Southwest to add fourth fare category

DALLAS – Southwest Airlines will add a fourth fare category as part of changes designed to attract more business travelers and boost revenue.

The new fare level will be priced higher than Southwest’s cheapest tickets but below the airline’s top two fare categories.

Southwest executives think this will fill the large price gap between the cheapest fares, called Wanna Get Away, and more-expensive tickets.

Consumers who buy the new fare level, called Wanna Get Away Plus, will get 33% more frequent-flyer points than the basic ticket, and they will be able to transfer the value of a ticket to another Southwest customer.

It’s the first major change in Southwest’s fare structure in 15 years. Airline officials said the changes announced Thursday will take effect in May or June.

Airlines frequently tinker with fares and fees to squeeze more revenue from passengers.

In recent years, Delta, American and United have reacted to competition from discount airlines by rolling out new, bare-bones “basic economy” fares.

The big-three airlines then nudge customers to pay more for regular economy seats that include the amenities that they have come to expect.

Southwest hinted at the changes back in December without giving details.

The new fare level is among several moves, including a new credit-card deal with Chase Bank, that the Dallas-based airline hopes will collectively boost annual revenue by between $1 billion and $1.5 billion next year.

Executives declined to say how much more Wanna Get Away Plus seats will cost compared with cheaper seats, but it will vary by flight.

Besides more frequent-flyer points and the ability to transfer credit, Plus buyers will be allowed to fly standby at no extra cost, even if there is a higher fare for the new flight.

Southwest will also add early-boarding privileges to the next priciest fare, called Anytime, to avoid cannibalizing sales of full-price tickets.

Early boarding is a perk because Southwest does not assign seats, meaning that the last passengers to board a crowded flight wind up in middle seats.

Andrew Watterson, the airline’s chief commercial officer, said all the changes should be particularly appealing to business travelers.

Uber includes taxi cabs on its app in New York

Uber, hit by driver shortages and a surge in food delivery requests during the pandemic, will list New York City taxi cabs on its app, a partnership that until recently would have been unthinkable with both camps fighting ferociously for the same customers.

After a period in which waits for an Uber ride grew longer due to a driver shortage, the partnership will boost the number of rides available, and it gives NYC cab drivers access to a massive pool of commuters with an Uber app on their phones.

There had been hints tensions between Uber and taxi services had begun to thaw as Uber expanded aggressively into the lucrative food delivery business and needed a growing supply of delivery drivers.

During the pandemic, Uber’s food deliveries outpaced rides given to humans as millions of people sheltered at home.

Gross bookings for delivery services at Uber reached $13.4 billion in the final quarter of 2021.

That’s compared with $11.3 billion in gross bookings for Uber rides.

The agreement announced Thursday comes amid the backdrop of more cities moving to regulate the explosive growth of Uber and other app-based ride services, including New York City, which placed a temporary cap on new licenses for ride-hailing services in 2018.

New York City is the largest American market for Uber.

The New York City Workers Alliance, a group that represents taxi drivers and has been critical of Uber and other ride-hailing apps, said it would push for negotiations.

From wire reports