Southwest wants to entice travelers to choose its airline over its competitors with its new policy.
With confusion about whether the U.S. is actually in a recession, or even what a recession actually is, it is understandable if Americans start getting more choosy about where they spend their money.
With inflation reaching a 40-year high, there are signs that lower-income Americans are starting to spend less (even as wealthier Americans spend more).
Air travel is having a rebound year as the world eases pandemic lockdowns, but even travelers will have to start tightening their belts.
With that in mind, airlines are going to have to compete for passengers and besides fares, benefits could be the deciding factor in which airline travelers choose to fly.
Southwest Airlines (LUV) – Get Southwest Airlines Company Report announced Thursday that its flight credits no longer have an expiration date, a policy that is first of its kind in the American airline industry.
“The more than 62,000 people at Southwest share a renewed pride in our unmatched access to flexibility that once again reshapes the landscape of hospitality and value in the industry,” said CEO Bob Jordan.
The new policy takes effect Thursday, July 28. Southwest customers will start seeing a placeholder expiration date of Dec. 31, 2040, on valid flight cards.
Flight credits for non-refundable fares will be issued as long as the cancellation is made just 10 minutes before scheduled departure.
The new policy is added onto Southwest’s existing two bags fly free, no exchange and no cancel fees, and non-expiring Rapid Rewards points policies.
“Flight credits don’t expire aligns with the boldness of a philosophy to give our customers definitive simplicity and ease in travel, just like bags fly free, just like no change fees, just like points don’t expire – they’re a first-in-our-industry combination of differentiators that only Southwest offers.”
Also on Thursday, Southwest reported its second-quarter net income more than doubled to $760 million, or $1.20 a share, from $348 million, or 57 cents a share, in the year-ago quarter. Excluding one-time items, Southwest earned $1.30 a share in the latest quarter. Revenue increased to $6.7 billion from $4 billion in the year-ago quarter. Southwest beat analysts’ expectations of $1.17 a share in earnings on revenue of $6.69 billion. Shares are down nearly 11% so far this year.
What Is Southwest Airlines Offering?
In May, Southwest introduced Wanna Get Away Plus, its first new fare class since 2007.
It has a number of features, including one that customers have been asking to have.
If your flight is canceled, or your plans change, you can transfer flight credits — which Southwest calls “travel funds” — for a future flight, or you can give them to another traveler.
But you will both have to be Rapid Rewards Members.
Wanna Get Away Plus also comes with the ability to make same-day changes to a flight with no price difference in the base fare, if you get to the airport early and there’s a seat available on an earlier flight.
“With Wanna Get Away Plus, we’re thrilled to offer a new low-fare product that enhances Southwest’s fare lineup and provides more options for our customers, while maintaining all of the benefits our customers know and love about our existing fares, and even adding some new ones,” Jonathan Clarkson, vice president of marketing, loyalty and products for Southwest Airlines, in a statement.
