not compared as apples to apples. Rather, they make you go to their website in order to book. Many people will not bother to then compare the "complete" deal at SWA reservations with the "complete" deal at a legacy carrier. SWA is no cheaper. They are just better at making people think that they are cheaper. The baggage advertisment is a good example. Perception is everything.

Remlap, I definitely agree that SWA is the best at making the general public think their prices are the cheapest. However, nothing is for free and most reasonable people know that.

The question I have is, I can't think of any other airline that advertises on TV other than Southwest. I've seen the Delta credit card commercial -- but it's not an airline commercial. So I wonder, how much are they spending on this ad campaign compared to the increase in revenue?

I've been watching revenue comps with other companies closely, and it's really hard to tell if not charging for bags is helping or hurting us. It seems as if last quarter passengers are starting to react positively to the "no bag fee" campaign, but the revenue numbers aren't conclusive yet.

I agree with this statement thoroughly. My employer largely emulates the Southwest business model--at least it did for the first 5 years. We charge for the second bag underneath (so not too bad yet-you get one underneath for free). It has harmed our turn times. We shoot for 40 minutes, but the A320 is tough at 40 mintues with 150 seats and, with regularly high loads, we blow this often because of the bag fees! Customers have dead relatives in some of these roll aboards. Constant boarding delays occur while folks manage these things into overheads.

Bag fees make money, but what about when a customers luggage does not arrive or is lost? This happened to my parents on another carrier. They were angry. They paid extra to have their bags delayed! In the future, they'll avoid that carrier. There are consequences to this charging scheme. Good for LUV!

Due to larger and larger bags being brought on as carry ons, the FAA and the airlines have been looking for away to police this. The little box at the gate allows to little control over billing for additional bags. Plans I have heard being thrown around are to have it done at Securty check points, so that if the bag is too big you must go back to the counter, check, and pay for it. The gate check "because I'm stupid" loop hole will be closed.

Maybe we should charge nothing for checked bags, and charge for roll-aboards instead!

That would be great! People have figured out if they gate check the bag, they don't pay the fee. I was sitting in the last row the other day and no room for this guys bag, so the checked it. He loudly asked "am I gonna get charged" , FA said no; and everyone who paid for a checked bag started grumbling

The WN bags fly free scratchin' and rappin' commercial is possibly the cheesiest most annoying thing in television history. I am actually embarrassed for WN when I see it. It ranks right up there with "Head-On, apply directly to the forehead", "Head-On, apply directly to the forehead", "Head-On, apply directly to the forehead", "Head-On, apply directly to the forehead". I would never buy that product because the commercial is so dam_ed annoying.

PIPE

Pipe ...

Annoying commercials sell sell sell. Even you remember Head-On's commercial.

The rapping Southwest commercial plays exactly into the type of passenger Southwest is looking for. It is a very smart ad campaign. But, for now, nobody knows for sure if it is a success.

I knew when I posted that someone would immediately make the point that I remembered the Head On commercial, therefore it was effective. That's why I went on to say that I would not, nor have I, ever purchased Head On, expressly because of the commercial.

I could give you a very long list of memorable, irritating commercials for things that everyone remembers - but nobody buys. Real genius would have been a Billy Mays commercial for WN. Oh well.

PIPE

Umm, what type of passenger is that KC10 FATboy? (just curious)

Probably the same type of guy sitting next to me today on my commute to work.

Unshaven, smelly, wearing a Jack Daniel's t-shirt with a wad of dip in his lip. He asked me insanely stupid pilot questions for 2 hours, stopping only to spit into a thermos.

I was riding Delta out of ATL.

Let's not generalize here KC10. Thanks to orbitz and the like, every airline carries America's garbage now, not just SWA. Talk to your management about raising fares to help better the caliber of your passengers and tell me how that goes.

FWIW, I see more sweatpants and bedroom shoes on the legacy carriers than the LCCs. These type of people are so "classy," that they demand a seat assignment.

Here is a reliable metric for you:
Profitable Yes or NO

I "LUV" how you guys are not willing to second guess your CEO, personally I think this is a huge blunder and will most likely cost him his job in the next 24 months.

How is it that Alaska posts 80+ million profit, jetBlue and Airtran significantly in the black. If this campaign was working WN would be flying with 100% load factor and have huge pricing power. The opposite affect is being seen, WN recently announced the 25, 50, 75 discount fares which is an indication that demand is not as strong as the local "Luv" pilots are hoping for. WN posted a loss last quarter after fuel expenses and their forecast was more of a warning than anything.

You got a problem with Jack Daniels? It's the nectar of the gods... at least on football Saturday in Knoxville. :D

Freight -

There is more going on at SWA then you are posting. Fuel hedge losses are huge at SWA. Those will take up to five years to recover from those. We are also second guessing our CEO. If you were able to view some of our private forums you would see that.

One thing I might have missed from all of the postings. Some routes that SWA does fly with competitors are not the cheapest. So Joe Smoe buys a ticket from Brand Y which saves Joe about $20 - $50 a ticket. But Brand Y has the bag fees. Joe Smoe shows up at the airport. Joe Smoe realizes he has to check in some bags at the ticket counter. Joe Smoe also wants to fly from point A to point B now, now, now. So he is willing to pay for bag fees no matter what. So in the end Joe Smoe actually pays for more for his ticket than at SWA.

Brand Y is banking on this for additional income. I believe this will work only in the short term, not long term. Consumers will get smarter, later on.

Whoa whoa whoa ... hold the bus. You guys SERIOUSLY took my statement and injected your own thoughts there.

