GRAND RAPIDS, MI – Southwest Airlines executive Ron Ricks had a friendly and direct message for several hundred business travelers who attended his luncheon speech to the Economic Club of Grand Rapids on Monday, Oct. 27:
“Use it or lose it.”
The celebrated “Southwest Effect” has lowered airline ticket prices in the 14 months since the airline began serving the Gerald R. Ford International Airport.
Ricks said the Dallas-based carrier expects customers to reap the benefits as their competitors strike back and cut their prices to match Southwest. Without those benefits, Southwest will fly to more fertile airfields, he said.
So far, the Grand Rapids airport is meeting their expectations with a 20 percent share of the market, the folksy executive vice president and chief legal and regulatory officer for Southwest said. With Southwest's 25 percent share of the national market, there's room to grow, he said.
“To be successful, the business community must support Southwest Airlines,” Ricks said. “We could not ask for anything more from this community except for a little more business travel.”
Southwest came to Grand Rapids last year after a concerted pitch by the Regional Air Alliance of West Michigan, a group of business leaders who wanted to do something about the local airport’s relatively high airline ticket prices.
One year after Southwest arrived, the average ticket price had fallen by 7 percent as its competitors lowered their prices to match Southwest’s low-price model.
Flights from Grand Rapids -- once ranked second highest in the nation -- now rank 21st on the list, said Dick DeVos, who assembled the alliance that lured Southwest to West Michigan. “We have been very fortunate to have Southwest come and be part of our community,” DeVos said in his introduction for Ricks.
After rattling off a list of some 30 airlines who have gone out of business or filed for bankruptcy since Southwest started in 1971, Ricks told the audience at the JW Marriott’s International Ballroom: “This is a really, really hard business.
During his speech, Ricks drew applause as he mentioned the airline’s “bags fly free” marketing campaign and its decision not to impose charges when a customer changes a flight time.
“We don’t think our customers like to be nickeled and dimed,” he said.
Southwest’s unique boarding system, which cues up its passengers by seat assignments in advance of boarding, was developed early on so the airline could get more flights per day out of its fleet, Ricks said.
Today, as the only large airline not to have gone through Chapter 11 bankruptcy, Ricks said they are reluctant to change the formula.
Southwest also does not participate in many of the online ticket vendors because they tend to become liquidators for seats that have not sold, Ricks said. Southwest has successfully managed its inventory of available seats through its own website, he said.
RELATED: Southwest Airlines' 1-year anniversary at Ford Airport marked with lower fares
Jim Harger covers business for MLive/Grand Rapids Press. Email him at jharger@mlive.com or follow him on Twitter or Facebook or Google+.
Source: southwest - Google News http://ift.tt/1zL9rHU
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