Transportation

Apparently, Analysts Want Southwest to Charge for Luggage. Passengers Do Not.

Dallas-based Southwest Airlines releases its third-quarter financials tomorrow. Will the numbers go up? Dunno. Down? Could be. Hard to say. Kind of like whether Southwest is gaining passengers or losing money because it refuses to charge for luggage. BusinessWeek -- which spoke with Kevin Krone, Southwest's vice-president of marketing and sales -- says today that it's a little bit of both:

The Dallas-based company says it has commissioned several comprehensive market studies that show the public has not accepted baggage fees, even as it pays them. Company officials also believe that passengers are still sorting out the idea that not every airline charges a fee for luggage and they believe Southwest ultimately will benefit as public awareness spreads. "If [bag fees] were accepted, then I think we'd have to think really hard about it," Krone says. "But our research shows that people are upset by [fees]. It is emotional. It's hard to avoid it."
Meanwhile, over at Seeking Alpha, there are all kind of charts and graphs that compare and contrast Southwest, American and Continental. The spoiler:
There is no evidence to show Southwest's competitors lost passenger traffic as they increased add-on baggage fees. The real question should be how many hundreds of millions of dollars is Southwest giving up by not joining the crowd? Southwest typically gets credit for being more of an industry leader than a follower. This time, Southwest needs to do some catching up.

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Robert Wilonsky
Contact: Robert Wilonsky