The type of passenger I was thinking of is one that would be energized by a cool diddy ... the young, the hip, likes to have a goodtime/enjoys life and freedom, the fashionably beautiful people. Ok, so I am joking with the last one.

It is a brilliant campaign. You see happy employees, happy about their jobs, happy that they aren't nickel and diming the customer. Not only do YOU have the freedom to move about the country, so do YOUR BAGS! It is an amazingly simple concept and the little diddies and raps are perfect for the targeted audiences and makes them feel good and helps you remember the point of the ad campaign.

If you think that this type of commercial plays to all audiences, you guys are smoking crack. This is why there are several variations of the same ad campaign and as such, I am almost positive that certain markets would only see some of those commercials, not all.

This reminds of a commercial Southwest used to have. It was the DING, you're free to move about the country line of commercials. I have tried finding the commercial on SWA's website and youtube, but they have since moved on. Anyhow, the commercial had a farmer in Kansas, he is on a tractor and he's cutting down corn. And as he goes a little further, theres a $59 sign in the cornfield floating there, or something to the effect.

That commercial was not for the farming community? Why? Because the farmer was cutting down corn. You don't cut down corn. You harvest it with a combine .. not cut it down with a tractor.

I guess its something that the city folk or ad executives didn't "think" about that when they designed the commercial -- or perhaps they did and wanted to confuse people, who knows. Because to them, the commercial was about freedom and the ability to go anywhere in the US for $59. The ad worked, but probably raised some eyebrows in the midwest.

I guess the difference is that SWA doesn't care who's in the back while the Legacys want suit/slip wearing customers who pay more. How's that workin' for you bottom line? American? United? Delta? CAL?

I've flown you all as a revenue pax. Why don't you try a customer service approach instead of pi$$ed off crews and fees out the back side?

PS- I know it's not totally YOUR decision and needs to start from the top.

PSS- If you are so angry about what you make for what you do while stewing about what the CEO makes, then you need to become a CEO. Meanwhile, don't make the customer suffer your discontent.

Airlines that charge for bags collectively have thousands of furloughed pilots

SWA that doesn't charge for bags has no furloughs.

From my perspective it is working just fine.

I Fly SWA
 

I disagree with the fact that people will nickel and dime an airfare from ABC to XYZ as the sole determination for choice. Sure, a small percentage will but the majority look for schedule convenience, competitive fares and of course, favorite carriers all else being fairly close.

When I was stateside, I almost always flew Southwest even though they were not always the cheapest. Other than transcons or international flights, I just want to get on the aircraft, sit down and be carried from ABC to XYZ on time. I don't want to pay an extra $15.00 or 25.00 for each bag (especially golf clubs); pay for a sandwich and a soda;a headset and even a newspaper. Who the hell needs it on an hour or an hour and a half flight.

Just one opinion. BTW, Pelican, spellchecks are available at most retail stores or with proof of three flights within the past 90 days.

G'Day Mates:)

Dang Spanky, where did this angst come from? Nobody here was saying anything negative until your outburst. It is very easy to get cocky when times are good. But as history has shown, even the biggest and best can falter.

I like Southwest as they have proven to be a successful airline. You can't argue that. However, lets take a closer look.

Southwest is a domestic airline. They fly high frequency, high demand routes. They clip the low hanging fruit from the legacy's and as such, have consistently taken domestic market share.

Lets call a spade a spade. Legacy airlines are international airlines and everything about them is setup for that. Legacy's individually fly to more countries than Southwest flies to domestic locations. More over, they are one mode of the lifeblood of our country's transportation and delivery system, as they serve smaller markets that Southwest could never touch due to lower demand, lower frequency. There are entire states that Southwest doesn't even serve ... yet. :)

I work for a legacy, and yes my pay could be better but really I'm not that far off the pay scale of Southwest. In my experience, except for a rather very small few, employee morale is exceptionally high all things considered --- the pilots lost over 50% of pay and all of their retirement. And when I open the door and say goodbye to the passengers, they are very happy, saying thank yous and kudos. The only time I get a bad look or snicker from someone is when we're delayed almost always due to weather or ATC issues well beyond our control.

There are some very bad situations out there. This industry has changed dramatically over the past decade and it isn't going back. There are plenty of employee groups out there who pretty much are entitled to be bitter as they've been screwed royally. I hope a startup airline isn't allowed to move in, undercut everyone due to cheap wages and subsidization through fuel hedging or some other venture, and do the same to Southwest as Southwest was able to do to the legacies.

Ironically, as the legacy's are morphing more into a leaner machine that is like Southwest, Southwest is also becoming more like a legacy. We hear the grumbles from the employees who have access to internal company forums. We saw it play out here on APC when the pilot's TA was voted down, and the senior pilots were not happy with the junior pilots. We see Southwest holding on the ramp because the gate is blocked. We see you in line at Laguardia burning fuel just like us and so on.

Now that the fuel hedging profits are gone and everyone is back to a level playing field, the future looks very interesting and I suspect we will see a lot of fare wars as in the latest "no bag fee" campaign. Southwest built a powerhouse of a domestic airline by the use of brilliant fuel hedging, running a good airline, and convincing the passenger that they are always the cheapest -- but the latter isn't always the case. Passenger habits drove the legacies into alacart pricing and services.

Is Southwest's ad campagin working, probably.

I had to bring this back because the commercials they've been running all day during my NFL games have had me laughing like crazy lol. Humor always works! Seriously I bet I've seen that commercial a dozen times between all the games on the NFL package and every time I'm laughing crazy!