Rapid Rewards at Southwest Airlines Case Study Southwest Airlines prided themselves on their commitment to customer service and equality by offering a streamlined business model with an emphasis on simplicity and efficiency that has remained the same for the most part since the airlines’ inception in 1967. At the time of the case study, Southwest had been profitable for the past 28 years, an achievement many airlines are incapable of boasting due to the volatility of the airline industry. One of the unique policies that Southwest employs is their ‘single-class service,’ where seats are not assigned, and those who check in first board the plane first and have their pick of available seating. In order to improve and maintain …show more content…

A common complaint Southwest received from frequent fliers was their lack of flexibility when it came to flight changes in regards to restricted tickets. In an effort to maintain their ‘classless’ system, even Rapid Rewards Members were subject to paying extra to make up the difference in ‘restricted’ and ‘unrestricted’ fares when changing flights, or waiting for the next available seat within their ‘restricted’ fare-class, which may result in having pass up multiple flights that only had ‘unrestricted,’ full-fare seats remaining. If Southwest were to change their policy regarding restricted tickets bought by frequent fliers and allow them to take the next flight that offered an empty seat regardless of the fare restrictions, it would remove the entire purpose of the unrestricted/restricted fare dichotomy, which is to charge a discounted rate for those who are willing to take a less incentivized option. This would also then compromise the egalitarian values that define the Southwest brand as a whole, and possibly alienating customers loyal to the brand. The economic importance of frequent fliers is the concept of repeat customers being cheaper and easier to maintain in comparison to the acquisition of new customers. Maintaining a steady flow of frequent fliers results in maintaining a steady flow of revenue, one which is acquired at a much cheaper cost than