Southwest seeks fresh revenue direction with Tim Lyon as new pricing vice-president

Needing to shake up what critics say is a stagnant revenue model, Southwest Airlines has placed Tim Lyon in the newly created role of vice-president of pricing. The Dallas-based carrier said on 21 August that Lyon, who previously worked as director of domestic pricing at American Airlines and US Airways, ”is focusing additional attention on the carrier’s yield and pricing discipline”. ”Lyon brings more than two decades of airline industry experience and will oversee the carrier’s pricing department, coordinating closely with business units that guide revenue management and sales,” Southwest says. Attempting to regain its form as a consistently profitable company and reverse its sagging performance, Southwest said last month it would abandon its signature open seating model in favour of adding premium seating options. Southwest’s current pricing structure draws criticism from airline analysts such as Xavier Smith, director of research, energy and industrials at market research group AlphaSense. ”If you rewind the story, maybe 10 years ago or so, Southwest was the low-cost carrier,” Smith says. “They’re not the lowest-cost carrier anymore because of their maintenance cost, their system cost, their pricing. That’s their identity, but their prices aren’t the lowest for consumers, and that’s a problem,” he continues. “So I think the biggest issue is they need to change their cost structure – and that’s going to take a while.”<br/>