October 10, 2001 9:55 PM PDT

Southwest turns to Net to cut costs

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In a gamble to cut "every discretionary cost," Southwest Airlines said it will rely on the Internet, not "snail mail," to reach its most loyal and profitable customers.

Like other airlines, Southwest Airlines had turned to the U.S. Postal Service to communicate with its frequent-flier club members, called Rapid Rewards Members. Airlines depend on these customers, typically business travelers who pay higher fares, to boost profits.

But citing the need to cut costs in the aftermath of the events of Sept. 11, Southwest is eliminating mailings of quarterly statements, newsletters and promotional offers to frequent-flier club members at least for the remainder of the year.

Instead, it is asking members to sign up for an e-mail list to receive updates, including promotional offers, news and the latest word on "security and airports issues."

"By signing up for this new e-mail list, you will be doing your part to keep our costs down during a very critical time in the airline industry," Southwest President Colleen Barrett said in a letter being mailed to members.

By Southwest's own admission, depending on the Internet for communications with its most loyal customers is a gamble.

"For those of you who don't have Internet access (incidentally, I am one of you!), I apologize for having to take you out of the loop, if you will, but I assure you that we would not take this step unless it was absolutely critical to our economic well being," Barrett said in the letter.

So far, Southwest is the only airline to drop snail mail for electronic communications for frequent fliers. But to its credit, Southwest is among the most successful airlines at selling tickets on the Internet.

Analysts said Southwest's move will be watched as a small but tangible sign of the Internet's growing, or waning, influence.


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