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Topic: WN Effect Running Its Course?
Username: Triple7Lr
Posted 2013-02-11 07:52:16 and read 7600 times.

According to the AJC passengers in ATL haven't experienced any decline in prices and in some cases have experienced increases.

http://www.ajc.com/news/business/sou...in-carriers-first-year-in-a/nWLbn/

Topic: RE: WN Effect Running Its Course?
Username: Cubsrule
Posted 2013-02-11 08:08:20 and read 7524 times.

WN fares have long been higher than FL fares in similar markets. The inability to drive revenues has long been one of FL's problems. I'm not sure how this is news.

Topic: RE: WN Effect Running Its Course?
Username: Av8rDAL
Posted 2013-02-11 08:11:25 and read 7512 times.

"The Southwest Effect"
...term was coined in 1993 by the U.S. Department of Transportation to describe the considerable boost in air travel that invariably resulted from Southwest's entry into new markets, or by another airline's similar activity (Ritter) . Southwest offered dramatically lower air fares than established airlines that usually enjoyed a near-monopoly in the communities.
Source: Wikipedia

Understandably, this is not as noticable in ATL due to the already existing saturation of major markets by DL and already having FL as an established LCC keeping many fares very competitive. AirTran began West Coast flying with a couple leased A320s prior to taking delivery to their first B737-700 in 2003. ATL-LAX could then be done for $99 one-way, when previously this was a $400-600+ roundtrip flight on Delta, plus junk, plus Saturday night stay, etc.

So AirTran has already given ATL much of its "Southwest Effect" years ago.

The Effect would be more noticable in smaller cities getting new service from WN which were previously only served by one or two legacy carriers serving different hubs with RJs.

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-11 08:11:25 and read 7510 times.

Quoting Cubsrule (Reply 1):
WN fares have long been higher than FL fares in similar markets. The inability to drive revenues has long been one of FL's problems. I'm not sure how this is news.

Yeah exactly. Anyone with half a brain wouldn't expect fares to go down in ATL. A hub for a large LCC is already pretty much at its low point for air fares.

Topic: RE: WN Effect Running Its Course?
Username: bobloblaw
Posted 2013-02-11 08:40:40 and read 7369 times.

Quoting Triple7Lr (Thread starter):
According to the AJC passengers in ATL haven't experienced any decline in prices and in some cases have experienced increases.

Yup, because FL had LOWER costs and thus charged lower fares. Surprise surprise Clark Howard, WN isnt the savior everyone thought it would be for ATL.

WN's rising costs have put a damper on the "Southwest Effect" not just in ATL but everywhere they fly.

Topic: RE: WN Effect Running Its Course?
Username: LHCVG
Posted 2013-02-11 08:45:26 and read 7336 times.

Quoting bobloblaw (Reply 4):
WN's rising costs have put a damper on the "Southwest Effect" not just in ATL but everywhere they fly.

Especially as they continue moving into the big business airports instead of the outlying ones - doubt you see many sub-$50 fares at DCA and LGA.

Topic: RE: WN Effect Running Its Course?
Username: Cubsrule
Posted 2013-02-11 08:45:57 and read 7337 times.

Quoting bobloblaw (Reply 4):
Yup, because FL had LOWER costs and thus charged lower fares.

Are you suggesting that FL could have sustained a higher fare level but chose not to? If so, FL has some 'splainin to do to its shareholders.

Topic: RE: WN Effect Running Its Course?
Username: B747forever
Posted 2013-02-11 08:47:39 and read 7314 times.

Quoting LHCVG (Reply 5):
Especially as they continue moving into the big business airports instead of the outlying ones - doubt you see many sub-$50 fares at DCA and LGA.

You barely see any sub-$50 fares anywhere in their system. The new lowest price seems to be $59 on a few select routes.

Topic: RE: WN Effect Running Its Course?
Username: 0NEWAIR0
Posted 2013-02-11 08:53:44 and read 7257 times.

Quoting Triple7Lr (Thread starter):
According to the AJC passengers in ATL haven't experienced any decline in prices and in some cases have experienced increases.

Higher fares and less competition on routes were known side effects before the acquisition was finalized. This should be no suprise to anyone that was even kinda-sorta-maybe paying a little bit of attention when the acquisition was first being discussed.

Topic: RE: WN Effect Running Its Course?
Username: Revelation
Posted 2013-02-11 08:54:00 and read 7255 times.

Quoting bobloblaw (Reply 4):
WN's rising costs have put a damper on the "Southwest Effect" not just in ATL but everywhere they fly.

That, plus the "low hanging fruit" of under-utilized outlying airports has long since been picked. As above that term was coined in 1993, twenty years ago. Nowadays we see WN putting metal into quite saturated airports, ATL being one of them.

Topic: RE: WN Effect Running Its Course?
Username: Cubsrule
Posted 2013-02-11 09:05:58 and read 7186 times.

Quoting Revelation (Reply 9):
Nowadays we see WN putting metal into quite saturated airports, ATL being one of them.

True, but we do see an effect on fares even in the saturated markets. Look at the drop in average fare on CHI-MSP in late 2008/early 2009, for instance.

Topic: RE: WN Effect Running Its Course?
Username: grain
Posted 2013-02-11 09:13:38 and read 7132 times.

The only problem is that when they has sub 50 dollar fares, a barrel of oil was 20 dollars.

Topic: RE: WN Effect Running Its Course?
Username: par13del
Posted 2013-02-11 09:18:17 and read 7083 times.

A question, is it not a fact that the combined carrier has been lowering service in and out of ATL?
If accurate, how exactly would you expect to see the WN effect, the reductions may actually work in, allowing DL to increase fares.

Topic: RE: WN Effect Running Its Course?
Username: LHCVG
Posted 2013-02-11 09:25:50 and read 7045 times.

Quoting B747forever (Reply 7):
You barely see any sub-$50 fares anywhere in their system. The new lowest price seems to be $59 on a few select routes.

Agreed, I was just making the point that those airports among others aren't places where WN is going to offer many cheapie specials at those prices.

