Print from Airliners.net discussion forum
http://www.airliners.net/aviation-forums/general_aviation/read.main/5731615/

Topic: Southwest's Remaining Growth Strategy
Username: solarflyer22
Posted 2013-04-05 20:01:37 and read 9194 times.

I began to ponder on my flight now that they are officially the #1 domestic carrier how and where they'll grow in the future. Almost every major and medium sized American city has WN service yet they only cover about 40 states. So what's left to do to grow?

1) Add New Cities/State - WN has no service in Wyoming, Montana, South Dakota, North Dakota and West Virginia.
2) I see WN adding at least 1 City in HI and Alaska.
3) Mexico and Carribean are covered thanks to AirTran acq. I see little growth there.
4) Canada. WN used to do a Codeshare with WestJet but cancelled it. Perhaps service to Toronto or Vancouver? It would be pricey due to regulations and airport fees.

Other than that, there is really not much else they can do except to add more capacity to existing routes. There literally is no place to go. AirTran really filled out there network in Atlanta, Maine and Mexico.

As far as mergers and acquisitions go, they could grow by acquiring either Alaska Airlines or Sun Country. There are not any easy acquisitions available however. I'm pleased with size of the network and frequency of flights but there isn't much to look forward too growth wise.

Topic: RE: Southwest's Remaining Growth Strategy
Username: flyguy89
Posted 2013-04-05 20:17:57 and read 9125 times.

I've wondered this myself. I guess the easiest place to start as far as where WN will go next would be to look at the largest markets currently not served by them.

Topic: RE: Southwest's Remaining Growth Strategy
Username: airliner371
Posted 2013-04-05 20:19:05 and read 9125 times.

Quoting solarflyer22 (Thread starter):
now that they are officially the #1 domestic carrier

This isn't new news, this is just new in their advertisements.

Quoting solarflyer22 (Thread starter):
Mexico and Carribean

There is a lot of growth opportunity here. HOU, SAT, AUS, PHX... the list just keeps going.

Quoting solarflyer22 (Thread starter):
Canada

Certainly a possibility and likely in the future.

Quoting solarflyer22 (Thread starter):
HI and Alaska.

Both states likely to be added in this decade.

So you have Caribbean, Mexico, South America, Canada, Hawaii, Alaska and a few cities in America, that alone would take a lot of time to fulfill and who knows what the future will bring.

Topic: RE: Southwest's Remaining Growth Strategy
Username: AllegiantFlyer
Posted 2013-04-05 22:15:51 and read 8859 times.

Quoting solarflyer22 (Thread starter):
now that they are officially the #1 domestic carrier

Interesting how you bring this up. WN didn't bother to start using this in their commercials until after the AA/US merger was announced,Reason being is because the new AA will be the number 1 carrier so till then they are going to be going hard with the whole "Number one" thing. Amazing how mergers change the way airlines advertise.

Topic: RE: Southwest's Remaining Growth Strategy
Username: iowaman
Posted 2013-04-05 23:02:18 and read 8770 times.

Quoting solarflyer22 (Thread starter):

1) Add New Cities/State - WN has no service in Wyoming, Montana, South Dakota, North Dakota and West Virginia.

The problem with these above states is they all are relatively sparsely populated and generate minimal passenger numbers.

Quoting solarflyer22 (Thread starter):
2) I see WN adding at least 1 City in HI and Alaska.

ANC may come online some day, but I don't see it happening anytime real soon. The questions I have are whether WN would serve ANC from SEA, or a market like OAK-ANC. DEN, LAS, or PHX-ANC are pushing -800 realistic range and that is quite long for a -700. FAI really isn't worth serving on a year around basis IMO - just not enough enplanements unless another carrier was to reduce. If WN some day chose to fly SEA-ANC they could get some connections particularly to WN strongholds of OAK, PHX, LAS, DEN, MDW that see multiple daily SEA frequencies already.

Quoting solarflyer22 (Thread starter):
3) Mexico and Carribean are covered thanks to AirTran acq. I see little growth there.

I expect decent growth in Mexico and the Carribean. WN needs to keep costs low if they realistically want to serve these low yield markets, such as MBJ.

