We recently bought stock in Southwest Airlines. Boy they just do things right. Avoiding baggage fees. Lower costs. And most of all its the people who work for them. Just fly with some one else and you will know what I mean. The New York Times article from last week tries it best to balance and find fault with the airline. But even the problems don't seem like they are insurmountable.
My favorite quote:
But here, too, Southwest sensed an opportunity to showcase its difference. While baggage fees generated roughly $1.7 billion for the industry in the first half of the year, Southwest drew the line. It made its “Bags Fly Free” policy a centerpiece of its advertising and marketing campaign.
“A lot of people have been trying to pickpocket and nickel-and-dime their customers,” says Kevin Krone, the company’s head of marketing. “We don’t think it’s right.”
The policy turned out to be a good business move.
Southwest’s revenue rose by $1.6 billion in the first nine months of 2010, compared with that period in 2007, even as its capacity declined by 1 percent. Part of that growth in sales, Southwest believes, came from new customers fleeing bag fees. Mr. Kelly calls his rivals’ approach “a gift.”
The policy yielded another advantage. It allowed Southwest to subtly shift the focus away from its fares. Although it still offers low fares to many destinations, Southwest doesn’t always have the lowest fares every day on every flight, says Bob McAdoo, an airline analyst at Avondale Partners.
Click the above link to read more.
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