Southwest Air bucks peers with option to transfer ticket value

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Southwest Airlines Co. will shake up years of U.S. airline industry practice by letting customers transfer the value of a canceled ticket to someone else with little restriction. 

The option will be among a bundle of benefits on all but the least expensive of the airline’s four ticket categories, including a new one announced Thursday, that take effect this spring. The carrier expects the chance to transfer a ticket’s value to be popular with leisure as well as business customers, who have said in surveys that not being able to shift the value of a canceled ticket is a “pain point.” 

U.S. carriers have largely restricted the use of travel credits to original ticket holders. American Airlines Group Inc. and United Airlines Holdings Inc. only allow someone else to use a credit if it’s booked by the original passenger. For a Delta Air Lines Inc. credit voucher to be transferred, the recipient has to have been traveling on the same original reservation, according to the company’s website.

Southwest said the changes will be a “significant contributor” to expected pretax earnings of $1.5 billion next year from several initiatives it is undertaking but declined to be more specific. 

To transfer a credit, both people must be members of the airline’s Rapid Rewards loyalty program. The credit is good for 12 months from the time the ticket was booked.

Southwest on Thursday also said it would add a Wanna Get Away Plus fare category, betting that customers will be enticed to pay more from its lowest category to gain perks, including the ability to transfer a ticket’s value. The least-expensive level, Wanna Get Away, doesn’t have that option.

The move is a twist on changes made by other major carriers in recent years to add bargain-basement fares with restrictions meant to entice passengers to trade up. Dallas-based Southwest expects Wanna Get Away to continue as its biggest seller.