Topic: RE: WN Effect Running Its Course?
Username: kcrwflyer
Posted 2013-02-11 09:42:17 and read 6956 times.

Quoting ouboy79 (Reply 3):
Yeah exactly. Anyone with half a brain wouldn't expect fares to go down in ATL.

Most people aren't willing to pay enough attention to things to be aware of that.

Quoting Cubsrule (Reply 1):

WN fares have long been higher than FL fares in similar markets.

And everywhere.

Quoting bobloblaw (Reply 4):
Yup, because FL had LOWER costs and thus charged lower fares. Surprise surprise Clark Howard, WN isnt the savior everyone thought it would be for ATL.

WN's rising costs have put a damper on the "Southwest Effect" not just in ATL but everywhere they fly.

                 
Imagine that.

Quoting LHCVG (Reply 5):
Especially as they continue moving into the big business airports instead of the outlying ones - doubt you see many sub-$50 fares at DCA and LGA.

WN wishes that airport costs were the bulk of their operating costs. That guy loading bags at LGA for $25 dollars an hour is a much larger problem for WN than whatever they may be paying for gates/rent/slots.

Topic: RE: WN Effect Running Its Course?
Username: bobloblaw
Posted 2013-02-11 09:46:03 and read 6926 times.

Quoting Cubsrule (Reply 6):
Are you suggesting that FL could have sustained a higher fare level but chose not to? If so, FL has some 'splainin to do to its shareholders.

The lowest cost carrier is the price leader generally. Youre assuming that demand for FL's product is price inelastic. Thus raising fares results in more revenue. From being a fairly loyal FL traveler, I'd say their customers are quite elastic in demand. Thus a hefty fare increase across the board would result in LOWER revenue.

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-11 10:22:16 and read 6808 times.

Quoting kcrwflyer (Reply 14):
WN wishes that airport costs were the bulk of their operating costs. That guy loading bags at LGA for $25 dollars an hour is a much larger problem for WN than whatever they may be paying for gates/rent/slots.

So you are saying someone shouldn't be paid well for sticking with the same company, in a position that obviously takes a physical toll, for over 10 years (the top out point)?

Of course there are some areas of productivity that needs to be improved, but after 40 years of consecutive profitability, I don't think the guy on the ramp is the main problem. Put WN's contracts in place at the other carriers and see how well it matches up at that point. There is something to be said about continuing to be profitable and having the highest compensation in the industry.

Quoting par13del (Reply 12):
A question, is it not a fact that the combined carrier has been lowering service in and out of ATL?
If accurate, how exactly would you expect to see the WN effect, the reductions may actually work in, allowing DL to increase fares.

It has come down some but I still think it is around 180 departures a day, combined.

Quoting B747forever (Reply 7):
You barely see any sub-$50 fares anywhere in their system. The new lowest price seems to be $59 on a few select routes.

Sub $50 fares seem to be reserved for the fare sales every few months. The one last week was $49 on nonstops under 500 miles, IIRC. They seem to pop up 3 or 4 times a year. FlyerTalk seems to have it down to a science for when the fare sales hit and how much they'll be.  

Topic: RE: WN Effect Running Its Course?
Username: JBAirwaysFan
Posted 2013-02-11 10:36:28 and read 6727 times.

Let's face it. Southwest is no longer the airline it was even 10 years ago. Their business model has changed, operating costs increased. You will usually find cheaper airfares on JetBlue than you would on Southwest.

Topic: RE: WN Effect Running Its Course?
Username: 0NEWAIR0
Posted 2013-02-11 10:48:54 and read 6669 times.

Quoting JBAirwaysFan (Reply 17):
You will usually find cheaper airfares on JetBlue than you would on Southwest.

There was actually a study done confirming this around 2007 or 2008 (it came out of Europe but it was concerning US market). It basically said that you are more likely to find the highest fare on SWA within 21 days of travel than you are for any other airline.

Topic: RE: WN Effect Running Its Course?
Username: kcrwflyer
Posted 2013-02-11 11:33:30 and read 6564 times.

Quoting ouboy79 (Reply 16):
So you are saying someone shouldn't be paid well for sticking with the same company, in a position that obviously takes a physical toll, for over 10 years (the top out point)?

Hang on let me read what I said................................(time elapsing)..................................Nope, didn't say that.

Quoting ouboy79 (Reply 16):
Of course there are some areas of productivity that needs to be improved, but after 40 years of consecutive profitability, I don't think the guy on the ramp is the main problem. Put WN's contracts in place at the other carriers and see how well it matches up at that point. There is something to be said about continuing to be profitable and having the highest compensation in the industry.

One guy isn't the main problem, but ten thousand of them adds up. Their labor costs are high. I'm not saying it's not great for employees. It is. I'm not saying employees don't deserve it.. I'm sure most do. All I'm saying, is that it is a high cost to them. Which isn't my opinion, it's a fact.

Topic: RE: WN Effect Running Its Course?
Username: srbmod
Posted 2013-02-11 11:46:10 and read 6518 times.

Quoting Cubsrule (Reply 6):
Are you suggesting that FL could have sustained a higher fare level but chose not to? If so, FL has some 'splainin to do to its shareholders.

I can tell you from experience that there have been times when I was checking RT fares on AirTran and Delta and the cheapest airfare and AirTran's cheapest fares for the flights I wanted to take were over $250 more than Delta because all of their cheapest fares at the time had already been sold. I bought the cheaper fare on Delta and have remained a loyal Delta flier ever since. Delta typically matches FL on flights out of ATL and many times, they charge a penny or two less than AirTran.

Another thing to remember is that AirTran has had routes in which for a number of years they had a monopoly on them and could charge whatever they wanted to and people gladly paid them as the other options were not as attractive. Delta eventually offered service to every FL market out of ATL (mainly using their Delta Connection carriers).

Anyone that thought fares in Atlanta were going to go down as the result of Southwest's entry into the market were kidding themselves. AirTran had been keeping the fares low out of ATL for years and WN wasn't going to cause the fares to drop any lower even if WN had not bought FL.

