"Unforgiving ticket penalties are unique to the airline industry; other industries typically either allow changes or cancellations, or allow buyers to swap or resell tickets they can’t use. Theaters and sports teams sell non-refundable tickets, but buyers can give them to friends or sell them. Hotels, restaurants and other service providers may charge fees for no-shows, but typically give customers time to cancel, imposing penalties only within 24 hours, or perhaps after 4 p.m. on the day of arrival."
Not all airlines rely on cancellation fees. How can that be? Isn't the lure of more fee revenue too irresistible for the airlines to ignore? Aren't fees so important that they have lured more travelers to the airlines?
But wait why is Southwest Airlines the most successful air carrier in operation today?
"Steve Landes, who runs a Florida organization of travelers who commute by air between home and business, says many frequent travelers are switching to Southwest Airlines Co., which allows ticket changes without a penalty. “That $150 charge is a killer, and people avoid it. Airlines may think they are making money on it, but they must be losing money. They are sending their customers away,” Mr. Landes says.
A Southwest spokeswoman says the carrier hasn’t had to rely on penalties to manage overbooking because it takes historical patterns of customer cancellations and changes into account. She says the airlines believes it draws more customers by making it easier to change travel plans if necessary."
Recently we booked four airline tickets from Chicago to Cleveland over the Labor Day weekend. When searching fares four airlines, United, US, American and Southwest all priced their fares within $1.00 of each other. However, when you factored in the checked baggage fees charged by United, American and US it really meant that their fares were actually higher over all than Southwest.
Southwest, who has stubbornly not gone the baggage fee business model side, won our business yet again.
Why is Southwest the most successful air carrier flying today?
Read more from the Wall Street Journal article about airline cancellation fees by clicking the above link.
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