Southwest to start charging ‘no shows’ who don’t cancel flights

Sun file photo

Southwest Airlines planes sit at McCarran International Airport.

Southwest Airlines

A Southwest Airlines passenger jet is shown at a gate at McCarran International Airport on Dec. 9, 2011. Launch slideshow »

Dallas-based Southwest Airlines, the busiest air carrier at McCarran International Airport, rode record first-quarter revenue and moderated fuel prices to post a profit that narrowed from a year ago.

The company also announced a new “no-show” policy in which passengers who fail to arrive for a departure on time and don’t cancel their flights will forfeit the amount they paid for the ticket on the airline’s least-expensive nonrefundable fares.

The new policy takes effect for reservations made or changed after May 10 for travel on or after Sept. 13.

Southwest will continue its long-standing policy of offering credit without a change fee on future flights if a reservation is canceled, but it will no longer offer that credit if a reservation isn’t canceled on the airline’s Wanna Get Away and Ding! fares.

The new policy doesn’t affect refundable fares, which generally are more expensive, and the airline’s military and senior fares or travel during unusual circumstances like severe weather conditions.

In this morning’s conference call, Southwest Chairman and CEO Gary Kelly emphasized that the policy change is not an added fee but is geared toward giving the airline the opportunity to resell a seat. He said some of Southwest’s competitors have raised cancellation fees to $200 a ticket.

Southwest, which has an average 213 daily flights to and from McCarran and a 44.6 percent market share of the number of seats on flights to Las Vegas, reported earnings of $59 million, 8 cents a share, on revenue of $4.08 billion for the quarter that ended March 31. In the same quarter a year earlier, the airline reported net income of $98 million, 13 cents a share, on revenue of $3.99 billion.

Earnings beat analysts’ expectations by 5 cents a share.

The 2012 quarter had one extra day because of Leap Year, and the Easter and Passover holidays fell in the second quarter that year.

Kelly said the record revenue and better-than-expected cost controls resulted in the favorable quarter.

The airline expanded its routes beyond the continental United States in the quarter, with its first flights to San Juan, Puerto Rico, and moderated fuel costs through a fuel-hedging program helped keep the airline’s expenses down.

“Passenger revenues were boosted significantly by continued progress on the AirTran integration, fleet modernization efforts and the Rapid Rewards loyalty program,” Kelly said in a release issued with the earnings announcement today.

Kelly said April revenue trends are soft, but May and June bookings are favorable for the airline.

The company is projecting continued stable fuel prices.

Although Southwest did not serve as many passengers as it did in the first quarter of 2012 and load factors — the percentage of paying passengers — were down slightly, revenue climbed because the average fare was up 3.8 percent, the airline added six seats on its newer Boeing 737 jets and added more fuel-efficient planes to the fleet.

In addition, the airline collected $207 million, a 2 percent increase over last year, in charter and ancillary revenue.

Southwest added a charge for open premium boarding positions at the gate and it increased the cost of its EarlyBird Check-In charge.