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-11 15:07:00 and read 6263 times.

Quoting kcrwflyer (Reply 19):
One guy isn't the main problem, but ten thousand of them adds up. Their labor costs are high. I'm not saying it's not great for employees. It is. I'm not saying employees don't deserve it.. I'm sure most do. All I'm saying, is that it is a high cost to them. Which isn't my opinion, it's a fact.

If the company can afford it, then what is the problem? Other than a few whining immature brats on a.net, I'm not really seeing a ton of crying anywhere else. Some loud investors here and there, but nothing overwhelming where they are wanting to take over the company.

Topic: RE: WN Effect Running Its Course?
Username: N908AW
Posted 2013-02-11 17:54:56 and read 6052 times.

Quoting ouboy79 (Reply 16):
So you are saying someone shouldn't be paid well for sticking with the same company, in a position that obviously takes a physical toll, for over 10 years (the top out point)?

I think what he was saying was that $25/hour makes it harder to be, you know, low cost. Irrespective of his deserving the pay, that's the way it goes. Southwest pays its employees well and that is one of many reasons that WN is no longer the cost leader in the market by a long shot (Hi, Spirit). But they seem to be fine with that.

Topic: RE: WN Effect Running Its Course?
Username: Cubsrule
Posted 2013-02-11 18:24:22 and read 5971 times.

Quoting bobloblaw (Reply 15):
From being a fairly loyal FL traveler, I'd say their customers are quite elastic in demand. Thus a hefty fare increase across the board would result in LOWER revenue.

I think that's right, and it is a problem with the FL business model. WN has historically been quite good at driving passengers in to higher fare buckets (i.e. making them purchase something other than the cheapest available ticket). Bringing that skill to FL will drive up average fares regardless of the cost difference between WN and FL. It's about more than just costs.

Topic: RE: WN Effect Running Its Course?
Username: jayunited
Posted 2013-02-11 19:27:01 and read 5837 times.

In the middle of the last decade WN had a huge effect on the U.S. airline industry especially from 2008-2010 when all the other airlines as a lot of exposure to the volatile fuel prices WN was largely protected due to their incredible hedges. During that time the other airlines tried to raise their ticket prices but the price hikes but it didn't work all the time because WN refused to follow suit. Those hedges along with their lower operating cost allowed WN to offer fares for anywhere between $29-$99 dollars one way the other majors could not match those fares which allowed WN to expand a lot because they along with the economy forced the other airlines to contract. The one example that I can think of is UA's DEN hub between late 2007 thru early 2009 UA was forced to the number of flights offered at DEN and WN saw an opening came in with force and exploited UA's weakness and although UA tried to match WN's fares UA couldn't match $39 dollar fares for a sustained period of time on all the routes that WN was starting up. Their hedges and their lower operating cost gave them a leg up on UA

But now that those hedges have expired and WN operating cost have gone up a bit what we saw last year was WN in some cases lead the charge on fare increases which the other majors were eager to match. I know I'm probably going to be crucified for this statement but I don't really think WN is a low cost carrier any longer. In some cases their fares are higher than those being charged by AA,DL UA or US on certain routes. So in my opinion WN ability to lower fares when they enter a market is no longer true in every market because they no longer have have the cost advantages that they had in 2008-2010.

Topic: RE: WN Effect Running Its Course?
Username: iowaman
Posted 2013-02-11 19:31:25 and read 6022 times.

ATL is a poor example to use as other's have said. FL already had low-fare stimulation in nearly all the markets WN is now flying out of ATL.

A good example of a soon to be "Southwest Effect" will be MCI-MSP that starts in about a week. DL pulls crazy fares on that route (my latest numbers show about $500 RT is the median fare), and DL will probably cut their fares at least by a third if not in half or more now that Southwest will fly it. Some other recent examples of how much WN lowers fares include some of the ex. PHL routes such as PHL-PIT/RDU where fares have went up several fold since WN has discontinued them.

The bottom line is WN keeps legacy airline prices lower, even if they themselves aren't the cheapest. Airlines like Southwest, Jetblue, Allegiant, Frontier, and Spirit tend to have the greatest benefit the general public from a price stand point.

[Edited 2013-02-11 19:41:06]

Topic: RE: WN Effect Running Its Course?
Username: n7371f
Posted 2013-02-11 19:46:01 and read 6011 times.

Southwest effect has been dead for several years now. Have to give them credit though, they have done an amazing job of convincing people they are the lowest air fare - when in reality these days Southwest is generally more expensive. So many suckers out there who just book Southwest not having a clue that Delta, United, American, etc...are much cheaper in many cases.

I'm beginning to think there's going to be a niche for a new low-coast airline in a few years than can pick up all of the short haul flying Southwest is abandoning with vigor. That WAS Southwest for decades. Not any more - costs are way to high for 200-300 mile runs.

Topic: RE: WN Effect Running Its Course?
Username: planespotting
Posted 2013-02-11 19:51:21 and read 6049 times.

Quoting Cubsrule (Reply 10):
Look at the drop in average fare on CHI-MSP in late 2008/early 2009, for instance.

I took multiple trips on that route during that time, and I never paid more than $200 r/t, and it was typically $150 or less.

For a more recent example, just look at the flights between DSM and ORD. Booking less than a month out for a Monday out and back (early morning flight to Chicago, evening flight to Des Moines) you get $276. Before Southwest, that would have been $700+ (typically closer to $1,000).

The Southwest effect can still happen, it just doesn't happen everywhere.

Topic: RE: WN Effect Running Its Course?
Username: bobloblaw
Posted 2013-02-11 20:39:11 and read 5852 times.

Quoting iowaman (Reply 25):
A good example of a soon to be "Southwest Effect" will be MCI-MSP that starts in about a week.

Good point.

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-11 21:12:54 and read 5630 times.

Quoting jayunited (Reply 24):
But now that those hedges have expired and WN operating cost have gone up a bit what we saw last year was WN in some cases lead the charge on fare increases which the other majors were eager to match.