Quoting solarflyer22 (Thread starter):
4) Canada. WN used to do a Codeshare with WestJet but cancelled it. Perhaps service to Toronto or Vancouver? It would be pricey due to regulations and airport fees.

Some day perhaps, once Mexico and the Carribean gets all sorted out and WN isn't so busy dealing with the FL merger. They certainly are large markets from the U.S and worthy serving IMO. I am not too familiar with gate space in Toronto, and IIRC it's a very expensive airport for the airlines to serve.

Purely based on 2011 enplanements, WN has nicely filled in some of the larger cities in the U.S. lately with the FL merger such as ATL, CLT, MEM, and SJU.

Also based on enplanements, here are the largest holes domestically in the top 101:

Rank Airport

2 ORD - WN serves MDW
6 JFK - WN serves EWR/LGA/ISP
12 MIA - WN serves FLL
27 HNL - the largest unserved market area
51 CVG - worth serving IMO
57 OGG
70 LGB - severely slot restricted
75 GUM - Entirely too far for the 737, even from HNL.
78 KOA
82 LIH
86 SYR
87 HPN - out due capacity constraints
89 GSO
91 MYR
92 TYS (Surprised WN dropped this from FL)
94 COS
96 SAV
98 SFB - no reason to serve this with MCO
99 PSP
100 PNS
101 MSN


Quoting airliner371 (Reply 2):
So you have Caribbean, Mexico, South America, Canada, Hawaii, Alaska and a few cities in America, that alone would take a lot of time to fulfill and who knows what the future will bring.

  

Topic: RE: Southwest's Remaining Growth Strategy
Username: aklrno
Posted 2013-04-05 23:02:20 and read 8767 times.

WN could always restore services that have been cut in the last few years. I wouldn't mind seeing more red and blue planes at RNO.

Topic: RE: Southwest's Remaining Growth Strategy
Username: LV
Posted 2013-04-06 00:29:23 and read 8683 times.

I think there is still a lot of connecting the dots and fine tuning connecting opportunities in the current network to keep any planes WN acquires anytime soon busy. That is not to say I don't expect there to be more stations opened... but there are only a handful of cities left I think WN could realistically expand into.

Topic: RE: Southwest's Remaining Growth Strategy
Username: SurfandSnow
Posted 2013-04-06 02:55:20 and read 8544 times.

Quoting solarflyer22 (Thread starter):
now that they are officially the #1 domestic carrier

This has been the case for years now. They achieved this milestone back in 2010 - before buying FL.

Quoting solarflyer22 (Thread starter):
how and where they'll grow in the future

A lot of domestic growth set to happen at DAL when the Wright Amendment expires in late 2014.

A lot of international growth set to happen at HOU when the new FIS that they are paying for opens in late 2015.

They still need to figure out how canyon blue metal will serve the FL-only markets of MEM, PNS, and RIC as well as all of the FL international markets: AUA, BDA, CUN, MBJ, MEX, NAS, PUJ, and SJD. Then there are all of the mixed FL/WN markets, some of which really haven't been converted from FL to WN at all (i.e. CAK, DAY, and DCA). Finally, there is the whole question of the ATL hub, and whether it will continue to shrink, or perhaps gain new flights like BDL, EYW, JAN, LIT, etc.

Quoting solarflyer22 (Thread starter):
Almost every major and medium sized American city has WN service

Yup, the largest market missing from their route map is now CVG. After that, you are talking about much smaller stuff like GSO and SYR. Pretty amazing that they've managed to fill in pretty much all the major holes within the past decade - a quick check of January 1, 2003 route map shows that they weren't serving ATL, BOS, DCA, DEN, EWR, IAD, LGA, MKE, MSP, PHL, PIT, RSW, or SFO at the time, let alone the small markets they've also added since then (CHS, ECP, and GSP in addition to all those they took from FL).

Quoting solarflyer22 (Thread starter):
yet they only cover about 40 states

State borders are irrelevant. People cross state borders all the time to catch flights, especially if it means saving tons of $$ by flying on the likes of WN. Folks in northern Delaware, for example, can probably reach PHL more quickly than those in a northern Philly suburb like Willow Grove. There is no need for WN to actually serve the state of Delaware when PHL and BWI serve as the state's commercial airports anyway.

