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Southwest knows more than we do

Tweet [1]

Both Bryan Caplan [2] and David Friedman [3] think the purpose of boarding pass numbers is to get the people on the plane more quickly. They both want the people in the back to get on first.

They are surprised that the last row doesn’t board first. This would seem to speed up the boarding process. (Though maybe not [4].)

This reminds me of my students telling me that it’s stupid for Fedex to send all packages to Memphis (or some other hub). Fedex knows that when a package goes from Fairfax, Virginia to Richmond, Virginia via Memphis, it is traveling farther than if the package went directly. Evidently, there is some other saving that is obvious to them and not obvious to us. For the answer, go here [5] and listen at the 25 minute mark.)

They used to board in reverse order (last rows first) on almost every airline. One problem was monitoring. People would cheat and board before their row was called.

But I doubt that was the only problem. The reason I say that is that Southwest never did it that way. Southwest let people board in groups and the groups were unrelated to your seat. Your group just determined where you sat. And then I noticed other airlines started copying Southwest. They had boarding "groups" that were unrelated to where your seat was.

Southwest has thought about this more than Bryan or David. They have a lot of money at stake. So there is something else going on. What is it?

It even gets weirder because now Southwest has people board in order within the groups. So if your boarding pass says A10, you board before someone who is A25. It used to be all the As just lined up and an A25 could board before an A10 if the A25 was eager enough. Now you can’t, or at least you’re not supposed to.

Why?

Why would it benefit Southwest to have people line up like that? And why might it benefit travelers? The Southwest method would seem to punish travelers.  When other airlines were calling out "Rows 25-28 can now board," Southwest induced eager passengers who wanted to make sure there was luggage space for their carry-on (or who wanted to make sure they got an aisle or a window) to stand or sit on the floor rather than remaining in their seats in the lounge. That discomfort lowered the well-being of Southwest customers. That lost well-being cost Southwest something.

One answer (I first saw this at Vox Baby [6]) is that Southwest passengers arrive earlier and are less likely to miss their flight or delay a flight as people board at the last minute. At Southwest, you get there early to get a decent seat. Fewer late flights means more cost savings for everybody either in time or lower fares.

But I think there is another reason given Southwest’s new system of precise ordering within each group. The basic idea is simple–now it gives everyone an incentive to get their boarding pass early. That in turn gives Southwest information. Why is this valuable? I’m not sure. Perhaps it gives them more info on whose likely to travel rather than cancel. Because now, it’s not just enough to get your boarding pass by say midnight the night before. Now people are careful about getting their boarding pass 23 hours and 59 minutes before the flight. Now the earlier the better.

The other possibility is that this gives Southwest a chance to make money. Southwest now has some premium service that lets you pay a little extra and guarantee that you’re in the first ten people on board. (You also get a free drink). Peace of mind for those folks who are anxious about luggage space or getting an aisle seat. More money for Southwest. Maybe lower fares for everyone or at least higher profits for Southwest.

Southwest knows more about its business than you do. If it looks like madness, there is probably a method in it.

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