During the darkest days of the covid pandemic, grocery stores and retailers like Walmart (WMT) -), Target and Costco offered few promotions or discounts.
They did not need to cut prices because everyone needed the same things, and those things were in short supply.
If you have to limit how many bottles of hand sanitizer and how many rolls of toilet paper or paper towels people can buy, then you can charge higher, not lower, prices. Costco (COST) -), Walmart, and Target (TGT) -) admirably did not take advantage of those shortages.
DON'T MISS: Exclusive: Southwest Airlines passengers should be very worried
Yes, prices were higher on many items, but that was because supply-chain problems increased costs for those retailers. In some cases the biggest retailers took thinner profit margins so their customers didn't have to bear the entire inflation burden.
The travel industry — especially airlines — faced a different problem during those miserable covid-lockdown days. Few people had a reason to travel, so planes were empty, causing airfares to drop.
Over the past year, that has corrected itself. Delta, United, Spirit, Frontier, American (AAL) -), and other U.S. airlines saw demand jump. That led to higher prices, and to the airlines being able to pass their increased fuel costs onto customers.
Now, that demand seems to be flagging, and the rest of the year into early 2024 seems like a soft period for the entire industry. That's not something an airline like Southwest Airlines (LUV) -) will communicate to customers directly. Saying "hey, we have a lot of empty seats, so prices are low" gives consumers an advantage.
Southwest, and really every airline, protects that information and runs sales even when they're being very selective about which discounts they offer.
A business does not want customers to know it's hurting for business, but Southwest's latest promotion suggests it wants to entice people to fly a lot between now and the end of November.
Image source: Paul Hennessy/SOPA Images/LightRocket via Getty Images
Southwest offers a rare deal on its biggest perk
Airlines use loyalty programs to keep customers flying with them. If you know you can earn certain perks, it makes sense to pay a little more or fly a slightly less convenient itinerary. When a perk is out of reach, however, that incentive is removed.
The highest-level benefit in Southwest Rapid Rewards is the airline's companion pass. Normally, getting one takes 100 one-way flights or 135,000 qualifying points. That's a tough bar to reach for most fliers -- but the airline has an enticing promotion for Rapids Rewards members who are chasing that goal.
"Southwest Rapid Rewards Members who register for this promotion, purchase Southwest qualifying flights, and travel through Nov. 30, 2023, can earn double Companion Pass qualifying points on all qualifying flights," the airline said.
"Business travelers booking through one of Southwest's business channels — swabiz.com, Global Distribution System, or Southwest Partner Services distribution channels — can earn triple Companion Pass qualifying points per flight during the same promotional period."
Earning a Companion Pass enables you to designate a single person who can fly with you for free during all of 2024. (It's not completely free, as Companion Pass tickets cost a $5.60 booking fee as well as any applicable taxes and fees.)
Southwest rarely offers easier ways to earn a Companion Pass, as it can be a very expensive perk for the airline to hand out. Offering this promotion suggests that the airline sees a need to fill seats not just this year but into (and maybe through) 2024.
The airline is also offering the same double-points bonus to its credit card holders.
"Rapid Rewards Credit Cardmembers who register for this promotion can earn double Companion Pass qualifying points per $1 spent with their Rapid Rewards Credit Cards from Chase, now through Nov. 30, 2023," the airline said.
Action Alerts PLUS offers expert portfolio guidance to help you make informed investing decisions. Sign up now.