In any case, service to 41 states is quite impressive. Going back to that same January 1, 2003 route map I see they only served 30 states back then. In their organic growth mode between 2003 and 2011 they added Colorado, Massachusetts, Minnesota, New Jersey, Pennsylvania, South Carolina, and Wisconsin. Thanks to the FL acquisition, WN added service to Georgia in 2012 and Iowa last year, with Maine starting in a matter of days and Kansas coming online in June. This leaves just 9 states - Alaska, Delaware, Hawaii, Montana, North Dakota, South Dakota, Vermont, West Virginia, and Wyoming - without canyon blue service.

Quoting solarflyer22 (Thread starter):
1) Add New Cities/State - WN has no service in Wyoming, Montana, South Dakota, North Dakota and West Virginia.

Add new cities? Absolutely. Add new states? I'm not so sure. I assume we are only talking about the contiguous/continental U.S. here, in which case we also should consider Delaware and Vermont.

Delaware - No commercial airline service whatsoever. Nearby PHL and BWI effectively serve as the small state's commercial airports.

Montana - Didn't fit the old WN model, but maybe service to BIL - the state's largest airport, serving Montana's largest population center - would be possible with the new WN. I bet BIL is still reeling from the recent loss of its only network LCC carrier F9, and I daresay something like a 2x daily DEN-BIL on WN might just work. Great connectivity via DEN to places like MDW, LAS, and PHX, some or all of which could possibly be offered nonstop by WN in the future. Other than BIL, I can't see anything else in Montana making sense for WN.

North Dakota - Too small and sparsely populated. I don't see any market, even FAR, being viable for WN. Best leave this type of thing to F9 and G4.

South Dakota - Same story as North Dakota. The state's largest market, FSD, is a pretty easy drive from OMA.

Vermont - They would have at least been considered for WN service if FL's BWI-BTV had been successful. The quick failure of that service, along with B6's recent decision to drop BTV-MCO, leads me to believe that opportunities in Vermont are very limited. This is the state with the smallest economy of all, as I (and I'm sure many others) learned while reading about the troubles in Cyprus. Still, I have to think BWI on canyon blue metal (WN certainly has far better FF loyalty and connectivity at BWI than FL did) and maybe even MDW could work. It wasn't long ago that UA was still offering mainline on the ORD-BTV route. Vermont may have a small economy and population, but it is nonetheless quite prosperous and a pretty big tourist draw.

West Virginia - WN could have kept the FL station at CRW if it wanted to serve the state, but they decided to drop it. West Virginia has a very low per capita income, which probably helps explain why air service is so limited in a state of almost 2 million people. CRW can't even support more than 100 daily seats (2x daily UAX ERJs) to Chicago. Granted, a low fare option would stimulate the market, but even then I just couldn't see any way for WN to make CRW work. Not at all surprised they pulled out.

Wyoming - Like the Dakotas, you have a small population spread across a huge area. The only airport in Wyoming that sees anything more than puddlejumpers would be JAC, and that's not type of place I see an airline that many still think of as "the cattle car" being successful.

So, maybe BIL (Montana) and BTV (Vermont) would be good opportunities for WN. Even those two a pretty big stretch, though. Most, if not all, new WN markets in the contiguous/continental U.S. will probably be in states they already serve. Think CVG, FAT, GSO, SYR, etc.

Quoting solarflyer22 (Thread starter):
2) I see WN adding at least 1 City in HI and Alaska.

I agree. When it comes to Alaska, pretty much everyone flies there these days except WN. The LCCs have been taking that place by storm. WN could start off with niche routes, like OAK-ANC and LAS-ANC, where they have great FF loyalty and excellent connectivity. There really wouldn't be much AS could do to stop them. Then they could add more competitive stuff like DEN-ANC, MDW-ANC, PHX-ANC, perhaps even SEA-ANC and PDX-ANC thereafter. When it comes to Hawaii, there are constant rumors - WN will start service, WN won't start service.. Bottom line is that they invested a tremendous amount of resources in the ETOPS program, and only when that process is complete - it does take a while, as G4 will tell you - will they be able to start service. It may be a few years yet, but I certainly see Hawaii happening at some point!

