Business Travel and Value: Comparing Prices and Convenience

Remember when everyone was up in arms about auto execs taking private jets to petition congress for bailout funds? Yeah, that was pretty bad. The thing is, the execs made what could be a compelling argument based on the value of their time and the wasted time involved in travel. Still, it was a PR loss. The perception of largess was far worse than the reality of the situation.

The same kind of thing happens with business travel on commercial airlines too. Today, a friend told me they are a “Southwest company.” As in, they only fly Southwest airlines. I know other Southwest companies too. It is worn as a badge of honor representing fiscal responsibility.

I don’t buy it.

In my opinion, it is more an indication of Southwest’s marketing success than of a company’s frugality. The typical Southwest flight isn’t much (if any) cheaper than a Delta or American flight. However, the average Southwest flight can be more time consuming and inconvenient.

I regularly fly between Nashville and Salt Lake City. As an example let’s say I want to go to Salt Lake for Monday through Friday two weeks out. Delta can get me there for $415 (or nonstop for $494). The cheapest I can fly on the same days on Southwest is $502. A Business Select ticket on Southwest is $946. You can take a nonstop flight in first class on Delta for cheaper than you can get there on Southwest in a Business Select seat. Granted, if you want to check luggage then the Delta ticket will go up by $50, but that is still cheaper than Southwest.

Maybe that is just a weird route. Let’s try some other cities I have been to in the past couple of years. Big cities like Los Angeles, New York City, Chicago, San Francisco, and Miami. Also, smaller cities like Wichita, Sacramento, New Orleans, and Austin .

Note: I chose these cities randomly based on places I have flown. Most of those flights were actually on American Airlines, so hopefully that removes some sample bias.

Let’s run the numbers:

Southwest Delta ?
Los Angeles $425.80 $433.30 -7.50
New York City $397.80 $336.40 61.40
Chicago $159.40 $217.80 -58.4
San Francisco $564.80 $379.30 185.5
Miami $326.80 $426.80 -100
Wichita N/A $559.30 N/A
Sacramento $557.80 $520.50 37.3
New Orleans $207.40 $249.80 -42.4
Austin $369.30 $256.30 113

Based on this sample, flying Delta averages out to be about $25 cheaper. If you choose to check luggage then the Delta flights average about $25 more. With an average ticket price of just over $350 it comes out to about 7% of the ticket price. If you figure that you spend about $1000 for that week’s hotel room then we are talking about a difference of less than 2% of the week’s travel bill. Add in per diem, airport transportation, etc and it just gets smaller. This is a pretty negligible difference no matter how you look at it (and if you don’t check bags then the difference is really in Delta’s favor).

So maybe Southwest’s reputation as a fiscally responsible business travel choice is more perception than reality.

The thing is, for business travel, Southwest can be much less convenient. Having an assigned seat is huge if you want to work on the plane. I almost always have an exit row isle seat. This means more legroom (aka laptop screen room) and more elbow room (aka I can type). I also know what my working environment is ahead of time so I can plan. If I show up a little late, I still get my same seat and my plan isn’t disrupted.

Since I fly a bit, I sometimes get free upgrades to first class. You have no idea what a productive environment that is. Every programmer’s dream is a big comfy chair with someone bringing them unlimited snacks and caffeinated beverages (and many flights have WiFi these days). But that is mostly a creature comfort perk. There are other perks that more directly save time. Priority baggage handling and priority phone numbers to name a few. Perks that make life a little easier day-to-day, but are REALLY helpful when planes start getting grounded and delays start piling up. To my knowledge Southwest doesn’t provide these perks to frequent flyers.

If you fly enough, you are bound to end up in a situation where a storm is grounding flights or your plane has mechanical failure at the gate. When this happens every passenger on your flight is scrambling for a way to get to their destination. A long and slow moving line starts forming to talk with the gate agent. Frequent fliers skip the line, call the priority number, and get rebooked on the next plane. If they fly standby, they are at the top of the list. This can be the difference in missing an important meeting or not. It has happened to me multiple times.

So, if Southwest isn’t actually cheaper, but Southwest does end up taking more of your time, how is that a good thing for business travel? What exactly is the tradeoff? Is the appearance of frugality really worth it?

I was told growing up that there is a difference in “cheap” and “inexpensive”. It seems to me that for business travel, Southwest is cheap, but not really inexpensive.

On Friday I will be flying from LA to Nashville with Erica. We will both be sitting in First Class. We won’t have to pay to check our luggage. We can board whenever we want. We will be fed a full meal and get free drinks (any drinks). If there is a problem with the plane we will be first in line for the next flight out. All for the low price of a Southwest ticket (except the plane says Delta).

As an aside, people looking for cheap tickets will often go to a site like Priceline.com or Kayak.com. You won’t find Southwest on those sites. Is that because the other airlines don’t want Southwest on there or because Southwest likes the perception of being cheaper without actually participating in comparison shopping? My feeling is that if Southwest was cheaper they would provide comparison shopping right on their site like Progressive Auto Insurance.

Want to travel like a road warrior? Here are are some helpful sites I recommend:

  • Seat Guru – Pick the best seat on the plane. Not all seats are created equal.
  • Flyer Talk – Learn the ins and outs of each airline and frequent flyer program.
  • Flight Aware – Track flights. See the average on-time stats for a particular flight. You can also find direct flights from one city to another (across all airlines).
  • TripIt – Easily keep all of your travel plans in one place. They have an excellent iPhone app too. You can just forward emails from airlines, hotels, rental cars, etc to plans@tripit.com and they will sort it all out.

3 thoughts on “Business Travel and Value: Comparing Prices and Convenience”

  1. I love Southwest. Their ability to use customer experience and brand to enhance their customers’ loyalty while increasing their own profit is a model that resonates with me.

    But I love good analysis even more. Nicely argued.

  2. If you check a suitcase and a second suitcase full of folding bike, SWA is saving you $75 and the feeling of being nickled and dimed to death by an industry that’s struggling to look less expensive than it really is.

    I’ve found the only way to get stuck with a crap seat on SWA flights is to check in in person instead of online and end up with a deep-into-the-C’s boarding number. Even the back of the B group gets a window or aisle.

    Not saying Southwest is perfect, but overall it seems like their people actually like their jobs and thus that they give a crap about their 100% coach class customers.

    But I don’t do high-stress business travel and don’t fly much in general. And I like Southwest’s reservation system a lot more than the other guys. Honestly, sometimes I fly SWA just because their pricing is so transparent: here’s the flights, here’s the price for each direction, we promise not to screw you for flying one way instead of round-trip, etc.

    (Don’t tell Justin Davis, but I think I just said Southwest gets my business because their website’s UI/UX is so good.)

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