Southwest Airlines raises key fees

The airline that has built its business around transparent pricing has recently been leaning on added fees.

May 30, 2024 - 22:30

0 7

Southwest Airlines built its business by being a disruptor. It's the airline that charges one price for a ticket and does not tack on a bunch of extra and unexpected fees.

The airline has used the word "transfarency" to describe this philosophy, which it defines on its website.

"Philosophy in which customers are treated honestly and fairly, and low fares actually stay low — no unexpected bag fees, change fees, or hidden fees. Low fares. No hidden fees," the airline wrote.

It's a noble idea that Southwest Airlines (LUV) only sort of lives up to. The airline does not charge for seat assignments (because it does not assign seats) and passengers do not pay for carry-on or checked bags (up to two).

That's different from how most major airlines work, and in some ways Southwest has been true to its philosophy. The airline, however, has been willing to charge fees in some areas.

Southwest charges for WiFi, for example, which you could argue is an extra, like an alcoholic beverage or a snack. The airline, however, last year changed how it charged for internet. Instead of paying $8 for your entire flight, no matter how many plane changes you make, the airline now charges $8 per segment.

In addition, the airline has been steadily increasing the price for its two boarding-related add-ons, Early Bird check-in and Upgraded Boarding.

Want the latest cruise news and deals? Sign up for the Come Cruise With Me newsletter.

Southwest Airlines charges some passengers to get on its planes earlier.
Image source: William Thomas Cain/Getty Images

Southwest Airlines boarding is mostly democratic

Southwest uses a largely democratic boarding process. Passengers can check in 24 hours before their flight and then they are assigned a boarding group (A, B, or C) and a number between 1 and 60.

When it comes time to board, the A group boards first (after people needing special assistance) with 1 being the first person in line. You want an earlier boarding spot as seats are selected on a first-served basis and overhead bin space can run out if you board later in the B group or in the C group.

Basically, a C group position means you're sitting in a middle seat and you may have to gate-check your carry-on.

Southwest's system, however, is not fully democratic as there are several ways to get a better position. First, A-List and A-List Preferred Rapid Rewards members (the airline's loyalty program) get checked in early. And if they don't get a position in the A group, they can board between A and B.

The airline sells access to that so-called Early Bird check-in on some flights. It also sells access to the A 1-15 positions under the Upgraded Boarding name.

Southwest Airlines raises its early boarding fees

Southwest uses demand-based pricing for its two early-boarding products and the cost has gone up.

"Southwest Airlines now charges $15 to $99 per passenger each way for Early Bird check-in. And they charge $30 to $149 per flight segment per passenger for Upgraded Boarding," View From the Wing reported.

"A family of four using Early Bird could now pay $792 roundtrip, and on connecting itineraries could pay up to $2,384 roundtrip!"

That's an extreme example and the airline maintains that it still offers tremendous value.

Cruising and Travel:

Chief Commercial Officer Ryan Green addressed that during the airline's first-quarter earnings call in response to a question about new Department of Transportation rules regarding refunds.

"We already have the most customer-friendly policies in the industry. So we're best positioned to comply with any of these new regulations out of the gate," he said. "And today, if there's a long delay or a cancellation, customers can receive a refund from Southwest."

He also pointed out the company's other customer-friendly policies.

"Flight credits don't expire with Southwest, if you have to cancel your flight for any reason," he added. "But in general, we're proud to be unique among airlines in having these customer-friendly policies: no bag fees, no change fees, flight credits don't expire, we don't nickel-and-dime customers."