Southwest to raise ancillary fees in 2013

Washington DC
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Southwest Airlines will increase existing ancillary fees and introduce new charges in 2013, in a new revenue opportunity that is expected to add $100 million next year.

The carrier's chief commercial officer Bob Jordan says in an investors day presentation today that the new fees will go into effect on 13 February 2013. More details will be announced by the airline tomorrow.

The fee changes are expected to contribute $100 million in incremental revenue in 2013, with an annual run rate of $150 million to $175 million, says Jordan.

Among the fees that Southwest is increasing is a charge for overweight baggage, which will go up to $100 from $50 currently. The airline, which now allows each passenger to check two bags for free, will also increase its fees for the third checked bag and beyond.

In addition, Southwest will charge more for its priority check-in service, called EarlyBird Check-In, which will go up to $12.50 each way from $10 currently.

The airline will also begin selling "premium boarding positions" that are still available at the gate, says Jordan. Southwest does not assign seat numbers to passengers, but travellers can currently obtain priority boarding through the purchase of higher fares and the EarlyBird Check-In service.

Later in 2013, Southwest will unveil details of a no-show fee that will be applied to its most restrictive fare classes. Calling this an "industry standard", Southwest chief executive Gary Kelly says this will allow the airline to re-sell a seat that a traveller will not be flying on.

He adds, however, that this new no-show fee is "not ready for prime time". "It will be months before we are ready to unveil this for our customers," he adds.