Quoting solarflyer22 (Thread starter):
3) Mexico and Carribean are covered thanks to AirTran acq. I see little growth there.

Little growth?!? The FL ops barely scratch the surface. WN was so eager to add SJD and MEX that they came up with some crazy FL aircraft/crew routings to make the flights possible. They've also finally started some brand new Caribbean routes with MDW-MBJ/PUJ. Wait until they have that HOU FIS available to them. Wait until canyon blue metal can actually fly international. This is only the beginning. Plenty of connecting the dots and new markets to come, I'm sure.

Quoting solarflyer22 (Thread starter):
4) Canada. WN used to do a Codeshare with WestJet but cancelled it. Perhaps service to Toronto or Vancouver? It would be pricey due to regulations and airport fees.

WN never codeshared with WS. They were going to do an baggage interline like that with Y4, but even that never happened. They have since decided to discontinue the Y4 interline agreement since nobody ever took advantage of it. You saw what an ordeal it was just to get a codeshare up and running between WN and FL. WS didn't want to wait around, and instead partnered with other U.S. airlines. However, WN's desire to work with WS was probably evident of its interest in studying/gauging demand for Canada, and thus representative of its interest in the market. So, although the WN/WS agreement never came to fruition, the proposal alone is a pretty telling sign. To me, at least.

As far as WN to Canada, I don't think the costs alone would deter them. WN willingly took on added costs when it started markets like DEN and SFO, for instance. It really comes down to demand. Routes like LAS-YVR, PHX-YYC, and MDW-YYZ could probably do really well, but would stations at YVR, YYC, and YYZ on the whole be viable? Could OAK-YVR, DEN-YYC, or BWI-YYZ help support them? This the question I'm wondering.

Quoting solarflyer22 (Thread starter):
Other than that, there is really not much else they can do except to add more capacity to existing routes. There literally is no place to go. AirTran really filled out there network in Atlanta, Maine and Mexico.

LOL, there are plenty of places to go. And they can always start new nonstop routes that "connect the dots". I've already mentioned potential new U.S. markets like BIL, BTV, CVG, FAT, GSO, SYR, along with ANC and Hawaii (any of the 4 major airports, perhaps even ITO from OAK - a route they used to codeshare on). Internationally they could do anything from GDL and PVR to SJO and PTY to GCM and SXM. Lots and lots of opportunities!

Quoting solarflyer22 (Thread starter):
As far as mergers and acquisitions go, they could grow by acquiring either Alaska Airlines or Sun Country. There are not any easy acquisitions available however. I'm pleased with size of the network and frequency of flights but there isn't much to look forward too growth wise.

No need to go for SY. They already seem to be growing at MSP just fine. Picking up AS would be interesting, and actually have minimal overlap along with the fleet commonality, but that is unlikely to happen.

Topic: RE: Southwest's Remaining Growth Strategy
Username: MIflyer12
Posted 2013-04-06 05:20:48 and read 8339 times.

Quoting SurfandSnow (Reply 7):
Quoting solarflyer22 (Thread starter):
now that they are officially the #1 domestic carrier

This has been the case for years now. They achieved this milestone back in 2010 - before buying FL.

Southwest is largest in terms of passenger boarding count; Delta is ~10% larger in terms of domestic RPMs vs. total Southwest RPMs for 2012. System RPM to system RPM, Delta is almost 90% larger than Southwest, and UA a bit larger than Delta.

http://news.delta.com/index.php?s=43&item=1834

http://www.swamedia.com/releases/Sou...rlines-Reports-December-Traffic-12

Topic: RE: Southwest's Remaining Growth Strategy
Username: yellowtail
Posted 2013-04-06 12:15:47 and read 6371 times.

Quoting solarflyer22 (Thread starter):
3) Mexico and Carribean are covered thanks to AirTran acq. I see little growth there.

I believe WN themselves have stated that C. America will be a huge growth area for them once HOU FIS opens.

Quoting SurfandSnow (Reply 7):
Wait until canyon blue metal can actually fly international. This is only the beginning.

  

Topic: RE: Southwest's Remaining Growth Strategy
Username: JBAirwaysFan
Posted 2013-04-06 17:06:41 and read 5075 times.