If I remember right, Southwest led 3-4 fare increases last year and all were matched immediately. United attempted one fare increase, that Southwest refused to follow, and it was pulled back with in a week by UA, US, and I want to say DL matched it. The hedges may be gone, but they still have the power to control pricing in this country.

Quoting jayunited (Reply 24):
I know I'm probably going to be crucified for this statement but I don't really think WN is a low cost carrier any longer. In some cases their fares are higher than those being charged by AA,DL UA or US on certain routes. So in my opinion WN ability to lower fares when they enter a market is no longer true in every market because they no longer have have the cost advantages that they had in 2008-2010.

It really is mid ranged when you look at CASM, not air fare. Low cost carrier, in my opinion, is more in relation to their operating costs and not the costs that the consumer is being billed. WN's CASM last year was around 12.4 cents. Delta was around 13.8 cents, US Airways 13.6 cents, United 13.6 cents, Spirit around 10 cents, Fronter's doesn't really provide true CASM since all I can find is ex-fuel & specials...which is around 7.5 cents, jetBlue 11.5 cents, and Alaska is another that likes the ex-fuel CASM of 7.5 cents.

So really...their costs are lower, they can at times have higher fares, which means at the end they are pulling in higher margins and sustaining long term profitability. Can't complain about that.

Quoting n7371f (Reply 26):
Southwest effect has been dead for several years now. Have to give them credit though, they have done an amazing job of convincing people they are the lowest air fare - when in reality these days Southwest is generally more expensive. So many suckers out there who just book Southwest not having a clue that Delta, United, American, etc...are much cheaper in many cases.

It isn't dead, it is just that most markets are already saturated with lower fare carriers that it doesn't make as much of an impact. I would also argue that the Southwest Effect has morphed to where they still control pricing in this country (read above) and that means more than always having the lowest air fare.

Quoting n7371f (Reply 26):
I'm beginning to think there's going to be a niche for a new low-coast airline in a few years than can pick up all of the short haul flying Southwest is abandoning with vigor. That WAS Southwest for decades. Not any more - costs are way to high for 200-300 mile runs.

I wouldn't be shocked if that happened, especially with all the consolidation. I really think there is a market for a LCC using larger props to offer point to point service throughout the Midwest and Northeast, but that's just me.

Topic: RE: WN Effect Running Its Course?
Username: GSPflyer
Posted 2013-02-12 05:47:35 and read 4024 times.

The "Southwest Effect" is more prominent at smaller airports that they serve, such as GSP. Just looking at flights in May, a round-trip flight GSP-PHL-GSP (one stop each way, in MDW/BNA) will set you back $240, which is a pretty good deal. In the summer of 2009, before WN announced GSP, I think I remember paying $180 each way for a GSP-PHL flight on UA with a stop in IAD. If that was the case, it would be $360 round trip, so flying WN saves you ~$120 round trip. That's a lot of Philly Cheesesteaks!

Also, a non-stop GSP-BNA-GSP is about $55 each way.

Topic: RE: WN Effect Running Its Course?
Username: AmericanAirFan
Posted 2013-02-12 07:25:24 and read 3491 times.

AUS-SFO, AUS-SJC they match ALL the other airlines within a few dollars always being the cheapest though... When you add in all the other carrier's bag fees (with the exception of B6) WN is easily the cheapest to someone who isn't an FF....

I know on some markets they're not the cheapest, but I have seen them be very competitive on routes still.

Topic: RE: WN Effect Running Its Course?
Username: HPRamper
Posted 2013-02-12 07:26:14 and read 3474 times.

Quoting ouboy79 (Reply 29):
It really is mid ranged when you look at CASM, not air fare. Low cost carrier, in my opinion, is more in relation to their operating costs and not the costs that the consumer is being billed.

  
LCC is not the same as LFC, although the two are generally related.

Topic: RE: WN Effect Running Its Course?
Username: Av8rDAL
Posted 2013-02-12 07:50:54 and read 3319 times.

Quoting N908AW (Reply 22):
I think what he was saying was that $25/hour makes it harder to be, you know, low cost. Irrespective of his deserving the pay, that's the way it goes. Southwest pays its employees well and that is one of many reasons that WN is no longer the cost leader in the market by a long shot (Hi, Spirit). But they seem to be fine with that.

Southwest also has a very, very loyal following. When you have an airline that is unique with its product, and you have customers who are big fans of it, you have some elasticity with your revenue source, and people will pay up to fly with their favorite airline. Even if their rewards program doesn't offer first-class upgrades and status recognition in worldwide alliances, etc. etc.

Topic: RE: WN Effect Running Its Course?
Username: ScottB
Posted 2013-02-12 09:29:15 and read 3163 times.

Quoting n7371f (Reply 26):
I'm beginning to think there's going to be a niche for a new low-coast airline in a few years than can pick up all of the short haul flying Southwest is abandoning with vigor. That WAS Southwest for decades. Not any more - costs are way to high for 200-300 mile runs.

The problem with short haul (under roughly 250 miles) isn't just airfares. Post-9/11/shoe bomber/underwear bomber, flying has become more of a hassle, and higher speed limits make the personal automobile a more attractive alternative. Plus there's no need to rent a car or find a taxi at one's destination.

Quoting Triple7Lr (Thread starter):
According to the AJC passengers in ATL haven't experienced any decline in prices and in some cases have experienced increases.

From reading the article, though, it appears that the ATL market did see a decrease in average fares of just over 3%, while the rest of the nation saw airfares increase by slightly under 2%. That seems non-trivial when WN is only providing one or two percent of the total capacity at ATL.

Topic: RE: WN Effect Running Its Course?
Username: N908AW
Posted 2013-02-12 16:28:36 and read 2975 times.

Quoting Av8rDAL (Reply 33):
Southwest also has a very, very loyal following. When you have an airline that is unique with its product, and you have customers who are big fans of it, you have some elasticity with your revenue source, and people will pay up to fly with their favorite airline. Even if their rewards program doesn't offer first-class upgrades and status recognition in worldwide alliances, etc. etc.

