Northwest Airline’s “Match Southwest” Strategy
NWA says they’re going to match Southwest’s prices once Southwest comes into the MSP market.
Okay, fine. That may keep some NWA Worldperks mile-whores from switching but does little for anyone else.
Why deal with the Lindberg Terminal when you can use the much more accessible Humphrey Terminal (with the exception of the meandering LRT walk)?
Southwest isn’t a typical low-cost carrier. They’re not a cash-strapped start-up. Their costs are lower than NWA’s, so you can’t win a war or attrition against them.
And while Southwest is considered a low-cost carrier, assumptions regarding services included in the price of an airline ticket deserve another visit. Northwest tried to charge me $15 for my first bag and for a snack on my last flight. Does Southwest charge for those? No. So maybe Northwest really needs to undercut Southwest by $20/flight to truly match on price?
“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.”
Don’t underestimate Southwest, NWA.
October 25th, 2008 at 8:17 am
Totally agree with you. When booking our family vacation this winter we went with Air-Tran simply because it does not charge a baggage fee. Four people with one checked bag each (with children its going to happen) at $15 each way equals an extra $160. Maybe some people miss the extra charges but not a family with a budget.
October 25th, 2008 at 1:54 pm
Well, Southwest is only going to fly through Chicago at first. Great if you’re going to chicago but I’ll pay more to fly direct on NWA even with baggage fees. Especially if the difference is under 100 bucks.
That said, I’m happy they are coming here.