Quoting iowaman (Reply 4):
100 PNS

I believe PNS is an FL -> WN station

Topic: RE: Southwest's Remaining Growth Strategy
Username: ouboy79
Posted 2013-04-06 18:29:56 and read 4692 times.

Quoting JBAirwaysFan (Reply 10):
I believe PNS is an FL -> WN station

Mmhmm. Conversion date not announced yet though. Probably won't see them, RIC, and MEM moved over until late Fall/Winter.

Topic: RE: Southwest's Remaining Growth Strategy
Username: Jet13
Posted 2013-04-06 19:02:49 and read 4543 times.

Quoting SurfandSnow (Reply 7):
South Dakota - Same story as North Dakota. The state's largest market, FSD, is a pretty easy drive from OMA.

As a native at FSD, I still hate the drive to OMA... did this to fly DL out of OMA to MIA via ATL. happen to find it very cheap at the time of booking. I think $250/person and this was in spring '11. Ever since, we've been flying out of FSD, regardless of the price... Supporting the town and airport. Still would like to see WN come in via MDW. In my opinion, may help other airline airfare to drop.

-Nick

Topic: RE: Southwest's Remaining Growth Strategy
Username: Stapleton
Posted 2013-04-06 21:15:48 and read 4170 times.

Quoting SurfandSnow (Reply 7):
Montana - Didn't fit the old WN model, but maybe service to BIL - the state's largest airport, serving Montana's largest population center - would be possible with the new WN. I bet BIL is still reeling from the recent loss of its only network LCC carrier F9, and I daresay something like a 2x daily DEN-BIL on WN might just work. Great connectivity via DEN to places like MDW, LAS, and PHX, some or all of which could possibly be offered nonstop by WN in the future. Other than BIL, I can't see anything else in Montana making sense for WN.

BZN might be a better fit than BIL since it has both higher total airline revenue and when you subtract out the essential air servcie that Billings has to eastern Montana, Bozeman actually carries more passengers. According to the Department of Transportation for Montana, Billings boarded 441,000 passengers which included 17,000 essential air service passengers meaning 424,000 passengers were on flights to destinations out of Montana while Bozeman boarded 434,000 passengers on flights to destinations out of Montana.

Topic: RE: Southwest's Remaining Growth Strategy
Username: alggag
Posted 2013-04-06 21:35:53 and read 4138 times.

Quoting SurfandSnow (Reply 7):
North Dakota - Too small and sparsely populated. I don't see any market, even FAR, being viable for WN. Best leave this type of thing to F9 and G4.

I could see FAR, especially now that the new "minimum" appears to be about 3x.

Topic: RE: Southwest's Remaining Growth Strategy
Username: Cubsrule
Posted 2013-04-06 21:38:24 and read 4131 times.

Quoting SurfandSnow (Reply 7):
Vermont - They would have at least been considered for WN service if FL's BWI-BTV had been successful. The quick failure of that service, along with B6's recent decision to drop BTV-MCO, leads me to believe that opportunities in Vermont are very limited. This is the state with the smallest economy of all, as I (and I'm sure many others) learned while reading about the troubles in Cyprus. Still, I have to think BWI on canyon blue metal (WN certainly has far better FF loyalty and connectivity at BWI than FL did) and maybe even MDW could work. It wasn't long ago that UA was still offering mainline on the ORD-BTV route. Vermont may have a small economy and population, but it is nonetheless quite prosperous and a pretty big tourist draw.

I'm not sure how WN's brand recognition is in Canada--and how it compares to B6's--but I would think that BTV-MCO could draw some Canadians if marketed right. The trouble is that I'm not sure BWI/MDW/MCO is enough to make BTV make sense. Five years ago, BTV-PHL might have made some sense, but PHL is much smaller today. BOS probably isn't a big enough station for BTV-BOS to work.

Topic: RE: Southwest's Remaining Growth Strategy
Username: flyby519
Posted 2013-04-07 07:34:56 and read 3864 times.

Quoting solarflyer22 (Thread starter):
As far as mergers and acquisitions go, they could grow by acquiring either Alaska Airlines or Sun Country. There are not any easy acquisitions available however. I'm pleased with size of the network and frequency of flights but there isn't much to look forward too growth wise.

