The $15 you fork over at the airport to check a suitcase helps a financially ailing airline’s bottom line. Perhaps it persuades some families to drive instead. But can this $15 — and the other fees airlines are piling on — be prompting passengers to switch airlines?
That, at least, is what some fee-less airlines are reading into September passenger traffic figures. All U.S. carriers aggressively pushed cheap fares this summer to fill seats. They largely succeeded, even if profits suffered. For much of the industry, traffic last month fell off, as vacations wound down and most legacy airlines cut seats from their networks. The bulk of U.S. airlines are likely to report losses for the summer, quarter while a few are expected to show small profits.
But there were a couple of notable outliers in the traffic data for last month: Southwest and JetBlue saw outsize traffic gains. Southwest reported an 8.8 percent increase in revenue passenger miles (RPM), while JetBlue saw a 9.8 percent jump in passenger miles. (An RPM is a standardized industry metric of one paying passenger flown one mile.) Southwest’s load factor, the percentage of seats that were filled, surged more than 11 percentage points from a year ago, to 74.7 percent — a stunning increase for a month in which schools reopen and summer vacation travels stop.
“That was an incredible load factor,” says Stifel Nicolaus analyst Hunter Keay, considering that Southwest for years had September loads of 60 percent to 67 percent. JetBlue’s load factor rose about one percentage point from the prior year, to 77.6 percent.
Southwest and JetBlue are also the most prominent airlines to eschew first-checked-bag fees.
Wall Street Favors Airline Bag Fees
“You’re starting to see that connecting of the dots” between bag fees and traffic, contends Kevin Krone, Southwest’s vice-president for marketing and sales….