Southwest, American Expand Offerings in Hunt for Business Flyers

(Bloomberg) -- American Airlines Group Inc. and Southwest Airlines Co. are trumpeting new efforts to cater to lucrative business travelers.

Southwest, which pioneered a discount strategy aimed at budget flyers, will give corporate travel managers greater control over bookings. American is wooing them with free preferred seats and priority access through security checkpoints.

The moves, announced Monday at the Global Business Travel Association convention in Chicago, highlight the competition to lock in contracts with corporate buyers that can guarantee certain amounts of flying, often in upgraded cabins. In addition, business travelers are typically willing to pay more for tickets to have the added flexibility of booking just before travel.

Southwest's expanded capabilities should be in place by mid-2020. The increased business from the initiative will add as much as $20 million to pretax earnings in the second half of next year, “with significant improvements expected in 2021 and beyond,” the Dallas-based carrier said in a statement.

The changes, enabled by new technology implemented over the past five years, provide increased access to Southwest's fares and flight schedules to travel managers, who gain the ability to make, change and cancel reservations. That's in addition to the carrier's existing policies that appeal to business travelers, such as flight changes with no penalty, and no charge for as many as two checked bags.

Distribution Partners

Travelport Worldwide Ltd. and Amadeus IT Group SA, which administer global distribution systems that handle ticketing, payment and other services, will work with Southwest to facilitate the transactions.

Southwest Business, the new name for the carrier's push, has updated its SWABIZ online booking tool, added more account managers across the U.S. and created a new business-to-business partner desk. Southwest, with its fare discounts, all-coach airplanes and no meal service, for much of its early history was more closely associated with leisure travelers.

American is trying to entice business flyers with preferred seating -- window and aisle seats usually close to the front -- at no charge, along with priority check-in, security processing and boarding for those booked under corporate travel accounts.

Such passengers also get help faster in re-booking when flights are canceled. The complimentary preferred seating will be available on American's website and mobile app.

The carrier introduced the stepped-up offerings with little fanfare in April, waiting until now to publicize them. The benefits are also offered now to corporate travelers on flights under its joint business alliance with British Airways, Finnair and Iberia, American said Monday. Additional benefits will be offered to the partners by early next year.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Susan Warren

©2019 Bloomberg L.P.