Travel Trends: The effect of Southwest Airlines’ cheap fares on competitor fares

by Gadling Staff on

The last time you wanted to book a trip somewhere in the U.S., what airline did you think of first? If you’re like thousands of U.S. air passengers, you checked to see if Southwest Airlines flew in and out of the city you wanted to visit. Since its inception almost forty years ago in 1971, Southwest has been providing passengers all over the country with low-cost travel options.

Southwest uses several strategies to lower its costs so they can, in turn, can offer cheap fares. Among them:

  1. They mostly fly in and out of secondary markets, which are less costly.
  2. They only use one type of plane, the Boeing 737, which keeps maintenance costs down.
  3. They only fly domestically.
  4. Southwest Airlines is a “low frills” airline, dispensing with extras like meals or in-flight movies.

The formula seems to be working. The average Southwest Airlines ticket can often be a fraction of the price of a ticket on another major airline. Further, many passengers will drive out of their way to a secondary market in order to be able to take a Southwest flight. As a result of this success, other airlines have been pressured to lower their prices in order to compete. The average ticket price in markets with Southwest in them has gone down in the last ten years, while many markets without Southwest have gone up.

Because of Southwest’s policy of serving secondary markets, however, it’s difficult to do a simple analysis of the data to see in which markets the price has gone down, and in which markets it has gone up. Take, for example, Chicago Midway Airport, into which Southwest flies. Southwest does not fly into Chicago O’Hare, but prices there are still likely to be affected, since airlines at O’Hare want to compete for passengers who might otherwise go to Midway and use Southwest.

For a simple analysis, we looked at four cities in which Southwest had started service in the last ten years, and then compared ticket prices ten years later.

Buffalo started Southwest service in 2000. By 2009, Buffalo’s average fare had plunged by 19%. Southwest entered the market in both Dulles and Denver in 2006. From 2006 to 2009, the average ticket price at Dulles went down 1%; in Denver, the average ticket price dropped 13%. In 2007, service to San Francisco started; between 2007 and 2009, the average airfare went down 21%. None of these data account for inflation either.

By contrast, we also looked at the airfares from 2000-2009 in markets that did not have Southwest. Although the gains were modest by some means, in a world where most airfares have gone down in the last ten years, they were still significant. Not only does Savannah, Georgia, not have Southwest, but Southwest does not operate anywhere in the entire state of Georgia. Therefore, it was no surprise to see a 6% increase in fares over the last ten years. Alabama and Tennessee are both under served by Southwest, as well, which is reflected by Memphis increasing by 3% and Huntsville increasing by 9%. Finally, Reagan (Washington DC), which competes with Dulles, went up by 2%.

All in all, it’s cheaper overall to fly now than it was in 2000; but for the markets served by Southwest, it is cheaper still. The advent of Southwest and other low-cost airlines such as Air Tran have lowered costs all over the nation. Many people have reported that flying Southwest is a more pleasant experience in other ways as well; the facts bear this out. Southwest has the lowest customer complaints in the industry (as of 2009).

So what are you waiting for? Grab your sun tan lotion and your swimsuit — your next vacation in the California sun just got a lot cheaper.

Data Sources:

See more Travel Trends.

Lufthansa takes delivery of its first Airbus A380 super jumbo

by Scott Carmichael on

Earlier this week, Lufthansa Airlines took delivery of their first Airbus A380. With room for 388 passengers in coach, 98 in business class and 8 in first class, this is one massive plane. For the passengers in coach, the experience is nothing too special – with a 3-4-3 layout, there are a huge number of “middle seats”, but at least each seat has its own personal video screen.

The new plane has been named “Frankfurt Am Main” and will enter scheduled service on June 11th when it starts flying passengers between Frankfurt and Tokyo. By fall 2010, Lufthansa will have four Airbus A380’s in their fleet.

In the gallery below, you’ll see for yourself just how massive this plane is – the first class bathroom alone is larger than some puddle jumpers I’ve been on.

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Germany bans Ryanair from charging credit card fees

by Scott Carmichael on

Ryanair has been handed a nasty blow to its business model in Germany when their federal court banned the budget airline from charging credit card fees on flight reservations.

The case was brought against Ryanair by the German consumer protection agency who complained about the fee. Every ticket booked for Ryanair flights comes with an additional fee, varying between $2 and $5, and there is no way to avoid paying it.

Because Ryanair does not offer an alternative payment method, the courts dismissed the Ryanair argument that the bank processing fees are simply being passed on to consumers. In their verdict, the courts said the airline must provide an “established” payment method that does not require any extra effort or cost.

This verdict is just another blow to Ryanair in Europe – recently the airline was hit with a three million Euro fine for not aiding stranded passengers. In the end, if Ryanair does start including credit card fees in their ticket prices, it’ll most likely mean ticket prices will simply go up.

Ironically, the court verdict came at the same time Ryanair boss Michael O’Leary was in Germany to announce a major investment in Frankfurt for a new maintenance facility.

Galley Gossip: Captain A-rod and the cat lady from hell!

by Heather Poole on

I should have known it was going to be a weird flight when the captain introduced himself as A-rod. Short, round and graying, he stood in the galley massaging the shoulders of a tense looking flight attendant. When the agent walked on board with paperwork, the flight attendant quickly slid out of A-rod’s reach and eagerly asked. “Ready to board?”

