business news in context, analysis with attitude

by Kevin Coupe

Southwest Airlines long has gotten a lot of positive reviews in the media and among fliers for its lack of fees - especially not charging for luggage, a policy that has even been the focus of a broad ad campaign.

But now, the Wall Street Journal reports, "the chief executive of Southwest Airlines Co. hinted Thursday that the carrier could soon start charging for checked baggage if the flying public comes to accept the fees that other airlines charge ... Chief Executive Gary Kelly said the carrier has no plans to charge for bags at least through next year, in part because he believes its policy of two free checked bags per passenger brings the airline business.

"But, in one of his strongest hints to date that the policy could change, Mr. Kelly said that if fliers come to better understand and maybe even prefer 'an a la carte approach…we’d be crazy not to provide our customers with what they want'."

This is a statement worth parsing (will customers ever really "want" baggage fees?) and considering, since it challenges the notion of what the company has identified as a core value.

Not sure I have the answer to this. On the one hand, it might be a little awkward if Southwest changes a policy for which it is well and positively known. There easily could be consumer backlash. On the other hand, I'm the first guy to say that it is critical in any business to be willing to challenge so-called "core values," that these are often just policies with a lot of dust on them, that, as Mark Twain once said, "Sacred cows make the best hamburgers."

I do think that one thing seems obvious - that if Southwest does this, it'll be because management thinks that it will be better for Southwest, not better for customers. That's not necessarily the card I'd want to play.

Either way, it's an Eye-Opener.
KC's View: