Southwest Airlines has built its business model on mostly all-inclusive fares.
On the plus side, the airline continues not to charge for checked bags or carry-on luggage. That's a pretty major perk given that its chief rival, JetBlue, still charges for checked bags, and low-cost rivals Spirit and Frontier charge for both checked and carry-on bags.
By not charging for bags or seat assignments like its rivals, Southwest Airlines (LUV) -) has stood out in an industry that has increasingly become known for nickel and diming customers. The airline, however, has not completely resisted taking part in that troubling industry trend.
Related: Southwest Airlines Makes Another Passenger-Unfriendly Change
Back in March, Southwest tweaked its online WiFi pricing. Instead of passengers paying $8 for an entire day of internet service — including multiple legs for people taking nondirect flights — the airline began changing $8 per flight segment.
That change penalized customers who already faced the inconvenience of having to make a connection (or multiple connections) to get to their destinations.
Now, the airline has raised another key price that's sure to irritate some customers.
Image source: Patrick T. Fallon / AFP
Southwest raises alcohol prices
During the days when passengers had to wear masks due to covid, Southwest stopped serving alcohol on its flights. The airline also simplified its nonalcoholic beverage choices so passengers could order with a finger without taking off their masks.
Once federal law stopped requiring masks, the airline brought back its alcohol service. When it returned, the airline charged $7 for hard liquor. On Nov. 15 that price increased to $9 per drink. Beer prices were $6 before the change and now they will cost at least $7.
The airline also sells High Noon Hard Seltzer and Dogfish Head Strawberry Vodka Lemonades as "Beyond Beer" options, which will rise to $7 from $6.
"The wine options include Cruset Brut sparkling wine, Carmenet Cabernet Sauvignon, Mossel Bay Chenin Blanc Chardonnay, and Stone Cellars California Rose. Southwest will soon be charging $8 for any of these offerings," SimplyFlying reported. Wine previously started at $6 per glass.
Southwest pointed out in a media statement that it has not raised prices since 2018.
"Upon review, we made the decision to implement a modest change to the pricing of our alcoholic beverages, which will go into effect on Wednesday, Nov. 15," Southwest said in a statement shared with media.
On flights of more than 175 miles Southwest offers free water, soda, coffee, tea and hot chocolate, as well as apple juice and orange juice.
Southwest looks to increase nonfare revenue
Southwest has been open about its efforts to raise nonfare, or ancillary, revenue. Chief Commercial Officer Ryan Green addressed the matter during the company's third-quarter-earnings call.
"Ancillary revenue is significantly outpacing our passenger growth, largely on the back of our upgraded boarding benefit," he said. "We've been able to increase prices there and hold on to take rates. EarlyBird as well is a strong performer."
Southwest sells the right to board earlier in a number of ways. That includes EarlyBird, which checks customers in earlier, and Business Select, which sells the first 15 spots in the A boarding group. In addition, those spots can be purchased at the airport on flights that have not sold out their Business Select seats.
"We've been able to increase price rate — or prices on EarlyBird, as well as some of our other ancillary products that went into effect in August. We raised prices on excess bag fees, pet fees, things like that," he added.
These added fees are helping the airline overcome weaker demand.
"Ancillary absolutely is a standout, and I think I'm expecting it to continue to exceed passenger growth in the fourth quarter," Green shared.
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