Less is more: No-frills strategy proves effective for airline's Web site

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Throughout its 28-year history, Southwest Airlines has prided itself on being a no-frills airline devoted to keeping prices low and profits high.

Its Web presence fits with that corporate mantra.

Though the site may lack the graphic sophistication or sleek look of some competitors, it appears to be effective.

Southwest says more than 25% of passenger revenue in January came through its site. It's on course to bring in more than $1 billion in e-commerce revenue this year.

Deutsche Banc Alex. Brown estimates Southwest in 1999 booked 20% of its tickets online -- tops in the industry. Second-place Alaska Airlines had 13.8%; America West, 12%; and US Airways and Delta Air Lines, 7% each.

Online traffic figures easily top competitors. Media Metrix data show Southwest had the largest number of unique visitors in December among airline Web sites.

Its two URLs, southwest.com and iflyswa.com, generated 1.6 million unique visitors, 400,000 more than second-place American Airlines (aa.com) -- even though American carries more than double the U.S. passengers Southwest does.


Southwest has come a long way since it launched its first site in March 1995, the first major U.S. airline after Alaska Airlines to do so. (Southwest used the iflyswa.com domain to play off its 1-800-I-FLY-SWA reservation number. The airline later acquired the southwest.com URL and will use both.) The initial site had schedules and fares, but no e-commerce or ticketing options.

"We're certainly pleased with the results where we are, but I'm not ready to retire," says Kevin Krone, Southwest's senior director of marketing automation.

Not with e-commerce in the airline ticket buying arena exploding and the competition growing. Jupiter estimates $3.2 billion worth of tickets were sold online in 1999, the second-largest e-commerce category behind PCs. By 2003, airline ticket sales are expected to jump to $9.8 billion.

One reason: In November, four major airlines -- United, Delta, Northwest and Continental -- announced plans to launch a joint Web site, known as T2, that promises to offer fares available only on the Internet.

The site has a long list of associate members, but not Southwest. Mr. Krone says Southwest opted not to join in order to keep "a direct relationship" with its customers.

An effective site is perhaps more crucial to Southwest than some competitors because the airline has only a basic booking agreement with the Sabre system used by travel agents to book flights. Sabre, which American Airlines' parent AMR Corp. is in the process of spinning off, provides only limited information on Southwest, including availability and schedule information, but not in real time. Southwest participates in Sabre's Travelocity, but not in any other travel sites.

Last year, the airline redesigned its site with developer Avrea Foster, Dallas, to speed and ease use.


The airline added other features -- one allowing members of its frequent-flier Rapid Rewards program to check credit balances at the site, and another that lets prospective employees send resumes electronically. Rapid Rewards members get double miles for booking online.

Analysts continue to criticize the site on one point: Southwest refuses to accept e-mail from consumers, something most other major companies already do. The airline says everyone who writes a letter to the airline via old-fashioned mail gets a personal response, and it doesn't want to jeopardize its reputation by running the risk of being deluged by so many e-mails it can't personally respond to them.

"Are they alone on the Internet in finding this to be a challenge?" asks Rick Bruner, VP-interactive marketing research at consultancy IMT Strategies. "Certainly not. Every large Web site worth its salt is getting hundreds of thousands of e-mails a day."

High-flying Southwest needs to deal with it.

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