I think AS would be a wise choice for WN, but DL wouldnt let that happen without making them overpay. There is a unique opportunity at the moment for WN to go after B6 without any real threats from DL/UA/AA jumping into the fray (AA busy with merger, UA same, DL cant realistically make a bid for B6). That would help create dominance in the New England area, as well as truly adding a NYC presence that can be leveraged into Caribbean/S.American expansion as well.

[Edited 2013-04-07 07:35:59]

Topic: RE: Southwest's Remaining Growth Strategy
Username: Sligo
Posted 2013-04-07 07:41:18 and read 3839 times.

The bigger they get, the harder it is to grow 5-10% per year and thus the more pressure that puts on its earning multiple (which is partially a reflection of its growth rate). Thus its valuation is in peril. Moreover, such growth will continue to put pressure on its cost model.

That doesnt mean WN is set for a downfall, not by any stretch. But its valuation, otoh, is set to be under prolonged, significant strain.

Some might say the answer to this is to break up the company. That's far easier said than done.

[Edited 2013-04-07 07:43:19]

Topic: RE: Southwest's Remaining Growth Strategy
Username: solarflyer22
Posted 2013-04-07 15:33:33 and read 3483 times.

Quoting SurfandSnow (Reply 7):
This has been the case for years now. They achieved this milestone back in 2010 - before buying FL.

That's impressive I did not know that.

Quoting yellowtail (Reply 9):
I believe WN themselves have stated that C. America will be a huge growth area for them once HOU FIS opens.

I agree. It sounds like they are headed south where the population and disposable income are set to rise a lot over the next 20 years. Canada is just expensive and not as lucrative I think. Its a shame as I love to travel there. I wonder how far south the 738 can reach into Central America from HOU? That might be a pretty large territory in itself.

Quoting Sligo (Reply 17):
Some might say the answer to this is to break up the company. That's far easier said than done.

I hope not! I finally feel like I can go anywhere anytime with 1 connection.

Another thing that might help them is to partner up with someone that flies international but not domestically. I am sure there are some people that would like to fly to IAD and then take WN on the domestic. Problem is they are not in JFK, MIA or ORD so it makes it hard to make a connection in those cities.

Topic: RE: Southwest's Remaining Growth Strategy
Username: infiniti329
Posted 2013-04-07 21:46:51 and read 3113 times.

Quoting solarflyer22 (Reply 18):
I wonder how far south the 738 can reach into Central America from HOU? That might be a pretty large territory in itself.

No further south than northern brazil even that may be pushing it

Topic: RE: Southwest's Remaining Growth Strategy
Username: steex
Posted 2013-04-07 22:18:21 and read 3051 times.

Quoting iowaman (Reply 4):
The questions I have are whether WN would serve ANC from SEA, or a market like OAK-ANC. DEN, LAS, or PHX-ANC are pushing -800 realistic range and that is quite long for a -700.

For what it's worth, none of those routes should be pushing the realistic range of a 738 (and the 73G should have even more range). AS flies the 738 ORD-ANC daily, and there are countless other 738 routes longer than the longest of those you listed (ANC-PHX at 2217nm). A lot of standard transcons would be longer than that (EWR-SFO checks in at 2229 nm, for example). So while these would be long segments by WN standards, aircraft capability wouldn't be the problem.

Quoting infiniti329 (Reply 19):
No further south than northern brazil even that may be pushing it

WN wouldn't be able to reach any commercially viable destinations in Brazil from HOU because of how far east Brazil is. HOU-LIM would be on the fringe based on range, but any of the major destinations north of that should be safely in play. However, I don't think South America is the focus, and I think any destination in Central America is possible with WN's aircraft from HOU. They'll have no problem reaching anywhere from Mexico on down through Panama.

Topic: RE: Southwest's Remaining Growth Strategy
Username: LV
Posted 2013-04-07 23:53:22 and read 2964 times.

Quoting steex (Reply 20):
WN wouldn't be able to reach any commercially viable destinations in Brazil from HOU because of how far east Brazil is. HOU-LIM would be on the fringe based on range, but any of the major destinations north of that should be safely in play.

I wonder if there is the possibility to build Brazil services up from MCO or TPA?

