Southwest Cuts Highest Walk-Up Fares

Southwest Airlines today lowered its highest one-way, walk-up fares, to $299 from $399, in an effort to stimulate business travel. American and Northwest airlines quickly matched on coach tickets in competing markets, and Delta Air Lines said it also would compete. Other large carriers were unavailable by midday to comment.

A Southwest spokesperson said the change affects only about one-third of Southwest's city pairs, mostly in long-haul markets. Southwest is strongest in short-haul markets, where its one-way walk-up fares already tend to be below $299. "Typically, in better times, about 40 percent of our customers were traveling on fully unrestricted fares," said the Southwest rep. "Now we're in the low to mid thirties."

According to two Wall Street analysts, the move affects less than 1 percent of revenues for the airlines, "qualifying it as a non-event," said JP Morgan Securities' Jamie Baker.

Nevertheless, buyers and other observers were supportive.

"This is the most dramatic move by an airline of Southwest's stature for the business traveler," in terms of fares, said Terry Trippler, president of Trippler and Associates in Minneapolis. "It's the first move that makes sense in terms of getting businesspeople flying again, and it has been made by an airline that can back it up. Any business that cannot pay $299 one way has bigger problems than the expense of air travel."

Welcoming any reduction in fares, regardless of scale, Phoenix-based ON Semiconductor global travel manager Colleen Guhin said, "Southwest's first-come, first-serve boarding process turns some people off, as does the lack of food, especially on long hauls," she said. "But the industry is changing and I don't think business travel will ever go back to the way it was before."

Commenting on the move, spokespeople for Southwest and its competitors traded barbs on business travelers' interest in their respective services. Southwest emphasized its reliability while American and Northwest made mention of such services as airport lounges, international routes and interlining with other carriers.

American's decision to match Southwest "clearly debunks the myth that Southwest and only low-cost carriers have low fares," claimed an AA spokesperson.

"Other airlines can't match us everywhere and they know that," added a Southwest spokesperson.