what are you afraid of?

[FWAAA]

I agree with Rhino. WN's fares are not always the cheapest. But its fares are always fair. Always.

Its walk-up fares are actually affordable. Try that on AA. Walk up to the counter and buy a full-fare transcon ticket an hour before departure. On WN, never more than $299 each way plus tax.

Yep, it's true: WN is not always the cheapest option. Very rarely it might even be the most expensive option (especially once it sells out its cheap fare buckets before all the other losers sell out of their cheap buckets) but all of the time it is the fair option. Consumers know that, and that's why WN is successful.

 

[USAir757]

Orbitz would love to be given a second chance to sell Southwest tickets, especially given the brand recognition it has. So if WN is comfortable not always being the cheapest option on the routes they serve, and they can still keep the option of adjusting their rates to cover the $3-$12 booking fee that orbitz charges the traveller, why not offer the tickets there? Is it because they don't want to officially admit they're not the cheapest option? I mean, are they in essence saying, "we have enough business, we don't need any more points of sale"?

 

[FWAAA]

Orbitz would love to be given a second chance to sell Southwest tickets, especially given the brand recognition it has. So if WN is comfortable not always being the cheapest option on the routes they serve, and they can still keep the option of adjusting their rates to cover the $3-$12 booking fee that orbitz charges the traveller, why not offer the tickets there? Is it because they don't want to officially admit they're not the cheapest option? I mean, are they in essence saying, "we have enough business, we don't need any more points of sale"?

Orbitz and other online agents charges airlines more $$$ than their own websites cost - that's really the reason. So Orbitz charges passengers and charges the airline. Airlines have tried hard to push people to their own sites, and WN has been more successful than most.

 

[KCFlyer]

Orbitz would love to be given a second chance to sell Southwest tickets, especially given the brand recognition it has. So if WN is comfortable not always being the cheapest option on the routes they serve, and they can still keep the option of adjusting their rates to cover the $3-$12 booking fee that orbitz charges the traveller, why not offer the tickets there? Is it because they don't want to officially admit they're not the cheapest option? I mean, are they in essence saying, "we have enough business, we don't need any more points of sale"?

Naw...I think they find it better to keep their "high" prices on their own website, and let the other airlines undercut fares to the point where they need to ask their employees to take more pay cuts and perhaps even file bankruptcy. :blink:

 

[Ch. 12]

Orbitz would love to be given a second chance to sell Southwest tickets, especially given the brand recognition it has. So if WN is comfortable not always being the cheapest option on the routes they serve, and they can still keep the option of adjusting their rates to cover the $3-$12 booking fee that orbitz charges the traveller, why not offer the tickets there? Is it because they don't want to officially admit they're not the cheapest option? I mean, are they in essence saying, "we have enough business, we don't need any more points of sale"?

Those points of sale cost money. WN has avoided large GDS's by creating their own and has avoided the masses of distribution outlets in order to keep costs down. And WN has a history of competing on COST and not PRICE. Why pay significant extra costs to distribute tix in more outlets when they are selling tix just fine through their own, lowcost distribution.

It's not a "fear" issue. It's a common sense business decision.

 

[USAir757]

Why pay significant extra costs to distribute tix in more outlets when they are selling tix just fine through their own, lowcost distribution.

So in essence, I'm correct. WN is, in fact, satisfied with what they get through southwest.com and doesn't care to expand their market share through other outlets.

Does anyone have any specific information regarding what companies like orbitz and expedia charge the airline per reservation? I was not aware that they charged both the consumer AND the airline, that doesn't make a whole lot of sense to me, especially since the airlines are the websites' true "customers", because without them, they'd have no tickets to sell. If I were managing a travel website as such, the first thing I'd do is say, "hey wn, we won't charge you a thing. But we will put more butts in seats than you would have otherwise." It's a win-win for both organizations... that is, so long as Southwest is comfortable with the public being able to see their fares right up next to the others.

 

[ngneer]

Orbitz would love to be given a second chance to sell Southwest tickets, especially given the brand recognition it has.

Sure, but given Southwest's strong brand recognition and reputation, Southwest is in the enviable position of having customers seek them out. So why spend money paying someone else sell your tickets when you can sell them yourself? Since WN now carries the most domestic passengers of any airline, I won't second-guess their ticket selling strategy.

 

[mrman]

USAir757
Southwest is the largest travel website in the world. It does more business than travelocity or orbitz. There is no need to pay distribution costs when you have more people going to your website thant the other airlines 'combined' website

 

[Ch. 12]

So in essence, I'm correct. WN is, in fact, satisfied with what they get through southwest.com and doesn't care to expand their market share through other outlets.

Simple cost-benefit in its purest form. The costs would far outweigh the benefits...especially when WN subscribes to none of the major distributors so it would be a major change for them compared to a legacy that is already on a few sites adding just one more.

Does anyone have any specific information regarding what companies like orbitz and expedia charge the airline per reservation?

