The “Bank of Southwest” restricting funds


No, it isn’t a real bank, but Southwest Airlines sortof operates like one with respect to their fares and change fees. How so? Buying a ticket is essentially making a deposit into that bank and the money in one’s account could be applied to any future ticket with the only limitation being the expiry of the funds based on the date of the initial deposit. The tickets themselves are non-transferable, but the value associated with them could be assigned to another passenger. This is no longer the case.

Airlines and their operations are governed by many different things, but when it comes to interaction with their customers the Contract of Carriage (“CoC”) is king. Regardless of what is mentioned in marketing materials, what an agent tells you or what you might think you are supposed to receive, it is the CoC that ultimately determines what will or will not happen. Airlines generally don’t tinker with their CoC very often and when they do it is generally a minor tweak. Southwest quietly issued an updated CoC last week, their 7th major revision in the company’s nearly 40 years of operations. Among other things, this change to the “Bank of Southwest” is included in the latest CoC update.

Refundability and Transferability of Funds

While the vast majority of tickets that Southwest sells are nonrefundable, the carrier makes it possible to “bank” the value of those tickets for future travel in case plans change. With the July 14, 2010 revision of the CoC a new phrase has been inserted into the clauses describing the value of these Ticketless Travel Funds (“TTFs”): “for the originally ticketed Passenger only.” The previous CoC §90(B) read:

Nonrefundable tickets – Passengers who purchase restricted, nonrefundable tickets are not eligible for refunds…the fare paid for unused nonrefundable tickets, upon surrender of the usused ticket or portion thereof, or with the Ticketless Travel confirmation number and proof of purchase sufficient to Carrier, may be applied toward the purchase of future travel, without penalty, provided that travel is completed within the ticket’s eligibility period.

The new version §4(C)(3)(ii) reads:

Travel Credit. Unless otherwise stated by Carrier, the fare paid for unused nonrefundable Tickets, including taxes, security fees, and Passenger Facility Charges, may be applied toward the purchase of future travel on Carrier for the originally ticketed Passenger only.

Those six words have materially changed the way that Southwest customers should evaluate their future spend with the carrier, particularly if they take advantage of the no change fee benefit often. Previously one could book a ticket an know that, should the trip not actually happen, the value deposited in the Southwest TTF “bank” was available to be applied to any future ticket in any name. Now one must only apply those funds to travel in the same passenger name.

Although this policy is mentioned in the CoC dated July 14, 2010, notations on the Southwest.com website suggest that it will not be effective until January 28, 2011.

Animals in the Cabin

Although the carrier has permitted animals in the cabin as a matter of policy since mid-2009, the current revision of the CoC is the first that explicitly defines the rules surrounding this option. The details are included in §6(D) of the CoC. Included in these details are the fact that only five pets are permitted on any given flight and that carriage of pets is subject to a fee that is non-refundable.

Checked Baggage

The most recent CoC version includes another change that brings it in line with the currently enforced policies. The previous version states that passengers are permitted to bring up to three bags checked bags for free. The new version reflects the policy of only permitting two bags. It is a bit surprising that there hasn’t been discussion of folks trying to get the third bag for free given this policy and the fact that the CoC wins when there is any discrepancy in policies, but maybe the customers are just willing to accept whatever they are told. Either way, it is now codified in the CoC at only two bags per passenger.

UPDATE: Apparently there are more interim copies of the CoC floating around than I could find in my research and this change was codified previously.

Overall it is the change to travel funds credits that is most significant in this revision of the CoC. For folks who are paying attention to how they book and pay for their flights this could result in a change in booking patterns. It certainly would for me were I a frequent Southwest customer.

Want to read more in the CoC? The new version is here while the previous edition can be found here.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, LinkedIn and .

7 Comments

  1. Seth,
    I need to step in a bit and correct you. The “previous” CofC to which you refer is an old one. We’ve had 19 updates since the version you used. We changed to two bags on 1/29/2008.

    60. Free Baggage Allowance (Issued January 29, 2008; Effective January 29, 2008)

    Upon presentation by a fare-paying passenger of a valid ticket, Carrier will allow the following baggage to be transported without charge:

    A. Checked Baggage – Two (2) pieces of baggage, each piece of which having outside measurements (i.e., the sum of the greatest outside length plus the greatest outside width plus the greatest outside height) not exceeding sixty-two (62) inches, not weighing more than fifty (50) pounds per piece, and provided such baggage is checked for carriage in the cargo hold of the aircraft.

  2. Thanks for the correction there, Brian. I was going based on what I could find. Since the previous versions aren’t particularly easy to access I was doing my best.

  3. As a husband and father who HAS TO LIVE in another state for his job, to help support his family while his wife lives and works in other state, too far away to drive to/from, I can FULLY attest that THIS SUCKS ROYALLY!
    Often, if I can’t make a trip for some reason, I can at least get my family out to me later, or get my family out to see other family, or something similarly decent. Recently, a medical emergency has left me with three TTFs and just now I found out that I am SCREWED out of using them for my family to come to me instead of me going there, as of less than 3 months from now. Thanks for making an already stressful planning situation all the more, all for the almighty damned dollar!
    THERE IS NO REASON OTHER THAN $$$$$ for making this change. The airline is already running the others into the ground, so this coldly and calculatingly victimizes a minority, but significant, percentage of their customers as expendable “collateral damage.”
    Southwest is NOT nor should it EVER be a follower, but the leader that has made it what it is today. The morons with their shiny new MBAs (I have one, so I can mock them!) that are now running the show, who forget this critical history of their new company, will make it another piss-poor US Air in no time.
    In the meantime, my formerly rabid loyalty to Southwest has just expired along with my now-expired drink tix, my likely-to-expire TTFs and their expired planes in dire need of repair.
    Another one bites the dust…

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