The market clearly is sensitive to pricing, although the level at which the prices have now been de-constructed is just ridiculous.
It is certainly not the case that the "lower cost" airlines are always cheaper on individual fares. However, if you aggregate the numbers, you will find that Southwest's revenue per passenger is lower. This is achieved by having lower average fares. The revenue per passenger stats cover all income, so the baggage costs etc are included. (Just on a side note: the reason Southwest is not on online travels sites like Orbitz and Travelocity is that they will not pay commission, as part of their low cost strategy. It also significantly improves the cash flow position of the airline, as the fares are paid at the time of booking to the airline and not retained by the agents).
However, my preference for Southwest is not solely based on price. When I have used them, I think there is a significant difference in the staff attitudes towards their customers... it has a positive culture towards their passengers which is in stark contrast to the likes of Delta, Spirit and in Europe Ryanair.
|