Did you feel that? Did the earth just move below our feet?
It’s true: Southwest, struggling to meet its 2016 revenue goals, is considering adding ancillary fees to bring in additional cash. according to a USA Today report.
The good news? Bag fees are off the table.
“We have a unique and beloved position in the industry with this approach,” CEO Gary Kelly said of his airlines bag policy. “We would be foolish to squander it.” Kelly said he would keep any potential fees under wraps for now.
Southwest, of course, does charge for certain things, so it’s not as if adding more fees would be completely out of character. CFO Tammy Romo told USA Today that charging for EarlyBird Check-In and Business Select has worked well for the airline.
This news comes as Southwest acknowledged that competition from ultra-low-cost carriers is growing and becoming a factor in Southwest’s business. “The fare environment remains challenging,” Romo said on a call with investors. That’s another way of saying fares are down, and for Southwest, which provides a higher level of service compared to ultra-low-cost airline, that puts a pinch on the bottom line.
CEO Kelly said this not surprising (“I don’t think it’s shocking where we are at all,” he said), but Southwest is clearly feeling some pressure to keep its revenue stable.
And that pressure, inevitably, invites talk of fees. Now we wait to see if, when, and how that talk becomes reality.
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