The Wall Street Journal has an interesting article on the dramatic increase in Southwest Airlines airfares over the last 5 years. The big headline statistic is:
Southwest’s average ticket price has jumped 39% in the past five years, while the average ticket price for domestic trips for the industry was up 10%, according to the Department of Transportation.
In a spot check of 24 markets for travel over the Fourth of July weekend, Southwest had the lowest prices in only 11.
That’s a big increase. Percentages can be confusing though and since Southwest’s fares started out much lower, there are still many routes where Southwest is the cheapest option. This is most likely true if you live near a Southwest hub airport like BWI, LAS, MDW, PHX or HOU. Southwest Airlines made headlines in the past for its aggressive use of fuel hedges. When fuel and oil prices skyrocketed, Southwest enjoyed must lower price fuel than other airlines. They used this advantage to expand their business as the “low fare leader”. Unfortunately, hedge contracts don’t last for ever and the article points out that many of those advantages are now gone:
The end of the fuel hedges made the biggest change in pricing, however. For many years Southwest’s fuel costs were significantly lower than rival airlines because Chief Executive Gary Kelly decided when prices were low before the U.S. invasion of Iraq to pre-purchase fuel and buy hedges against higher prices.
I, personally, have never flown Southwest. This is mainly due to the fact they don’t serve Seattle anywhere near as well as Alaska Airlines does and that they do not offer First Class seating. When I used to be a very frequent traveler, the ability to get free upgrades to First Class was enough to steer me clear of the airline. Their frequent flyer program is also pretty limited and only gets you flights and rewards on Southwest, as someone that likes to save my miles for big international flights, this is a non-starter.
If getting the lowest fare is your priority, and you have always assumed Southwest had the best rate, shopping around a little bit may now make more sense. Of course, be sure to compare apples-to-apples, the articles points out:
One major reason Southwest prices can seem higher than competitors, he noted, is because Southwest doesn’t charge fees to check baggage or penalties to change tickets. Check one bag for $25 each way and a Southwest ticket that is $50 higher than another airline may, in fact, cost the same.
More information is available at the source.
Can’t Call Southwest a Discount Airline These Days | The Wall Street Journal