Southwest adds charge to board sooner

DALLAS (AP) - September 2, 2009

VIDEO: Nydia Han's latest Consumer Wrap report

Southwest announced Wednesday that customers can pay extra to reserve a spot in the boarding line right behind elite fliers and ahead of families and other travelers. Unlike other airlines, Southwest doesn't offer assigned seats.

The new offering comes after Southwest introduced new fees for minors traveling alone and for bringing a small pet on board. Southwest still doesn't charge to check the first two bags, but experts and regular passengers are starting to wonder if that's next.

Southwest, like other airlines, is desperately looking for revenue to offset a slump in traffic, especially among business travelers who usually pay higher fares for last-minute or refundable tickets.

The Dallas-based discount airline lost $37 million in the first six months of this year, and analysts expect that 2009 will be its first unprofitable year since the early 1970s.

Many analysts believe Southwest is passing up hundreds of millions of dollars a year by not charging passengers for all checked bags. CEO Gary Kelly has said bag fees drive customers away, and he has ruled them out at least through the end of 2009. No promises beyond that.

Southwest officials say they're just charging for extra services that customers want.

"The big difference between (the check-in service) and a bag fee is this is strictly optional," said Kevin Krone, Southwest's vice president of marketing.

Southwest is considering other amenities with charges, including in-flight Internet service.

"We'll continue to tinker and develop and launch," Krone said. "We're not done yet."

The airline believes the early check-in charge can raise about $75 million a year, on par with Business Select tickets, which cost more but come with extras such as early boarding and a free drink. "We'd be thrilled if it became in the hundreds of millions," Krone said.

Bob McAdoo, an analyst for Avondale Partners, is more bullish. He believes the boarding charge could raise $250 million a year. It could bring in enough money for the rest of 2009 to salvage a profitable year, he said.

McAdoo estimates that one-fourth of Southwest passengers could pay the check-in fee. Southwest declined to give an estimate.

The new $10 fee is called EarlyBird Check-in, and it was made available Wednesday for trips beginning Thursday and beyond.

Customers can pay the charge up to 25 hours before their plane is scheduled to take off, and they'll be moved toward the front of the boarding line.

The early birds will still wait behind passengers who bought more costly tickets called Business Select and elite-level frequent fliers, but they'll leapfrog over everyone else, even families traveling with small children, and they should find plenty of space in the overhead bins for their carryon luggage.

Southwest officials say that by paying the extra $10, you'll probably be among the first 30 people to board - the "A" group - although they won't promise it.

Families board next, then "B" passengers, and the last group to board Southwest planes is the "C" group. Folks in that group are usually stuck in a middle seat; Southwest's Boeing 737 jets have three seats on each side of the center aisle.

Experienced Southwest travelers go to the company's Web site precisely 24 hours before scheduled departure to be among the first to check in. They'll still be able to do that, but they may find themselves far from the front of the line.

That's good enough for Beverly Nageotte, an artist from Cloudcroft, N.M., who was waiting at Dallas Love Field for a flight back home. She said people would be silly to pay $10 extra.

"You're not going to go anywhere until everyone's on the plane anyway," she said. "I'm happy to get on the plane and hope it takes off and lands safely."

Dallas lawyer Ed Cloutman said $10 would be a bargain for harried consumers.

"Getting stuck in the middle seat is no fun," he said.

Steve Kennedy, a banker from Houston who often flies Southwest to Dallas, recalled that during its freewheeling youth in the 1970s Southwest made a splash by charging more for tickets but threw in a complimentary bottle of liquor.

"I understand in this day probably the best they can do is move you ahead in line instead of giving you a fifth," he said. "Corporations don't like that anymore."

More money-related links:
Copyright © 2024 WPVI-TV. All Rights Reserved.