Granted. I was simply speaking from a cost point of view. Differentiating/generating loyalty is a completely separate strategy.

Topic: RE: WN Effect Running Its Course?
Username: n7371f
Posted 2013-02-12 18:23:17 and read 2841 times.

Quoting ScottB (Reply 34):
The problem with short haul (under roughly 250 miles) isn't just airfares. Post-9/11/shoe bomber/underwear bomber, flying has become more of a hassle, and higher speed limits make the personal automobile a more attractive alternative. Plus there's no need to rent a car or find a taxi at one's destination.

Yeah that's a good point in many markets. But then I point to one like GEG-SEA where in the winter, the interstate can sometimes be closed and travel treacherous. Certainly your point is proven with the NE shuttle services. The TSA has hammered the viability of the shuttle routes just as Amtrak upped it's Accela service.

Topic: RE: WN Effect Running Its Course?
Username: EA CO AS
Posted 2013-02-12 18:33:35 and read 2842 times.

The "Southwest Effect" isn't just that average air fares come down in a given market; it's also (and primarily, in my opinion) the fact that their entry into a market actually CREATES demand that hadn't previously existed, and this stimulation is based on those lower fares.

Topic: RE: WN Effect Running Its Course?
Username: EaglePower83
Posted 2013-02-13 05:49:52 and read 2567 times.

Quoting jayunited (Reply 24):
I know I'm probably going to be crucified for this statement but I don't really think WN is a low cost carrier any longer. In some cases their fares are higher than those being charged by AA,DL UA or US on certain routes.

Completely agree.
My dad and many of my friends are Southwest fanatics.
I get crap all the time for flying AA.
"Why don't you fly SW? You should fly SW! They're awesome, super cheap!"

Haha....uhhh, no.

I fly regularly from Hartford to Chicago, mostly on holidays.
For kicks I'll shop SW's site, and on my routes they are routinely $50-150 MORE expensive than AA or UA.
Which means, my dad and friends who fly them exclusively, are likely paying fare PREMIUMS over what another airline is likely offering.
Plus, any miles earned with them can't go overseas :P
And I hate asking while boarding, "is this seat open? is this open? is anyone sitting here?"

NO thanks.

Topic: RE: WN Effect Running Its Course?
Username: Cubsrule
Posted 2013-02-13 05:58:35 and read 2556 times.

Quoting EaglePower83 (Reply 38):
Which means, my dad and friends who fly them exclusively, are likely paying fare PREMIUMS over what another airline is likely offering.

Of course, talking about Chicago in particular, I'll gladly pay a premium for MDW's more user-friendly facilities, much better on-time record and lower cancellation rate, not to mention not being stuck on an Eagle ERJ.

Topic: RE: WN Effect Running Its Course?
Username: FlyPNS1
Posted 2013-02-13 06:28:36 and read 2516 times.

Quoting EaglePower83 (Reply 38):
Which means, my dad and friends who fly them exclusively, are likely paying fare PREMIUMS over what another airline is likely offering.

And what happens when you fly AA and have to pay $100+ in bag fees, change fees, seat selection fees, etc? Will WN still be so expensive?

Topic: RE: WN Effect Running Its Course?
Username: Cubsrule
Posted 2013-02-13 06:33:57 and read 2499 times.

Quoting FlyPNS1 (Reply 40):
And what happens when you fly AA and have to pay $100+ in bag fees, change fees, seat selection fees, etc? Will WN still be so expensive?

  

The other thing is that it's a fallacy to suggest that WN has ever promised the lowest fares. What WN promises are low, fair fares, and I think WN still does a good job of delivering those.

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-13 08:34:06 and read 2343 times.

Quoting Cubsrule (Reply 41):
The other thing is that it's a fallacy to suggest that WN has ever promised the lowest fares. What WN promises are low, fair fares, and I think WN still does a good job of delivering those.

Not to mention fairly easy to understand. You aren't going to get raped if you just need to book a one way flights. People traveling that need open ended reservations are going to get ripped off on nearly everyone else because they still price based on round trip. Not to mention any other charge fees and such that will come into play on the return flight.

No WN isn't the lowest all the time, but the fare rules are probably the least complicated.

Topic: RE: WN Effect Running Its Course?
Username: Cubsrule
Posted 2013-02-13 08:45:46 and read 2314 times.

Quoting ouboy79 (Reply 42):
ou aren't going to get raped if you just need to book a one way flights. People traveling that need open ended reservations are going to get ripped off on nearly everyone else because they still price based on round trip. Not to mention any other charge fees and such that will come into play on the return flight.

I book a lot of one way trips, and I'm seeing more and more legacy fares that do not require a round trip purchase, even in cheap fare buckets. I recently bought a one way DL ticket (in L I think) BNA-CVG for less than $200.

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-13 10:02:02 and read 2241 times.

Quoting Cubsrule (Reply 43):
I book a lot of one way trips, and I'm seeing more and more legacy fares that do not require a round trip purchase, even in cheap fare buckets. I recently bought a one way DL ticket (in L I think) BNA-CVG for less than $200.

Ahhh nice. I was looking at some a couple months ago and the market I was looking in still required RT with the WN comparable fare. Good to see more moving away from it though, since it really is a stupid rule.

Topic: RE: WN Effect Running Its Course?
Username: Cubsrule
Posted 2013-02-13 10:39:54 and read 2199 times.

Quoting ouboy79 (Reply 44):
Good to see more moving away from it though, since it really is a stupid rule.

It is. These days, I think what differentiates WN is that their fare rules are very easy to understand since they only have three fare buckets, two of which (Anytime and Business Select) are equivalent as far as what we commonly think of as fare rules are concerned. The only differences between Anytime and Business Select relate to drinks, rapid rewards accrual and priority access to checkin and security (which is available to some folks for other reasons anyway).

Topic: RE: WN Effect Running Its Course?
Username: point2point
Posted 2013-02-13 11:21:10 and read 2159 times.

