Southwest no longer cheapest airline

Southwest Airlines, which built its reputation on no-frills planes and budget fares, is no longer the cheapest airline to fly.

Southwest, which got its start in 1971 jetting among three Texas cities, has grown into the nation's largest airline by market share. In many cities it is the corporate travel airline of choice.

As its business has grown, the Dallas-based airline has increased fare prices. But by maintaining attentive customer service and opting to remain the only major airline not charging luggage fees, it has kept a reputation as a low-cost airline.

"Whenever possible, I take Southwest because of the price, and it's consistent all the time," said John Tanski, 53, of Dallas, who handles inventory and point-of-sale systems for Del Frisco's Steakhouse. Tanski was checking in last week at Philadelphia International Airport for a flight home.

In addition to its long-standing customer focus, Southwest has added effective marketing to build an army of loyal fliers.

The result: Many fliers have the perception that Southwest is the lowest-fare carrier in all markets it serves. "There is a passion about Southwest that you rarely see in the airline industry, that it's the best airline ever and their fares are always cheaper," said Bradley Seitz, president and CEO of Topaz International Inc., a corporate travel and airfare auditing firm.

In some ways, Southwest remains a no-frills carrier: It has neither seat assignments nor first-class cabins, and it flies mostly one aircraft type, the Boeing 737.

Southwest distinguishes itself by allowing passengers to check in two bags at no cost, and it does not charge a fee to change a flight reservation. Other airlines charge up to $200 to change a ticket.

"Southwest is just a more bundled airline. They get less ancillary revenue than the other airlines, so they have to get more of it in the base fare," said Seth Kaplan, managing partner of Airline Weekly, an industry publication. "Southwest is not a start-up airline anymore with a very junior, low-paid workforce. They pay many of their people some of the highest wages in the industry."

The lowest base fares today can be found on upstart budget carriers Spirit, Frontier, and Allegiant, but travelers pay extra for everything, including a carry-on bag.

"This is a circle of life in the airline world, or in any world, where as companies get more mature, their costs rise, and then somebody new comes in that's younger and leaner, and able to be the next generation of low pricing," said Brett Snyder, author of CrankyFlier.com, an airline industry blog.

In November 2012, Topaz studied 100 U.S. markets where Southwest competed with other airlines, including American and US Airways, Philadelphia's dominant carriers. Topaz compared nonstop and connecting routes and base fares plus baggage fees.

When comparing airfare only, competing airlines were cheaper than Southwest more than 60 percent of the time, and more expensive 35 percent of the time, Seitz said.

But with one checked bag included, the results were reversed, because Southwest does not charge baggage fees. Competing airlines' fares cost less than Southwest 40 percent of the time, and higher when adding the bag fees 60 percent of the time.

Topaz last week examined airfares from Philadelphia to 11 cities where Southwest flies nonstop. The findings mirrored the earlier study.

If travelers carry on their bags, Southwest was cheaper 31 percent of the time, more expensive 64 percent of the time, and about the same price 5 percent of the time.

When travelers checked one bag, Southwest was less expensive 61 percent of the time, while other airlines were cheaper 39 percent of the time.

With two checked bags, Southwest cost less 87 percent of the time, compared with 13 percent for competitors. Most rival airlines charge $25 for the first checked bag and $35 for a second bag.

"At times, depending upon how you were traveling and whether you checked bags, Southwest was the cheapest alternative," Seitz said. "But that's not necessarily the case for business travelers, who often don't check a bag."

Southwest does not sell its tickets on travel websites such as Expedia, Travelocity, and Orbitz. Consumers have to go to the airline's website, and check other online travel sites for comparative prices.

"The one thing that Southwest still has, and it's their hallmark, is very good customer service," said Snyder, the CrankyFlier author. "When little problems come up that other airlines will say, 'Too bad, pay the fee,' Southwest will often just fix it."

Jeffrey Erlbaum, president of ETA Travel in Conshohocken, said, "Most of my travelers prefer Southwest because they feel the service is better, the flight attendants are friendlier. If you have to make a change, you are not gouged with a change fee. The other three big airlines have an automatic $200 for every change on a nonrefundable ticket.

"And you know what you are getting with Southwest," Erlbaum said. "Most of the legacy carriers, their planes are all different. Their service varies. Half the time you are flying a regional carrier on a smaller plane. The majority of Southwest's fleet are Boeing 737s."

Southwest acknowledged its base fares are not as low as Spirit's or Frontier's. But airline spokeswoman Thais Conway insisted the "Southwest effect" is alive and well. For example, in 2004 and 2005, before Southwest began flying to Philadelphia from Pittsburgh, the fare each way on US Airways was as high as $226 and $231 each way, Conway said. Between 2006 and 2011, when Southwest flew the route, competing with US Airways, the one-way fares ranged from $78 to $92.

"We bring in that forced competition across the board," Conway said.

Passengers checking in for Southwest flights at Philadelphia International Airport last week extolled the virtues of the airline, which flies nonstop from here to 11 cities. It will be 12 in August when service will begin to Dallas.

Shanique Kelley, 24, an information technology consultant from Kansas City, said she flies Southwest when she can.

"They have great customer service. If I need to change a flight, I don't have that change fee. Bags fly free, and I think they have one of the best frequent-flier point systems," she said. "The fare ends up being about the same" when you add the bag fees charged by other airlines.

$409

Average roundtrip fare

on nonstop Southwest routes to cities

out of Philadelphia.

$388

Average roundtrip fare

on other airlines flying

the same routes.

$435

Average roundtrip fare

on other airlines with

one checked bag.

$504

Average roundtrip fare with two checked bags

on other airlines.

Source: Topaz InternationalEndText