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Andrew Watterson has a distinct point of pride when it comes to the website of Southwest Airlines, where he is chief revenue officer: No “spinny thing” appears when users search for a flight, unlike other airline sites.
“Our website is blazing fast, and so if you go into Southwest.com and put in a flight search, it’ll come back really fast,” he said during a discussion at Skift Tech Forum in Silicon Valley in June. “The real reason behind that is we sell a bundled product. We do not nickel-and-dime you and try to make our money on selling you extra stuff, so we want our funnel to be really fast and really friction-free.”
That means speed is of the essence, he said. A slowdown could mean a lost customer.
“An airline who maybe makes their money on selling you extra stuff — whether it’s a fee or an upsell — they will put stuff in the funnel,” Watterson said. “And they’re somewhat OK if you bail out of that funnel because they needed to sell you that ancillary to be profitable.”
Southwest, famously, does not charge fees to check your first two bags, choose seats, or change flights.
“Wall Street thinks that you’re nuts for not charging the same baggage fees as everyone else,” said Skift Aviation Business Editor Brian Sumers, who interviewed Watterson on stage at the event. “I know this is a digital conference, but why don’t you have bag fees?”
Watterson pointed out that, first of all, “Wall Street’s lightened up now.” To the broader point, he said Southwest wants to make its passengers happy and eager to return.
“Bag fees and change fees are really big irritants; they piss the customer off,” Watterson said. “And we want customers to have repeat purchases from us. And it doesn’t cost 25 bucks or 50 bucks or 100 bucks to check a bag or have a carry-on bag. Really that’s just a way to get more revenue out of the customers.”
The airline, he said, prefers to offer a product that bakes in the services that passengers expect.
“Customers by and large are very pleased with that,” Watterson said. “Treating the customers well and having them come back seems like it’s gone out of fashion for a lot of companies, but it hasn’t for us.”
Watterson also discussed the gaps in data that still exist around boarding and getting off a plane; ways to help passengers better make their connections; why onboard Wi-Fi is so excruciatingly bad; and how the airline developed its direct-booking strategy.
You can watch the entire interview above, or consider reading more coverage of Skift Tech Forum.
At Skift Tech Forum in Silicon Valley, travel tech executives gathered for a day of inspiration, information, and conversation.