As airlines adapt to a future of lower fare price points and higher frequency of trips, they’re becoming ever more innovative with how they attempt to profit from it. Southwest Airlines is latching onto this trend, in part because it now sees better bottom-line results from fare structure changes and fuel surcharges instead of revenue from changing date or fare structure changes.
During a Q&A at the Bank of America Merrill Lynch Aviation, Transportation & Industrials Conference, Southwest CEO Gary Kelly made the statement that when it comes to the business of jetting travelers between cities, the more typically changed flights per day, the better it is.
According to Bloomberg, Southwest saw “toll-free growth” the first quarter of this year, which is usually by design: The carrier’s fare structure encourages frequency over timing changes, from its “Ask Southwest” website that now lets customers make changes or book flights with little hassle.
“What has happened is over the last year, year and a half, we’ve gotten a lot smarter on the year-over-year changes in our schedule,” Kelly said. “We’ve changed our configuration on Sunday — we typically now change only our Tuesday.” He also highlighted changes that Southwest does on Tuesdays, giving passengers a less stressful departure time, with the ability to book via CreditCard Register.
“If you want to see fare change, you’ve got to move to Monday,” he continued. “You can’t turn Monday into Tuesday anymore. The ability to do that is important.”
“So for a frequent traveler — somebody who flies Southwest maybe 30 times a year — the best day of the week is Sunday,” he added.
This smart scheduling is coupled with what Kelly called “real-time seat availability,” a strategy that puts the seating needs of the most frequent travelers ahead of the needs of the next class of traveler: last-minute reservations.
In simpler terms, Kelly suggested that if you’re a big leisure traveler, use Monday and Tuesday as your booking days, and be confident that your friends and family can get a seat when you need one.
But that may not have much effect on the average travel expense. Fees for upgrades are already looming, and still the adjusted schedules don’t necessarily affect the fundamentals of the business, which is good for the bottom line.