There is the consideration of what WN did in the DEN market, the 5th busiest airport in the U.S., and in the time frame below the 10th busiest airport in the world.

WN began service to Denver on Jan. 3, 2006, with 13 daily departures to three destinations. WN currently operates about 163 daily flights to 54 destinations from Denver, after 7 full years of operations, and going from 0% market share to 25% and being the second largest airline there.

However, the first two years of what WN did at DEN probably is the most impressive. In 2005, DEN reported 43,387,513 total pax. In 2007, after just 2 years of WN operation, DEN reported 49,863,352 total pax, for a numerical increase of about 6,476,000, or about 15%. WN Market share at DEN went from 0 to about 8% in those 2 years. Does anyone think that there will be another airport where this type of numerical increase can occur? ATL..... ? Maybe 2 years after the full integration of WN/FL at ATL there may be an increase of 6.5M pax..... but with WN's intent to cut..... maybe not?

Traffic operations in 2005 at DEN were at 567,632, and in 2007 there were at 619,941, for roughly a 9% increase. A couple of years ago, DEN was reported to have more flights and available LCC seats than any other airport in the world, ranking it #1 here. WN definitely contributed a large part to this distinction.


Fares at DEN were an average of $338.55 in Q4 2005, and dropped to $315.72 in Q4 2007, for a $22.83 drop, or 6.75% reduction. The national overall average for fare between 2005 and 2007 increased about 6%.

Lastly, DEN had a CPE of $13.13 in 2005. Since WN added pax, the mathematics of the CPE would make it go down (assuming all other components stay equal) and in 2007 the DEN CPE was $10.55, for a $2.58 drop per enplaned pax, or just about 20% reduction. Since pax enplanements would be half of the total 2007 number, we have roughly 25M enplaned pax here, and the reduction of $2.58 per pax saved all of the airlines at DEN some $65M in these costs.

Now...... does anyone think that what WN did at DEN in its first 2 years could be repeated on such scale? This one will be a "Southwest Effect" that will be difficult to top, IMHO.......

 

[Edited 2013-02-13 11:28:10]

Topic: RE: WN Effect Running Its Course?
Username: HPRamper
Posted 2013-02-13 11:49:39 and read 2109 times.

Quoting FlyPNS1 (Reply 40):
And what happens when you fly AA and have to pay $100+ in bag fees, change fees, seat selection fees, etc? Will WN still be so expensive?

The vast, vast majority of the flying public knows beforehand when they are going to fly, and do not need to change their dates or times...bring one bag and one carryon plus one personal item to limit bag fees, and don't pay anything to choose a seat (I've personally never paid a fee to choose my seat when booking online, and I've flown most of the domestic airlines).

Seems a bit overblown to sell those small perks as worth paying an extra hundred or even fifty per ticket. Going on a month-long sabbatical? Sure, fly WN and avoid the bag fees for bringing along your every possession, but for the usual weekend or weeklong trip, not so much an issue.

What I wonder is this: If the legacies often charge less than what WN does, why don't THEY advertise themselves as the "low fare leaders"? Are they afraid of starting a fare war with deep-pocketed Southwest?

Topic: RE: WN Effect Running Its Course?
Username: FlyPNS1
Posted 2013-02-13 12:39:55 and read 2062 times.

Quoting HPRamper (Reply 47):
bring one bag

Even one checked bag will cost you $50 extra roundtrip. For a family of four traveling on vacation, that's an extra $200 for the "pleasure" of flying a legacy airline.

Quoting HPRamper (Reply 47):
The vast, vast majority of the flying public knows beforehand when they are going to fly, and do not need to change their dates or times

Business travelers do it routinely.

Quoting HPRamper (Reply 47):
If the legacies often charge less than what WN does, why don't THEY advertise themselves as the "low fare leaders"?

Because they really aren't the low-fare leaders in many markets except for the advanced purchase fares. Once you get down to under 14 days, legacy fares start to rise significantly as they have to make up for the huge losses they incur on the cheap advanced purchase fares. When United wanted me to pay $922 for a last minute trip on DCA-CLE vs WN wanting $438 on BWI-CLE...it's pretty hard to advertise yourself as a low-fare leader.

The other problem is how do you keep all that marketing contained when legacies serve a ton of markets with little to no LCC competition and gouge those markets with sky-high fares. You think the folks that live in CVG would respond well to DL advertising itself as the low-fare leader when CVG pays some of the highest fares in the country?

Topic: RE: WN Effect Running Its Course?
Username: HPRamper
Posted 2013-02-13 12:57:13 and read 2041 times.

Quoting FlyPNS1 (Reply 48):
Even one checked bag will cost you $50 extra roundtrip. For a family of four traveling on vacation, that's an extra $200 for the "pleasure" of flying a legacy airline.

A family of four traveling on vacation, after the expenses of everything else on top of the airfare itself, will probably not bat an eye at $200....especially when faced with being split up when booking with WN (or they could pay the Early Bird fees...)

Quoting FlyPNS1 (Reply 48):
Business travelers do it routinely.

I get that, and that the bulk of front of the plane pax are business travelers. Most in Y are not business travelers. The simple reality is that most of the flying public on a daily basis is VFR or leisure travelers.

Quoting FlyPNS1 (Reply 48):
Because they really aren't the low-fare leaders in many markets except for the advanced purchase fares. Once you get down to under 14 days, legacy fares start to rise significantly as they have to make up for the huge losses they incur on the cheap advanced purchase fares. When United wanted me to pay $922 for a last minute trip on DCA-CLE vs WN wanting $438 on BWI-CLE...it's pretty hard to advertise yourself as a low-fare leader.

Again, only a small minority of the flying public books within two weeks and even fewer "last minute."

Quoting FlyPNS1 (Reply 48):
The other problem is how do you keep all that marketing contained when legacies serve a ton of markets with little to no LCC competition and gouge those markets with sky-high fares. You think the folks that live in CVG would respond well to DL advertising itself as the low-fare leader when CVG pays some of the highest fares in the country?

