December 15, 2012 in Business

Southwest Airlines to add no-show fee

Early check-in, overweight bags also will cost more, company says
Associated Press
 

DALLAS – Southwest Airlines Co. will start charging a no-show fee for passengers who fail to cancel tickets before their flights.

The company also said Friday that fees on early check-in and overweight bags are going up. And it repeated a longtime goal for boosting profits that could only be met next year if it doubles earnings.

Southwest brags that it doesn’t charge ticket-change fees, and it lets customers apply the price of an unused ticket to a later trip.

But customers who take advantage of those policies are leaving too many seats empty, the airline says.

So beginning sometime next year, Southwest will charge a no-show fee on its cheapest fares, known as “Wanna Get Away” tickets. Neither the date nor the amount of the fee has been set.

CEO Gary Kelly said the change will bring Southwest closer in line with policies at other airlines and won’t alienate customers.

The airline expects to raise $100 million next year from the new fee and increases in current fees, part of a plan to boost revenue by $1.3 billion in 2013 over 2012. Southwest is on pace for revenue this year of about $17.5 billion based on figures from 2011 and the first nine months of 2012.

Southwest has long had a goal of boosting return on investment by 15 percent per year but hasn’t been able to do it.

In recent years, Southwest has bombarded TV viewers with “bags fly free” commercials to highlight that it doesn’t charge customers for their first two checked bags or for changing a reservation – both fees are standard on most other major U.S. airlines. Southwest executives said they’re not thinking about imposing those fees, but would announce other changes today.

Executives said the fee for overweight bags will rise to $100 from $50, and early check-in, which helps move passengers toward the front of the boarding line and assure space for their bag in the overhead bins, will go to $12.50 from $10.

Southwest’s AirTran Airways subsidiary will raise its fees for checking bags to $25 for the first bag, up from $20, and to $35 for the second, up from $25, said AirTran President Robert Jordan. Southwest has promised to end AirTran’s bag fees when it folds AirTran into the Southwest fleet over the next few years.

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