Boarding, for a flight attendant, is the most hectic and difficult phase of flight, and would you believe we’re not even getting paid until the aircraft door is closed and the airplane backs away from the gate! It’s true. What makes it stressful is the pressure to get full flights staffed with minimum crew out on time. No longer are there extra flight attendants floating around to help passengers the way there once was years ago. Either we’re setting up a galley or keeping an eye on our exit doors. And by the time a full load settles into their seats and flight attendants can finally move freely up and down the aisle, we’re usually just a few minutes away from taxiing out.

Enter the cat lady. I spotted her right away during the boarding process. Now I love cats. I even own a sixteen pound Maine Coon named Gatsby, so I’m a bit of a cat lady myself. What I don’t love are – not passengers who bring on board pets that don’t fit under the seat in front of them (it happens), but passengers who don’t tell us when their pets don’t fit under the seat until the last minute, like a woman did on a flight a few years ago! That cat wound up in the first class coat closet for take off. So when I spotted this newest cat lady with a large hard case carrier, I asked if it would fit under the seat in front of her.”It should,” she said matter of fact. “I went to the airline’s website to check the measurements under the seat.”

Sounded good to me.

Well not only did the carrier not fit under the seat, an aisle seat, nobody with a middle seat wanted to split from their traveling companion. Cat lady turned red. In the aisle she stood yelling at me because my airline had “lied” to her and now I needed to make things right! Honestly, I was trying, but she wasn’t making it easy screaming at me like that. To make matters worse, the agent started making a PA asking everyone – her – to take their seats. That’s when it seemed like just about everybody seated in a five row radius began claiming to have severe cat allergies.

Quickly I walked up the aisle to report what was going on to the captain and the frazzled agent, but along the way a passenger waved me down to ask if his dog had been boarded. He’d seen it sitting in its crate on the tarmac and was worried. I told him I’d be right back.

“If the guy with the dog is wearing a red baseball cap, I already told him his dog was on board,” said A-rod. “It’s a big brown dog, right?”

I had no idea what it looked like, and was just about to tell him so when the agent interrupted us and asked, “Are you going to take the delay Captain?”

A delay is bad news at an airline. And someone has to take the heat. This is why flight attendants and agents start making back to back PA’s asking passengers to step into the aisle when stowing their bags and to take their seats as quickly as possible for an on time departure. Otherwise fingers start pointing. Flight attendants, gate agents, mechanics, cabin cleaners, we’re all guilty of trying to place the blame on another department. Get docked with too many delays and one could very well lose their job. It’s that serious.

I didn’t wait to hear A-rod’s response, I quickly walked back to coach and asked the dog owner if his dog was big and brown. He just looked at me. Then he told me the breed, as if that meant something to me. I tried again. “Is that breed of dog normally big and brown?”

He smirked. “Yeah.”

“Your dog is on the plane.” One down, one more to go.

Only when I finally reached the cat lady, I couldn’t believe what I saw. Somehow, I don’t know how, the other flight attendants had moved passengers around in order to accomodate the cat under a middle seat. In doing so, the cat lady now had an entire row all to herself.

Just as I started to relax, a passenger tugged on my sleeve. “Excuse me, Miss, I want to know what that woman paid for her seat!”

I started to tell him I had no idea what she paid for her seat, or what anyone paid for that matter, when another passenger piped in with, “Did she buy one seat or three?”

Across the aisle a woman yelled, “I don’t think it’s fair that she gets her own row while the rest of us have to suffer!”

On the verge of a mutiny, I tried calming the passengers down. It wasn’t easy. Did I happen to mention we hadn’t even taken off yet? And that boarding sets the tone for the flight? Oh yeah. Welcome aboard. Now where the heck was A-rod when you really needed a massage?

Tips for traveling with pets on the plane:

1. Book flights early. Only a certain number of pets are allowed in the cabin at one time.

2. Check the airline’s website for pet policies and maximum dimensions for carriers. (21 inches long X 13 to 16 inches wide X 9 inches high seems to be the standard)

3. Purchase a flexible pet carrier or “bag” as these tend to fit better under seats than hard case carriers. (If checking a pet in cargo, only hard case carriers are accepted.)

4. Choose a middle or window seat, as the space under aisle seats tend to be narrower.

5. Pets are required to stay inside their carriers throughout the flight. Make sure it’s ventilated on both sides.

6. Line the carrier with an absorbent material like “puppy pads” in case of an accident.

7. Make sure your pet is wearing an identification tag.

8. Personalize your pet. Put a sign on the carrier that reads, “Hi, I’m a cat and my name is____ . This is my first flight.”



Photos courtesy of Erica.Hargreave

Free Gogo Inflight Wi-Fi on Alaska Airlines this summer

by Scott Carmichael on

Alaska Airlines is celebrating the rollout of Gogo Inflight Internet on their fleet with a summer of free access.

Gogo Inflight Internet is available on six of their Boeing 737-800 planes and the current plan is to have the entire fleet outfitted by the end of the year.

You’ll know that you are on a Wi-Fi enabled plane thanks to a Wi-Fi decal next to the boarding door. Once the plane reaches 10,000 feet, you’ll be able to turn on your portable device and search for the “gogoinflight” Wi-Fi network.

Through July 31st, access will be free of charge, compliments of the Alaska Airlines Visa Signature card – saving you up to $12.95 per flight. You’ll need promotional code “ALASKAVISA” to bring the price down to $0.

Once the free period ends, access prices will vary between $4.95 and $12.95 depending on the length of the flight and the kind of device you are using.

At the moment, the Gogo Inflight service is only available when the plane is flying over the contiguous U.S. – coverage in parts of Alaska is scheduled to be available in early 2011. A map of the coverage area is available on the Alaska Airlines Wi-Fi information page.