Delta has sold basic economy fares since 2012. United and American each will phase in the no-frills offering in this spring. But Southwest has no interest in joining the pack, CEO Gary Kelly said Thursday.
“Every other competitor, they lavish attention on elite customers and they ignore the rest and that is our biggest opportunity because we don’t ignore anybody,” he explained during carrier’s fourth-quarter earnings call on Thursday.
Unlike its legacy airline competitors, which are steadily offering more diverse and stratified product offerings, Southwest has continued to fly a fleet of entirely one-class aircraft. They also distinguish themselves from their domestic rivals by not charging fees for the first two checked bags and not charging change fees.
Kelly said that if it were to offer bare-bones fares, Southwest would have to do what United, Delta and American have done, which is charge for bags, disallow itinerary changes and have the low-end ticket holders board the flight last.
“Now that would complicate the message after 45 years of building the brand, and I think that would be a huge mistake,” he said.
Kelly made his remarks as Southwest reported record net income of $2.24 billion in 2016, besting 2015 by 2.9%.
In the fourth quarter, Southwest’s net income was $522 million, down 2.6% year-over-year as new deals with pilot and flight attendant unions coupled with a $154 million increase in fuel costs combined to push expenses up 7.1%.
The airline’s total operating revenue during the fourth quarter was $5.08 billion, up 2% from 2015 and $40 million ahead of analyst expectations, according to Seeking Alpha. The revenue increase came as Southwest grew its capacity, measured as available seat miles, by 5%, offsetting a 3.7% decline in the average passenger fare.
Originally published in Travel Weekly by /
Getting ready to plan your next trip or just interested in travel news?
Please remember to contact Destinations with Character Travel for ALL of your Disney, Universal, SeaWorld, and Orlando Area Vacations, Adventures by Disney, Cruising, Tour, and exciting vacation packages all over the world. When booking though Destinations with Character Travel, all of our Disney Services, including FastPass+ and Dining reservation services are completely FREE. Also, you will always have a DEDICATED agent, available to you 24/7 from the very first minute of planning, right up until the day you return home, to answer all of your questions and handle any of your vacation needs.
We believe no one should be denied a vacation based on needs or budget, there’s something for everyone.
- SOAR TO GREATER HEIGHTS: 2020 & 2021 VACATION PACKAGE SPECIALS NOW AVAILABLE! - September 12, 2020
- The 2020 Wizarding World of Harry Potter™ – Exclusive Vacation Package - September 10, 2020
- Savi’s Workshop Opens September 20, 2020 – Guests Can Soon Craft Their Own Lightsaber Again Inside Star Wars: Galaxy’s Edge at Disney’s Hollywood Studios - September 10, 2020