Wednesday, April 14, 2010

Airline Travel: The Idiot Fare

My unsolicited and biased opinion follows:

Let me start by making it clear that Southwest Airlines is, by far, my favorite airline. For the average, non-business, non-elite status flier, it's not even close. As you'll see below, they even cater quite well to idiots.

The airline offers multiple tiers of fares to purchase, ranging from their somewhat secretive "Ding" promotional fares to the high end "Business Select" fare. The latter offers the perks of being fully refundable, making you one of the first to board, getting a free drink, and receiving extra Rapid Rewards credits.

These are all seemingly nice incentives, but the Business Select is an Idiot Fare. Here's why.

The Business Select price is typically immensely more expensive than other available fares. By immensely, I mean $600 more expensive on a typical cross-country round trip flight. But what about all the perks? Let's grade them.

Priority Seating - SWA doesn't offer first class. They don't even offer assigned seats. It's all one big open-seating economy cabin. The exit rows offer better leg room, but that's about as posh as it gets. So the opportunity to board first doesn't really get you anything more special than the person boarding 10th or even 30th. You'll all have a window/aisle seat and plenty of overhead bin space. The others will just be slightly further back, unless you opted for a mid-cabin exit row. And you can still be the 10th or 30th person to board if you purchase the cheapo fare and if you are either on the A-list (16 round trips per year) or check in online exactly 24 hours before departure. Oh, and if your flight acts as a mid-trip stopover from an earlier city, then all of the good seats will already be taken before you even board and your priority will mean nothing. Perk Grade: D

Fully Refundable Fare: Hey, travel plans change, especially in business. That's a nice perk, right? No. While other airlines will charge you a fee of $100-150 to change your flight in addition to any differences in fares. Southwest charges $0. On top of that, all canceled or unused money from a ticket becomes credit towards a future Southwest Flight, good for one year. After a year, there's a $50 fee. That's it. Pretty low risk. Perk Grade: D

Free Drink: Two free drinks for a round trip = $8 <<<< $600. Perk Grade: F

Extra Rapid Rewards Credits: Ok, this is the real reason to use the Idiot Fare, right? Let's do the math:
Typical one way "wanna get away" fare: $150 for 1 credit.
Typical one way Idiot Fare: $450 for 2 credits.
Perk Grade: F

Adding it all up, you're paying $300 each way for about $154 in "perks."

And that's why this fare is so brilliant.

Nobody but an idiot would choose this as the best option. Luckily, business travel involves lots of idiots. There are 3 (maybe 4) situations where this fare is purchased:

1. The passenger is an idiot, and through poor planning frequently makes last minute flight purchases when this fare is the only one available. I'd say this accounts for 20% of the cases.

2. The passenger works with/for idiots and is subjected to last minute changes outside his/her control. 60% of the cases.

3. The passenger has an idiot for a boss and uses these flights to pad his or her rapid rewards account, thereby earning free flights faster and spending more time away from the idiot boss who somehow keeps approving these expenses. 15%.

4. An actual, unforseen emergency happens and the passenger has never heard of lastminuetravel, kayak, or any of the other dozen discount fare sites. 5%, and I'm being generous.

A lot of cases probably involve a combination of 1-3.

In closing, bravo to Southwest for realizing the untapped market of idiots out there and using these fares to boost profits and lower costs for the reasonable travelers.