You limit marketing to the specific markets, although what DL is doing at CVG is nothing short of gouging.

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-13 13:44:57 and read 1977 times.

Quoting HPRamper (Reply 49):
A family of four traveling on vacation, after the expenses of everything else on top of the airfare itself, will probably not bat an eye at $200....especially when faced with being split up when booking with WN (or they could pay the Early Bird fees...)

Umm...what world do you live in? These days a family of four would still appreciate saving $200. Now if both parents are bringing in 6 figure salaries living in yuppyville, I could see where they wouldn't care. The majority of middle class America would still like to save as much as possible. Also this whole family being split up thing is a bit old. Flights crews will do everything they can to keep families together and I've yet to see everyone split up on the aircraft. If everyone checks in at the same time, chances are they will all be boarding at the same time.

Like has been said before, everyone has their favorite. Millions more of Americans pick WN for domestic travel than anyone else, but millions still pick those other guys. Everyone is comfortable with a certain level of service.

Topic: RE: WN Effect Running Its Course?
Username: Cubsrule
Posted 2013-02-13 13:48:27 and read 1971 times.

Quoting ouboy79 (Reply 50):
Also this whole family being split up thing is a bit old. Flights crews will do everything they can to keep families together and I've yet to see everyone split up on the aircraft. If everyone checks in at the same time, chances are they will all be boarding at the same time.

It's also a complete red herring for the 90 plus percent of us who have reliable internet access. Check in online anywhere close to 24 hours and you'll have at worst a mid-B boarding pass and no problem sitting together. Of course, those with the smallest children effectively have no worse than B1 because of family boarding.

Topic: RE: WN Effect Running Its Course?
Username: rwy04lga
Posted 2013-02-13 13:52:44 and read 1960 times.

Quoting FlyPNS1 (Reply 48):
Quoting HPRamper (Reply 47):
bring one bag

Even one checked bag will cost you $50 extra roundtrip. For a family of four traveling on vacation, that's an extra $200 for the "pleasure" of flying a legacy airline.

''Get the Delta Skymiles Card from American Express and you and 8 additional party members can get a first bag free when you fly Delta. That's a saving of $200 per roundtrip for a family of 4. Apply today!''   

Topic: RE: WN Effect Running Its Course?
Username: srbmod
Posted 2013-02-13 17:53:34 and read 1850 times.

Quoting FlyPNS1 (Reply 48):
Even one checked bag will cost you $50 extra roundtrip. For a family of four traveling on vacation, that's an extra $200 for the "pleasure" of flying a legacy airline.

Let's not forget that Southwest's AirTran subsidiary still charges for checked bags as well as other fees that Southwest doesn't (in fact, WN just announced that FL's checked bag fees are going up). Some have speculated that the reason why the integration of FL into WN is taking so long is because of the ancillary revenue that the fees on FL generate for the company and they want to milk it as long as they can. It's also been said that the reason why WN doesn't charge many of the same fees as other airlines is their CRS is not capable of handling such transactions. Southwest will be switching to Amadeus in the future and it probably isn't out of the realm of possibilities that they too could start charging for checked bags.

I'm curious if there has been a drop in passengers at BHM on WN as the result of their entry into ATL. For quite a few years folks would make the drive from the Atlanta area to BHM to fly on WN. There's even shuttle bus service between BHM and ATL and the company was worried about their business drying up once WN started service at ATL.

Topic: RE: WN Effect Running Its Course?
Username: Raddek
Posted 2013-02-13 18:24:04 and read 1824 times.

WN needs to connect DAY-MDW.

There are a lot of travelers who ask and darn near beg for MDW service from here. They are tired of paying high fares on AA and UA to ORD. I know WN isn't too keen on the short haul markets as much anymore, but this should have been a route added when DAY opened it's doors to WN. How can they not have service to their largest station?

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-13 18:52:56 and read 1782 times.

Quoting srbmod (Reply 53):
Let's not forget that Southwest's AirTran subsidiary still charges for checked bags as well as other fees that Southwest doesn't (in fact, WN just announced that FL's checked bag fees are going up).

WN's own fees (oversized/extra bags) increased as well...but some also decreased a bit. Everything is essentially uniform now between the companies.

Quoting srbmod (Reply 53):
Some have speculated that the reason why the integration of FL into WN is taking so long is because of the ancillary revenue that the fees on FL generate for the company and they want to milk it as long as they can.

I don't think it is wrong to say that as the FL network shrinks, and the code-share isn't wide spread yet, that ancillary revenue is helping to pay the bills on that side. Once the code-share kicks in completely, it becomes a mute point. If you book a flight on FL using the WN code-share you go by the rules of a WN reservation (opposite if book through FL - though you can't book a FL code-share if it is 100% operated by WN).

Quoting srbmod (Reply 53):
It's also been said that the reason why WN doesn't charge many of the same fees as other airlines is their CRS is not capable of handling such transactions. Southwest will be switching to Amadeus in the future and it probably isn't out of the realm of possibilities that they too could start charging for checked bags.

Which has been debunked about 83,000 times so far. LOL You can charge fees for UM, EarlyBird, extra bags, pets, etc...so it isn't the res system. Once Amadeus is rolled out I wouldn't expect anything to change.

Quoting Raddek (Reply 54):
WN needs to connect DAY-MDW.

There are a lot of travelers who ask and darn near beg for MDW service from here. They are tired of paying high fares on AA and UA to ORD. I know WN isn't too keen on the short haul markets as much anymore, but this should have been a route added when DAY opened it's doors to WN. How can they not have service to their largest station?

DAY-MDW has to be close to the same stage length as DTW-MDW, so I wouldn't rule it out from happening. The big thing is making sure it is a lot of O&D traffic and not connecting. I hope we start getting some more options out of DAY though.

Topic: RE: WN Effect Running Its Course?
Username: HSVflier
Posted 2013-02-13 22:02:00 and read 1678 times.

