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VOL. 128 | NO. 98 | Monday, May 20, 2013

Local Demand Drives Southwest Service

By Jennifer Johnson Backer

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Memphis residents hope that Southwest Airlines Co.’s Nov. 3 arrival will bring more frequent flight service and lower fares.

Southwest Airlines’ service at Memphis International Airport, set to begin in November, will hinge on local demand and metrics like the number of local travelers who enroll in the airline’s customer loyalty program.

(Daily News File Photo/Lance Murphey)

But the Dallas-based air carrier’s commitment to Memphis is dependent on local demand and a few other lesser-known metrics.

Customer loyalty programs have become an important way companies spanning from Starbucks Corp. and The Kroger Co. to Target Corp. measure demand and expand market share. Many companies have invested in sophisticated technology that uses a shopper’s purchasing history to offer personalized deals.

Southwest is no exception. Like most air carriers, Southwest carefully measures local enrollment in its frequent flier program, Rapid Rewards, as one gauge of local demand. The company also measures customers who use its Rapid Rewards Premier Card from New York-based JPMorgan Chase & Co.

Jack Sammons, chairman of the Memphis-Shelby County Airport Authority, has encouraged residents who live in the Memphis area to sign up for both.

“You can’t manage a business that you can’t measure,” he said. “When they enter a new market, they are looking for metrics that they can measure to help define just how broad and deep their level of support is within a community.”

Sammons said strong local enrollment in the airline’s Rapid Rewards program coupled with customers who use the Rapid Rewards Premier Card will help welcome the discount air carrier to Memphis.

“Southwest has been very specific with me, saying they will watch these metrics on a routine basis to see if we are tracking northward,” Sammons explained. “It’s a free program and I strongly encourage everyone to sign up.”

Sammons said the airline hasn’t shared any specific figures on how many Memphis residents have signed up so far.

Southwest announced earlier this month it will enter the Memphis market Nov. 3 with daily nonstop service to five cities: Houston, Baltimore, Chicago, and Tampa and Orlando, Fla.

The air carrier is adding two new daily flights from Memphis to Houston and Tampa. The two new flights are in addition to previously announced flights from Southwest’s AirTran subsidiary to Baltimore, Chicago and Orlando that begin Aug. 11. Those flights also will operate under the Southwest brand beginning Nov. 3.

A recent survey by the consulting firm IdeaWorks Co. found that customers have the best chance of cashing in frequent flier miles or points with value airlines. The analysis, the fourth annual Switchfly Reward Seat Availability Survey, found Southwest was the best among the U.S.-based airlines, followed by JetBlue Airways, United Airlines, Alaska Airlines and American Airlines.

“Lower fare airlines benefit from the composition of their route networks. Most focus on short and medium haul flights, which often feature multiple daily flights,” according to IdeaWorks Co.

Delta Air Lines and US Airways tied for last place at No. 20.

“In all of my conversations with Southwest, they have said they are extremely excited about this new opportunity in Memphis,” Sammons said. “They are excited to provide robust service for the Memphis region. People here have been crying for that for generations. It’s incumbent upon people to support them when they arrive.”

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