Basic Economy of Basic Compassion? Southwest Airlines’ View

Southwest Airlines’ CEO Gary Kelly has denied the introduction of the basic economy from its airline.  Although many U.S. airlines have introduced the concept of a basic economy where only the ‘basic’ flying covered – Southwest Airlines is taking another approach. It will continue to offer seat selection and overhead bin space among other services.

“You’re not going to see basic economy from Southwest,” – Southwest CEO Gary Kelly

Among the airlines which have a basic economy, fare includes major U.S. airlines such as  American Airlines, United Airlines, and Delta Air Lines. The lower fares for the basic economy removes services previously offered to the passengers such as pre-departure seat selection, priority boarding, snacks and overhead storage space. The strategy to do away with the basic amenities can reduce the costs for the airlines and increase ancillary revenue.

southwest airlines

Kelly also confirmed in a statement that they will not charge for bag fees. On the other hand, there is news about some airlines increasing or putting in place fees for checked baggage as well.

The aim of Southwest is to ‘offer something of more value to road-warriors, to once-a-year-flyers.’

Many airlines are also experimenting with their own version of basic economy fare. Alaska Airlines, for example, has a ‘saver fare’ which allows a personal item and carry-on luggage on board. The travelers will also be able to pre-select seats during online check-in.

It will be interesting to see whether several major airlines will gain from the basic economy fares. Also, the travelers will reaction to the more appealing and comparatively expensive differentiation strategy of Southwest Airlines.

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