Southwest differentiates itself through its marketing position of `no hidden fees'
Published: 10 Oct 2008
Southwest sells nearly 2.5 times the dollar volume of online tickets at its site in comparison with its nearest competitor, according to the results of a study done by comScore, Inc.
The study was about the online ticket sales via the US sites of leading airlines as well as consumers' attitude towards the airline fees.
From the second quarter of 2007 through the same period in 2008, Southwest Airlines has expanded its leading share of online ticket sales made directly at airline sites by 4.8 points, according to comScore's passively-observed online behavioural data. While Southwest has long positioned itself as an economically priced airline, part of its growth in share coincides with the imposition of additional fees for services such as checking luggage and in-flight beverages charged by the majority of the competing suppliers, shared the company.
Meanwhile, Southwest Airlines has launched a marketing campaign promoting its "Freedom from Fees" policy.
"Charging additional fees for checked bags, meals, blankets and other services previously included in the cost of a ticket has received significant media attention and has been widely unpopular among consumers who, in today's economy, have become increasingly price sensitive," said Kevin Levitt, comScore vice president. "Southwest Airlines appears to have successfully differentiated itself through its marketing position of 'no hidden fees,' effectively bolstering its online ticket sales and increasing its market share."
comScore also pointed out that while most airlines have implemented additional fee policies for select services, some are also considering an 'a la carte' pricing structure, charging a low base fare with additional costs for all other services. American Airlines, for example, is reportedly planning to move to this pricing structure next year.
A recent comScore survey of more than 1,000 airline consumers found that consumer sentiment toward the 'a la carte' pricing structure is evenly divided, with 39 percent of respondents in favour of this structure, 37 percent opposed, and 14 percent unsure or undecided. Interestingly, respondents who said they prefer to fly American Airlines were the most receptive to 'a la carte' pricing, with 57 percent indicating they were in favour of the policy and only 32 percent indicating their opposition to it. Those who prefer to fly Continental Airlines and Delta Airlines were less receptive to the policy, with less than half of respondents indicating they were in favour of it.
The survey also asked consumers about their willingness to pay additional fees for a range of services and amenities. Consumers indicated they were least likely to pay for a pillow or blanket (82 percent said they are somewhat unlikely or not at all likely to pay for the amenity), the ability to book by phone (80 percent), a window seat (79 percent) or an aisle seat (77 percent). They said they were most likely to pay for oversized bags (24 percent said they were somewhat or extremely likely to pay), Internet access (20 percent), or a second checked bag (18 percent).
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