An article in the New York Times discusses the success of Southwest Airlines and the strategic challenges it faces in the future.
When journalists write about Southwest, they typically credit the company’s success to its low fares, and surely that is true to a large extent. But Southwest is hardly the lowest-fare operator out there.
However, maybe another key is how Southwest has linked “low cost” to something more emotionally relevant to its customers – the sense that “We care about you.”
This emotional connection is present in Southwest’s logo (with the heart), its advertising (which currently features Southwest employees “arresting” employees of other carriers for charging criminally high baggage fees), and its customer service (they smile once in a while, and treat passengers like people rather than cargo).
So, yes, it will be important for them to keep their fares competitive, but it probably will be just as important for them to maintain a deeper emotional connection with consumers.