businessAirlines

Southwest Airlines is introducing a new fare type. Here’s what we know so far

Dallas-based Southwest Airlines said it would be selling a new type of ticket soon to compete with its ‘Wanna Get Away,’ ‘Anytime’ and ‘Business Select’ fares.

Coming out of the pandemic, Dallas-based Southwest Airlines says it’s getting ready to shake up the air travel business with a new category of tickets, expanding from its traditional three-tier “Wanna Get Away,” “Anytime” and “Business Select” fares.

Southwest announced the new fare type Wednesday at its investor day meeting in New York, but corporate leaders were stingy with details until the company is ready to launch the program in full.

Here’s what we learned during the presentation.

How much will it cost?

Southwest Airlines chief commercial officer Andrew Watterson said the airline would be launching a “new fare product which is essentially a new fare offering, or a fourth column to be displayed in our website along with what you see today, which is the Business Select, Anytime and Wanna Get Away columns.”

“I would encourage you to think about this as being above Wanna Get Away; that’d be an upsell,” Watterson said.

Southwest has had three ticket price levels for about 14 years. Wanna Get Away fares are the cheapest and are not fully refundable, but the tickets can be reused if customers want to rebook a flight. Anytime gives a refundable ticket and customers can make same-day flight changes or fly standby to grab a seat on another flight that day to the same destination. It also gives more loyalty points to program users.

The most expensive tickets, Business Select fares, give all those perks plus a better boarding position, a complimentary premium drink and even more Rapid Reward Points. Business Select tickets were introduced in 2007, the most recent change in the company’s fare structure.

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The upcharge for a Wanna Get Away fare can be as little as $10 or much higher. Most of the time, it’s between $30 and $50 to move up a tier, so expect the new tickets to cost somewhere in that range.

Airlines like Southwest also often allocate a certain number of tickets for each fare type, so the cheapest Wanna Get Away fares often sell out first, leaving only higher-priced fares for last-minute passengers.

Competitors such as American Airlines also offer more fare types, including basic economy, main cabin plus, business and first class. Prices vary, but first-class tickets usually cost hundreds more.

What will it include?

Southwest wouldn’t say exactly what would be included in the new fare category but did hint that it would be better than Wanna Get Away fares without taking away service from that lowest price tier of tickets.

“We will not be penalizing customers in terms of their fares and our product offerings,” Watterson said. He said the company isn’t taking anything away but is adding “an enhancement to our Wanna Get Away lower product, which our customers will happily pay a little bit more for.”

In a slideshow note, Southwest said it would be “also increasing benefits tied to existing ‘Wanna Get Away’, ‘Anytime’ and ‘Business Select’ products.”

An investor slideshow from the Southwest Airlines Annual Shareholder Meeting on Dec. 12, 2008
An investor slideshow from the Southwest Airlines Annual Shareholder Meeting on Dec. 12, 2008(Southwest Airlines)

The new fare type could be a combination of what is offered in Wanna Get Away tickets and premium tickets. Passengers paying for the new ticket type could see priority boarding or a drink offering. Priority boarding could be attractive because Southwest doesn’t assign seating, so seats are given to the first customers who board, which is based on loyalty status and ticket type.

Or maybe customers will get a refundable ticket without the other perks. Or the company could add other perks like additional checked luggage for free, free wireless internet or something completely new.

“So our goal is to have four fare products with more modest upsell in between each of the fare products,” Watterson said. “We expect this to be attractive to business customers as well as leisure and we intend to offer across our channels.”

When will we know more?

“For competitive reasons, we will provide details closer to the product launch in mid-2022,” Watterson said.

He also said it would be “active a little before midyear next year.”

So the new tickets could be available in time for the summer vacation season.

On Wednesday, the airline put tickets on sale through June 4, so tickets for early in the year are already on sale without the new price tier. For the rest, we’ll have to wait.

“More to come in the middle of 2022,” Watterson said.

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