Thursday, April 12, 2007

Southwest eyeing unbundling

Southwest Airlines may be eyeing unbundling some of its services in a bid to achieve its 15% annual earnings growth, which may not be possible through ticket sales alone. The airline did trial assigned seating in the summer of 2006 in select cities and got mixed customer reviews. In addition, the airline has stated that it won't have a reservation system that can handle assigned seating until 2009. The airline has portrayed an image of the customer-friendly airline that does not charge for such services, even poking fun at rivals who do so. However, it may have to change its offerings if it wants to continue its growth pattern. The challenge is identifying those services that customers value and are willing to put cash on the table to purchase.

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