Southwest CEO Says Assigned Seats Still Don't Make Sense
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You have to give Southwest Airlines CEO Gary Kelly credit. Analysts are constantly prodding him to embrace tried-and-true approaches for generating ancillary revenue. For the most part, he resists. He doesn't want to mess with the airline's secret sauce.
With higher fuel prices likely to stick around for the foreseeable future, U.S. airlines know they must increase revenue, both from fares and ancillary opportunities like bag fees and premium seats.
Even airlines like Alaska Airlines and JetBlue Airways, which historically have avoided nickel-and-diming their customers, have been adding fees in an effort to raise ancillary sales.
Not Southwest Airlines, though. Yes, in recent years, it has has been more aggressive with products like Early-Bird check-in, allowing customers to secure a better boarding position — and with that a better seat — by paying a fee. On Thursday, during Southwest’s second quarter earnings call, executives said that product is selling better than ever.
Most of Southwest's core value proposition remains intact, and on Thursday CEO Gary Kelly reiterated the carrier has no plans to alter it despite higher fuel prices. That means the airline is unlikely to assess bag fees
