Southwest says new fare will appeal to small and midsize businesses

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Southwest reported net income of $68 million in the fourth quarter and $977 million for all of 2021.
Southwest reported net income of $68 million in the fourth quarter and $977 million for all of 2021. Photo Credit: Southwest Airlines

Southwest's new fare product will bridge the gap between its cheapest Wanna Get Away fares and its Anytime mid-tier product. 

The carrier plans to add the product around the middle of year, chief commercial officer Andrew Watterson said during Thursday's Q4 earnings call. Watterson said the product will appeal to small- and medium-size businesses, but he and other Southwest executives shied away from providing further details. 

"It's too early to give away exactly what the fare product looks like," incoming CEO Bob Jordan said. Jordan will take over the airline's top post on Feb. 1, following the retirement of Gary Kelly. 

Wanna Get Away fares include two free checked bags. There are no change fees and ticket holders who cancel travel get a flight credit that is good for 12 months. Southwest has no plans to reduce what Wanna Get Away offers.

The next category up, Anytime, offers those perks, plus refundability, free same-day flight changes and free same-day standby. Anytime flyers earn 10 Rapid Rewards points per dollar spent; Wanna Get Away flyers earn 6 points per dollar spent. 

Watterson said the new fare category will sit between Wanna Get Away and Anytime in terms of price and perks. 

Federal aid propels Southwest to 2021 profit

Southwest reported net income of $68 million in the fourth quarter. The carrier's operating revenue of $5.05 billion beat analyst expectations by $60 million, according to the investment website Seeking Alpha.  

The airline turned a profit despite a $30 million impact from the Covid-19 omicron variant in December. 

For the year, Southwest had a net income of $977 million, buoyed by $2.7 billion in federal payroll support.

Excluding the federal aid and other smaller items, the carrier would have posted a loss for the year of $1.3 billion. 
Looking ahead, Southwest expects a losing first quarter due to impacts from omicron. But Southwest projects a return to profitability beginning in March, with profits through the remainder of the year. 

Southwest now expects to fly 4% less capacity in 2022 than it did in 2019, a downward adjustment from its earlier plan to be approximately flat with 2019.

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