A few years ago, I could have told you but that was a past life. Yes...they charge the airline and the consumer. These distributors go through the various GDSs so they collect fees per ticketing and (at least they used to) charge fees per availability check...which is just about every time you search in orbitz/expedia/etc. So the airlines get charged the GDS-type fees and the consumer supposedly is charged for "administrative" fees of the distributor. Rates charged to the airline very based on volume (i.e. higher volume price-breaks) but also are dependent on the agreement type between the distributor and carrier. So to get back to your question...the cost to the carrier is definitely significant enough to cause carriers to think before jumping on to these sites.

 

[USAir757]

Thanks for the info.... though, I must say I am surprised to hear the claim that "Southwest is the largest travel website in the world".... I wasn't aware of that, and I'd be interested to see some back up support.

If what you're saying is true, it's a wonder then that any airline subscribes to these website sales outlets... if the costs are as steep as you say... but then, it does make sense as to why they'd be pushing so hard for traffic to come directly to their own sites.

 

[Ch. 12]

Thanks for the info.... though, I must say I am surprised to hear the claim that "Southwest is the largest travel website in the world".... I wasn't aware of that, and I'd be interested to see some back up support.

If what you're saying is true, it's a wonder then that any airline subscribes to these website sales outlets... if the costs are as steep as you say... but then, it does make sense as to why they'd be pushing so hard for traffic to come directly to their own sites.

The costs are mere cents (but are definitely whole cents on the dollar) and over high volume, it adds up. In an era where fares are already very low yielding, it makes sense for some carriers to abstain from these distribution outlets. For others, though, their model has been to be available through as many outlets as possible. I suppose to them, the cost-benefit seems to work in their favor (or they just don't get to that level of detail) but for WN, it is a cost that they have never incurred so it doesn't make sense to start now.

I, too, am intrigued by the "largest travel website in the world" assertion. That's pretty impressive, if true, but I guess it also depends on the metrics used.

 

[FWAAA]

I'm too lazy to search for it, but a couple years ago or more I recall WN announcing that a vast majority of its tickets are now sold via its own website. It is positively the best airline website I have ever seen. Easy to use.

Here's a link to a WN webpage saying that it is the largest airline website based on numbers of unique visitors according to Neilson/Netratings and disclosing that 65% of its pax revenue was sold on Southwest.com in 3Q2005:

http://www.southwest.com/about_swa/press/factsheet.html

Here's a link to an AA agency page demonstrating the vast difference in costs between aa.com and the other GDS costs:

http://www.aa.com/content/agency/Agency/Ev..._overview.jhtml

$1.75 per coupon if booked via aa.com and $3.95 if booked via Apollo, Amadeaus, Sabre or Worldspan? That's a big difference. AA discloses here that its deal with Travelocity results in vastly reduced distribution costs (in exchange for access to AA Web Fares) but doesn't give specifics (for obvious reasons). Probably has a similar deal with Orbitz.

Still, I think the entire premise of the OP is flawed: WN isn't "afraid" of consumers comparing its fares, and such nonexistent "fear" has nothing to do with WN's refusal to distribute its tix via the various online travel agents. WN simply doesn't need to pay online travel agents to sell its tix. Why pay for something you don't need?

 

[ngneer]

So in essence, I'm correct. WN is, in fact, satisfied with what they get through southwest.com and doesn't care to expand their market share through other outlets.

Yes. Up until a few years ago, WN did offer their tickets for sale through Travelocity. However, WN discontinued that relationship when it became clear that it was no longer necessary.

 

[luver41]

Thanks for the info.... though, I must say I am surprised to hear the claim that "Southwest is the largest travel website in the world".... I wasn't aware of that, and I'd be interested to see some back up support.

If what you're saying is true, it's a wonder then that any airline subscribes to these website sales outlets... if the costs are as steep as you say... but then, it does make sense as to why they'd be pushing so hard for traffic to come directly to their own sites.

At one point --a couple of years or so ago-- Southwest Airlines did more business throught it's web site than anyone with the exception of ebay and amazon.com. I do recall reading that, but don't remember where. Also, I'm not sure if that remains true today. Suffice it to say that Southwest sells a lot of tickets throught its own web site.

 

[Ch. 12]

SWA is the stone cold BEST at conveying a simple Marketing Message and getting the casual flyer to buy into it. I've seen a study that shows that SWA is only the cheapest 26% of the time. But try to tell that to "Ma & Pa Kettle Go to Disney World" They think you're nuts

Good post, Piney.

As far as WN's "claims" to being cheaper (though, as you allude, WN does not claim this but the public percieves this), I don't think that ANYONE ever says that WN is cheapest 100% of the time. But when WN only carries 13% of domestic pax (per Jan-Oct data from BTS), I'd say that they do pretty well to be cheapest 26% of the time (based on their share, shouldn't it be much less?). So the assertion that "WN is cheaper" isn't meant to be 100% of the time as others have spun it but rather "in general". I wonder if AA or DL that each carrier 12% of the share over the same period could also boast being cheapest 26% of the time. My guess is that they aren't even cheapest 12% of the time.