Southwest has announced it will add nine nonstop round-trip flights to its route network in November, a pre-holiday boost that comes as other airlines are cutting capacity by as much as 12 percent. The airline will also be raising fares by $5 to $10 to cover the ever-increasing cost of fuel, but this increase only applies to travel between November 2 and January 9.
Wait a minute—November 2 and January 9? Isn't that the holiday season, otherwise known as the busiest travel period of the year? You bet. And if the comments on Southwest's blog are any indication, fans of the airline aren't exactly thrilled with the idea. It's a small sample size, to be sure, but customers are complaining of extremely high fares and sold-out Thanksgiving flights (already!).
I think there are a few factors at play here. First, no matter how clever or lucky Southwest's fuel hedges have been, the airline still needs to deal with the astronomical cost of oil. Southwest is choosing to avoid the fees other airlines have added, opting instead for periodic fare increases. As Southwest spokeswoman Whitney Eichinger puts it, "We would rather take these modest fare increases instead of instituting those fees and other charges."
Another factor is demand. Southwest is extremely popular right now, in part because it has stayed out of the new-fee fray (a point of pride it has not allowed to go unnoticed), and it's possible more and more people are flocking to the airline. Increased competition for seats will mean planes fill up faster, giving Southwest less incentive to offer low fares. Why sell a seat for $89 when you can fill it for $129?
More than anything, though, Southwest seems to be battling its own reputation. The carrier has gone to great lengths to position itself as a low-fare, no-hassles airline—the antidote to legacy-line misery—but the reality of today's economy is that no airline can avoid decisions that will irritate its customers. In this case, that means raising fares for the holiday season, something no passenger will be happy about.
So as fuel costs continue to rise, customers will have to realize that while Southwest may not nickel-and-dime them like other carriers, it is still in the business of flying. And these days, business is rough.