Topic: RE: Southwest's Remaining Growth Strategy
Username: Raddek
Posted 2013-04-08 01:11:41 and read 2915 times.

Quoting SurfandSnow (Reply 7):
Yup, the largest market missing from their route map is now CVG.

The CVG market of folks is served by WN via DAY. People seem to not be doing their research before posting things out of the blue at times. DAY is 30-45 minutes away from the majority of the CVG population. The costs in CVG are high and the costs in DAY are very low and there is a lot of opportunity for expansion in DAY if WN choses to one day grow more.

Case closed on WN serving CVG. Won't happen as long as there is a DAY.

Topic: RE: Southwest's Remaining Growth Strategy
Username: Flytravel
Posted 2013-04-08 04:41:29 and read 2829 times.

Quoting Raddek (Reply 22):
The CVG market of folks is served by WN via DAY. People seem to not be doing their research before posting things out of the blue at times. DAY is 30-45 minutes away from the majority of the CVG population. The costs in CVG are high and the costs in DAY are very low and there is a lot of opportunity for expansion in DAY if WN choses to one day grow more.

Case closed on WN serving CVG. Won't happen as long as there is a DAY.

WN still hasn't converted DAY-BWI to it's metal or added DAY-MDW. Once those two happen, I'd see it less likely for a change in mind to service CVG.

WN has chosen to continue to service BWI-CLE, not BWI-CAK. I'm sure there is more reasoning to fly from BWI to the more main airport given that BWI itself is already an alternate airport to DCA for WAS based travelers.

Topic: RE: Southwest's Remaining Growth Strategy
Username: 0NEWAIR0
Posted 2013-04-08 04:47:51 and read 2819 times.

Quoting MIflyer12 (Reply 8):
Southwest is largest in terms of passenger boarding count; Delta is ~10% larger in terms of domestic RPMs vs. total Southwest RPMs for 2012. System RPM to system RPM, Delta is almost 90% larger than Southwest, and UA a bit larger than Delta.

http://news.delta.com/index.php?s=43&item=1834

http://www.swamedia.com/releases/Sou...ic-12

Pax numbers are all that matter in my opinion. People don't pay by the mile so I don't believe RPMs are a good way to measure airline size. Plus you get into situations like this:

Every day airline A carries 150 pax, 750 miles for $100 per pax. Every day airline B carries 200 pax 500 miles for $100 per pax. Which airline is bigger?

(B seems like the obvious answer to me)

Topic: RE: Southwest's Remaining Growth Strategy
Username: Flytravel
Posted 2013-04-08 04:51:50 and read 2882 times.

In addition to BWI-CVG, I think they could do BWI-SYR, BWI-GSO, BWI-SAV and maybe BWI-PBG in the east. There will be BWI-DAL. Hopefully WN will go nonstop on BWI-MSP too.

The one market it's reluctant to compete against UA is on BWI-SFO/OAK while WN does have transcons to SAN, LAX and SEA from BWI. Additionally, it'd be interesting if they reserved a EWR slot for EWR-OAK given that OAK has connections and EWR is access to NY and a huge catchment, and UA doesn't service OAK.

Some JFK service might not be out of the question given that LGA and EWR are essentially spokes as well into NYC, but WN seems to have enough LGA slots possibly for the time being. Maybe it'd be a small spoke starting with some JFK-MDW or JFK-BWI.

If WN bought Sun Country, it'd increase it's marketshare at MSP, and get into LAN with the LAN-DCA slot. This could be an easy/compatible acquisition compared to the other remaining alternatives.

[Edited 2013-04-08 05:08:26]

Topic: RE: Southwest's Remaining Growth Strategy
Username: flyguy89
Posted 2013-04-08 08:20:56 and read 2699 times.

Quoting Raddek (Reply 22):

The CVG market of folks is served by WN via DAY.

Sorry, they may get some leakage from the Cincinnati area, but they are not effectively serving the 2 million+ population of the area in any way from DAY. More importantly, the leakage they do get from Cincinnati would disappear quickly once fares at CVG become more reasonable.

Quoting Raddek (Reply 22):
DAY is 30-45 minutes away from the majority of the CVG population.

DAY, depending on traffic, is at least an hour from most of Cincinnati's population. CVG is the closest most convenient airport for all but the most northern suburbs of the area.

