Southwest Unveils New Fare
To Lure Business Travelers
By MELANIE TROTTMAN
November 7, 2007 3:23 p.m.
Continuing its push to draw more business travelers and boost revenue, Southwest Airlines Co. launched a “Business Select” product that will reward frequent fliers willing to pay the highest fare.
Starting Thursday, passengers purchasing tickets in the new “Business Select” fare category will get preferred boarding, a free cocktail voucher, and bonus frequent-flier award credits to earn free tickets faster.
Fares in the new Business Select category will be $10 to $30 more one-way than the current highest-priced tickets sold by the Dallas-based airline. Chief Executive Gary Kelly expects the new product, along with other tweaks in the airline’s fare structure, to generate at least $100 million more in annual revenue starting next year.
“This is the first step in what we call our implementation phase” of targeting more business travelers, he said.
Operating costs at Southwest, known for its low-cost model, have been rising and forcing the airline to raise fares more aggressively. Targeting more business travelers is a key way in which Southwest expects it can boost revenue. The airline’s lack of assigned seating has been a problem for many business travelers who have had to check in online or at the airport early, and line up at the gate early, to ensure getting a good seat. Passengers generally have to be in the “A” boarding group to ensure a window or aisle seat.
Southwest recently changed its boarding policy to avoid passengers’ having to line up so early at the gate. Starting Thursday, it will launch a new policy that guarantees “A” group boarding to passengers who have flown 16 round-trips with the airline in one year.