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Southwest Airlines

How Southwest Airlines Remains Free of Fees

Every seasoned traveler knows that when her flight search yields nothing but expensive options, she should head to Southwest's website for its fee-free flights. At a time when most airlines are contemplating how they can cut costs and are paring down their flight schedules and overhead, Southwest is actually boosting its presence in some cities. As with everything airline related, it all comes down to fuel: While other airlines are struggling for profit, Southwest has actually earned profit through its fuel hedging contracts.

The contracts allow Southwest to purchase 80 percent of its fuel at $61 a barrel — yesterday crude oil was trading at $126 a barrel and at one point it reached $147. Talk about a lucrative bet! Their contracts expire in 2012, though every year a smaller percentage of their fuel will be covered. When the time comes they'll need another clever hedge to keep them from the same troubled destiny as the other big airlines.


Join The Conversation
marketleverage marketleverage 9 years
I recently took a flight to Denver on Southwest and the service was better than any other airline. The flight attendants were willing to get stuff out of the overhead bin for us. They came around multiple times offering us drinks and fairly large snacks. All of the seats were leather on the plane I was on. We were fortunate to get the first row so we had a huge amount of room for our legs. The flight was several hundred dollars cheaper than any other airline as well.
LaLaLaurie06 LaLaLaurie06 9 years
If only they flew non-stop to St. Louis from New Jersey.
krrn krrn 9 years
i really like southwest. i was supposed to fly down to visit my dying uncle a few weeks ago but unfortunately he died a few days before i was supposed to go. well i was flying air tran and i had to call and switch the departure date so i could go to his funeral which took pretty much all day and cost a lot of money. when i got to the airport the next day, air tran told me that they had overbooked the flight and that i couldn't get on but they could get me a flight the next morning, which would've left me enough time to land and then speed to my uncle's funeral. well my aunt called me a few hours later and told me she booked me a flight on southwest. they were awesome, i just walked in and didn't have to wait for an hour to find out that i didn't even have a seat. so basically airlines suck but southwest saved the day. i actually really like their service and the fact that there is no assigned seating.. you can sit next to whoever you want and not some random stranger. other airline companies should follow southwest's example.
hippiecowgirl hippiecowgirl 9 years
Southwest is usually my first choice when I'm flight-hunting. I used to be a loyal Delta customer, but I flew SW when someone else made the flight reservations and I've never looked back. The no-frills doesn't bother me. I still find the planes to be very comfortable and the staff has always been very courteous.
javsmav javsmav 9 years
wow, they are still in the contract?! I fly SW a lot because they are cheap, the only airline that flies direct from my city to my parent's city, and they used to have a partnership with ATA--which had service from DCA to MDW & I go to Chicago at least once a month, so I got sucked into SW's great frequent flier program (8 trips to Chicago can earn me a free flight to California). But recently SW has gotten just as ridiculously expensive. I assumed it was the high gas prices. Are they just charging more b/c other airlines are? Because I don't understand how 2 years ago a RT ticket cost around $100 and now it's $350. I need to just move to Chicago--I can't afford this long distance relationship.
verily verily 9 years
Southwest is also no frills. No meals on flights (just snacks), no assigned seating, no in-flight entertainment, narrow seats. But if you're ok with that, then it's great. I used them 2 weeks ago to get to Philly and back. $79 one way and $119 the other (the $79 flight was sold out) for a total of $225 with taxes. The total was far cheaper than what I could get with Continental before taxes/fees.
tiff58 tiff58 9 years
Why no one else can successfully follow South West's business model is beyond me.
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