Basic economy fares may be sweeping through the industry, but one airline says it’s staying out.
Southwest CEO Gary Kelly said today that his carrier has no interest in dividing its cabins into multiple levels of service. “What you have at Southwest is a very strong brand position in customers’ minds,” Kelly said on a fourth-quarter earnings call, according to USA Today. “The whole free bags and no change fees becomes a very powerful component out of all that. So we don’t feel like we need [to change anything].”
“Every other competitor, they lavish attention on elite customers and ignore the rest,” Kelly said. “That is our biggest opportunity because we don’t ignore anybody.”
Kelly’s comments come as several major carriers are implementing so-called “basic economy” fares. While the details vary from carrier to carrier, these fares generally cover little more than a seat on the plane, mimicking the stripped-down service (and lower prices) of ultra-low-cost-carriers.
United’s version of basic economy, which American copied almost directly, is particularly spartan—our own Tim Winship dubbed them “nasty fares.” It includes only one personal item and prohibits ticket-holders from using the overhead bins. Delta’s take on basic economy doesn’t restrict carry-ons.
Basic economy passengers aren’t prohibited from using amenities included in other economy fares, such as inflight entertainment. But, in most cases they board last, can’t change their reservations or fly standby, aren’t eligible for upgrades (United basic economy passengers aren’t eligible for miles, either), and can’t choose their seats in advance.
Of course, passengers have to choose these fares, and those who do are presumably willing to make sacrifices in the name of savings. Still, this erosion in service is unsettling for some, and represents the industry’s fixation on moving toward a la carte pricing models. While cheaper on paper, this doesn’t necessarily add up for the consumer, who now pays a premium for “perks” such as choosing where to sit.
Kelly says offering that choice isn’t worth it. “Any time we contemplate offering customers a choice, we debate that heavily because complexity drives confusion and it clouds the brand.”