Southwest's Stance on Fees Could be Problematic

(MoneyWatch)  There was a very interesting piece in this week's PlaneBusiness Banter (if you aren't a subscriber, you should be) on how Southwest is backing itself into a corner with its stance on not charging any fees. It was certainly a thought-provoking piece that hints about problems to come for the airline.

I've written about Southwest's efforts before. While other airlines are racing to add as many fees as they can, Southwest has proudly drawn a line in the sand and said that it won't be playing this game. But as Holly Hegeman notes in the Banter, this is a dangerous game to play for an airline that needs to increase its revenues.

The only way this bet is going to pay off for Southwest is if they can snare enough passengers away from other airlines who are charging additional fees.

That's a scary bet. And one that frankly, doesn't look that good.

As much as people hate fees, it seems that people are starting to accept them as a fact of life. This doesn't mean that all fees are acceptable, but Southwest probably could get away with some if they ever decided they wanted to. Could they charge for a second bag? How about a fee for booking over the phone? Yeah, they could, but they've taken away their flexibility to do that by focusing on not having any fees in all their marketing. It would be a lot harder to institute any new fee now.

As a customer, I love the marketing campaign, and I love what Southwest has done. I'm glad that they're trying to hard to avoid fees, and it makes for a great experience. But looking at the bottom line, I can see how this could cause problems down the road if they decide to reverse course for any reason.