Southwest Airlines “Freedom From Fees” Policy Helps Boost Its Share of Online Tickets Sold Directly By Major Airlines

Majority of Consumers Deem Additional Travel Fees Unacceptable, According to Comscore Study

However, Nearly Half of Consumers Say They Would Welcome A New “A La Carte” Pricing Structure

RESTON, VA, October 8, 2008 – Comscore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released the results of a study of online ticket sales at the U.S. sites of leading airlines as well as consumer attitudes toward airline fees. The study found that Southwest sells nearly 2.5 times the dollar volume of online tickets at its site as its nearest competitor. From the second quarter of 2007 through the same period in 2008, Southwest Airlines has expanded its leading share of online ticket sales made directly at airline sites by 4.8 points, according to Comscore’s passively-observed online behavioral data. While Southwest has long positioned itself as an economically priced airline, part of its growth in share coincides with the imposition of additional fees for services such as checking luggage and in-flight beverages charged by the majority of the competing suppliers. Meanwhile, Southwest Airlines has launched a marketing campaign promoting its “Freedom from Fees” policy.

*Does not include ticket sales made at online travel agency sites (e.g. Expedia or Orbitz)

“Charging additional fees for checked bags, meals, blankets and other services previously included in the cost of a ticket has received significant media attention and has been widely unpopular among consumers who, in today’s economy, have become increasingly price sensitive,” said Kevin Levitt, Comscore vice president. “Southwest Airlines appears to have successfully differentiated itself through its marketing position of ‘no hidden fees,’ effectively bolstering its online ticket sales and increasing its market share.”

As Prices Rise and Fees Mount So Does Consumer Dissatisfaction

Given the current state of the economy and the rising cost of fuel, many consumers understand the challenges faced by top airlines but disagree that the cost burden should fall on them. The Comscore survey found that 80 percent of respondents believe the rising cost of fuel is the reason for increases in airfares, but less than 40 percent feel that current pricing is fair. An even greater percentage of consumers oppose the additional fees policies, with only 7 percent of respondents saying they deem fees imposed after purchasing a ticket to be acceptable.

The survey also asked consumers about their willingness to pay additional fees for a range of services and amenities. Consumers indicated they were least likely to pay for a pillow or blanket (82 percent said they are somewhat unlikely or not at all likely to pay for the amenity), the ability to book by phone (80 percent), a window seat (79 percent) or an aisle seat (77 percent). They said they were most likely to pay for oversized bags (24 percent said they were somewhat or extremely likely to pay), Internet access (20 percent), or a second checked bag (18 percent).

American Airlines Flyers Most Receptive to ‘A La Carte’ Pricing

While most airlines have implemented additional fee policies for select services, some are also considering an ‘a la carte’ pricing structure, charging a low base fare with additional costs for other services a traveler selects. American Airlines, for example, is reportedly planning to move to this pricing structure next year.

A recent Comscore survey of more than 1,000 airline consumers found that consumer sentiment toward the ‘a la carte’ pricing structure is relatively divided, with 49 percent of respondents in favor of this structure, 37 percent opposed, and 14 percent unsure or undecided. Interestingly, respondents who said they prefer to fly American Airlines were the most receptive to ‘a la carte’ pricing, with 57 percent indicating they were in favor of the policy and only 32 percent indicating their opposition to it. Those who prefer to fly Continental Airlines and Delta Airlines were less receptive to the policy, with less than half of respondents indicating they were in favor of it.

*Airline preference determined by response to the question: “Which one airline do you prefer to fly most frequently?”

About Comscore
Comscore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred source of digital marketing intelligence. For more information, please visit www.comscore.com/boilerplate.