Study Challenges Southwest's Low-Fare Image - Business Travel News

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Study Challenges Southwest's Low-Fare Image

March 04, 2013 - 03:25 PM ET

By Jay Boehmer

Southwest Airlines for decades has built a reputation as America's preeminent low-fare carrier, but a study due out this week from airfare auditing firm Topaz International concluded that reality only occasionally conforms to that perception.

Based on an audit it completed in November 2012 examining 100 major domestic city pairs, Topaz found that "competing airlines were lower than Southwest Airlines over 60 percent of the time."

In other cases, the carrier's fares either were the same or lower than the competition, which included both legacy airlines such as American and United and such other "low-cost carriers" as Spirit and Frontier.

"This result is surprising given the perception in the marketplace, and with many travel managers, that Southwest Airlines is in fact the low cost carrier in all markets they serve," according to Topaz.

However, the cost of flying on Southwest becomes more favorable for travelers who check bags, since the airline has resisted matching its largest competitors in charging extra to check the first or second pieces of luggage.

If travelers check one bag, Southwest is a better deal 60 percent of the time, Topaz determined. When checking two bags, "Southwest Airlines is almost always a better option in the 100 markets analyzed," beating competitors on pricing in such instances 88 percent of the time.

Topaz noted that it's an important distinction for corporate travelers, since it is "unlikely for a business traveler to be checking two bags." Many avoid even checking one.

Topaz studied only "comparable flights" between Southwest and its competitors, keeping constant such factors as the origin and destination airports and whether the itinerary was nonstop or involved connections.

In conducting its audit, Topaz first priced itineraries on Southwest's website, then compared competitors' like itineraries on public online travel agency sites, including Expedia and Travelocity, and the competing carriers' own websites. The firm also examined various dates of travel—"all based around a typical business trip," with a focus on departure times around 9:00 a.m. and returning flights around 5:00 p.m. "Overnight stays could be as short at two nights in a destination, up to five nights," according to Topaz's methodology.

Topaz said the study was independently conducted and not sponsored by another entity.

Southwest did not immediately reply to a request for comment on the study's findings.

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