Quoting JBAirwaysFan (Reply 17):
Let's face it. Southwest is no longer the airline it was even 10 years ago. Their business model has changed, operating costs increased. You will usually find cheaper airfares on JetBlue than you would on Southwest.
Quoting 0NEWAIR0 (Reply 18):


There was actually a study done confirming this around 2007 or 2008 (it came out of Europe but it was concerning US market). It basically said that you are more likely to find the highest fare on SWA within 21 days of travel than you are for any other airline.

Couldnt agree more with the above statements. WN is not what they used to be, fares are always more expensive in my experience and their network is sub par when traveling to non major metro areas. I used to be a fan but they have gone down hill.

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-14 00:14:16 and read 1632 times.

Quoting HSVflier (Reply 56):
Couldnt agree more with the above statements. WN is not what they used to be, fares are always more expensive in my experience and their network is sub par when traveling to non major metro areas. I used to be a fan but they have gone down hill.

How have they gone down hill? Your comment about the network being subpar makes no sense - it has never been more extensive. So that can't be it. Now fares have gone up, I'll agree with that. There are still opportunities for lower fares (such as the $59/one way sale right now). Considering fuel prices, I guess we should be happy that fares aren't much higher all the time right now (not to mention taking into account inflation over time).

Topic: RE: WN Effect Running Its Course?
Username: FlyPNS1
Posted 2013-02-14 00:25:29 and read 1628 times.

Quoting HPRamper (Reply 49):
A family of four traveling on vacation, after the expenses of everything else on top of the airfare itself, will probably not bat an eye at $200

I've seen lots of people go out of their way just to save $10 on an airfare, but somehow you think they won't bat an eye at $200??

Quoting HPRamper (Reply 49):
.especially when faced with being split up when booking with WN

I've never seen it happen on WN. Compared to the legacies, you're much less likely to get split apart on WN.

Quoting HPRamper (Reply 49):
Most in Y are not business travelers.

Depends on the route and day of week. I've been on many flights where easily half the Y cabin is business travelers.

Quoting HPRamper (Reply 49):
Again, only a small minority of the flying public books within two weeks and even fewer "last minute."

Again, depends a lot on the route. There are plenty of routes where 30-40% of the cabin is booked in the last two weeks.

Quoting HPRamper (Reply 49):
You limit marketing to the specific markets, although what DL is doing at CVG is nothing short of gouging.

Tough for the legacies to do. How can DL advertise in LAX as the low-fare leader, if they are low-fare in some markets from LAX, but not others?

Topic: RE: WN Effect Running Its Course?
Username: HSVflier
Posted 2013-02-14 01:48:49 and read 1597 times.

Quoting ouboy79 (Reply 57):
How have they gone down hill? Your comment about the network being subpar makes no sense - it has never been more extensive. So that can't be it. Now fares have gone up, I'll agree with that. There are still opportunities for lower fares (such as the $59/one way sale right now). Considering fuel prices, I guess we should be happy that fares aren't much higher all the time right now (not to mention taking into account inflation over time).

If you would note i stated non major metro areas. Im sure there are some cheap fares in the super saturated NE market but when i have looked at fares, they have been more expensive then the legacy carriers on those city pairs the last few times i have booked.

Topic: RE: WN Effect Running Its Course?
Username: srbmod
Posted 2013-02-14 15:39:32 and read 1460 times.

Quoting ouboy79 (Reply 55):
Once Amadeus is rolled out I wouldn't expect anything to change.

Gary Kelly said in a recent interview with CNBC that WN at some point could start charging for bags.

'Never Say Never' on Bag Fees: Southwest CEO

While WN has not been one to typically run with the traffic, eventually they too will have to look into adding a checked bag fee in order to maintain profitability in uncertain times. If fuel prices spike significantly, they may have no other choice. That being said, they would probably do bag fees in a way so not to rock the boat with their customers. Maybe charge a lower price $10 or give you one free checked bag.

This isn't Herb's Southwest Airlines and even the industry as a whole has changed significantly in the years since he stepped down as CEO.

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-14 16:55:39 and read 1414 times.

Quoting HSVflier (Reply 59):
If you would note i stated non major metro areas. Im sure there are some cheap fares in the super saturated NE market but when i have looked at fares, they have been more expensive then the legacy carriers on those city pairs the last few times i have booked.

In most cases it is a couple markets like ECP, DCA, etc that get limited out of the super low fares...but everyone else is pretty fair game. You just need to know when to book, what dates to book, and looking out for the fare sales.

Quoting srbmod (Reply 60):
Gary Kelly said in a recent interview with CNBC that WN at some point could start charging for bags.

I wouldn't publicly say "never" either...I just wouldn't expect it. If fuel costs skyrocket, then yeah...the company will have to move.

Topic: RE: WN Effect Running Its Course?
Username: iowaman
Posted 2013-02-14 20:07:24 and read 1350 times.

Quoting HPRamper (Reply 49):
Again, only a small minority of the flying public books within two weeks and even fewer "last minute."

I'd have to disagree, IIRC a substantial amount of WN passengers in some markets are last-minute bookers.

Topic: RE: WN Effect Running Its Course?
Username: EaglePower83
Posted 2013-02-15 08:39:31 and read 1214 times.

Quoting FlyPNS1 (Reply 40):
And what happens when you fly AA and have to pay $100+ in bag fees, change fees, seat selection fees, etc? Will WN still be so expensive?

I guess that doesn't apply to me since I have AA's Citi card and my 1st bag is free for myself and 4 companions.
Even with the annual fee, 2 flights/yr paid for the fee, and I fly more than twice a year.

Topic: RE: WN Effect Running Its Course?
Username: ouboy79
Posted 2013-02-15 09:36:27 and read 1165 times.

Quoting EaglePower83 (Reply 63):
I guess that doesn't apply to me since I have AA's Citi card and my 1st bag is free for myself and 4 companions.
Even with the annual fee, 2 flights/yr paid for the fee, and I fly more than twice a year.

So that is your unique situation. The vast majority of pax aren't going to have the various credit cards and get the perks from them. So for you it works out pretty good, for the rest not so much.


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