Quoting Raddek (Reply 22):
The costs in CVG are high and the costs in DAY are very low

Compared to DAY, CVG is more expensive, but in a national context CVG is middle of the pack and much less expensive than many of WN's largest stations.

Quoting Raddek (Reply 22):
and there is a lot of opportunity for expansion in DAY if WN choses to one day grow more.

The Dayton area's population continues to shrink along with its corporate base, yields are low and it's very close to other more established WN stations. By contrast, the Cincinnati metro area population continues to grow and has a substantial and healthy corporate base who prefer using CVG over long drives to DAY, LEX, SDF...etc. Any growth at DAY would be dependent on a strategy of continuing to draw Cincinnati area travelers which, long-term, is not a sustainable strategy with fares at CVG coming down and increasing interest from other LCC's. CVG offers better yields, better central location, a far larger catchment area and greater distance from its other stations in the region, it's a matter of when not if.

Topic: RE: Southwest's Remaining Growth Strategy
Username: steex
Posted 2013-04-08 08:29:55 and read 2692 times.

Quoting LV (Reply 21):
I wonder if there is the possibility to build Brazil services up from MCO or TPA?

Unlikely unless they get a type with a lot more range. Even from Florida, most of Brazil is too far away. They could theoretically reach northern Brazil, but they wouldn't come anywhere close to the likes of BSB/CNF/GIG/GRU. Their existing equipment would probably be limited to MAO/BEL/SLZ, which are not markets I can see WN attempting.

Topic: RE: Southwest's Remaining Growth Strategy
Username: Raddek
Posted 2013-04-08 09:49:03 and read 2540 times.

*yawns*

CVG is not a market that WN has shown a whole lot of interest in years past. They would have started it many years ago if that was the case.

DAY is a very profitable station for FL and that is one of the reasons it was kept and not closed. WN has bigger plans in the future for that station.

But "if" CVG were to open, it would be maybe 5 flights a day, to and from O&D heavy markets. That and I am sure that with it being that small, it will also be a 3rd party vendor working the Airport Operation for WN. I would think that a timeline for that would be around 2017. I believe that is when the leased price and all that DL has with the CVG airport expire.

Topic: RE: Southwest's Remaining Growth Strategy
Username: flyguy89
Posted 2013-04-08 10:45:37 and read 2433 times.

Quoting Raddek (Reply 28):
CVG is not a market that WN has shown a whole lot of interest in years past. They would have started it many years ago if that was the case.

...because in years past DL had over 600 daily flights at CVG. It's similarly why they never came to CLT until now, their strategy is changing.

Quoting Raddek (Reply 28):
DAY is a very profitable station for FL and that is one of the reasons it was kept and not closed.

And what happens to those profits once all the leakage from Cincinnati dries up?

Quoting Raddek (Reply 28):
WN has bigger plans in the future for that station.

Like what? Do you have a source?

Topic: RE: Southwest's Remaining Growth Strategy
Username: FWAERJ
Posted 2013-04-08 11:07:46 and read 2370 times.

Quoting flyguy89 (Reply 26):
Compared to DAY, CVG is more expensive, but in a national context CVG is middle of the pack and much less expensive than many of WN's largest stations.

Or even some smaller stations. WN and FL combined have about 25-27 flights per day out of IND (another airport that receives a lot of CVG leakage, including WN pax), which is a very expensive airport for passenger carriers with a CPE in the $8 to $9 range - twice that of CVG. I'm sure DAY is cheaper than either CVG or IND, though.

(IND's high costs are for passenger carriers only, as they have to keep the landing fees low for the FedEx hub, and FX doesn't use IND's high-cost pax facilities.)

Topic: RE: Southwest's Remaining Growth Strategy
Username: FWAERJ
Posted 2013-04-08 11:14:43 and read 2355 times.

Quoting Raddek (Reply 28):
I would think that a timeline for that would be around 2017. I believe that is when the leased price and all that DL has with the CVG airport expire.

DL has leases on Concourses B and C at CVG until 2025, but DL relinquished their Concourse A leases back to the KCAB two years ago. This is how they were able to close down Terminal 2 and move those carriers into a refreshed Concourse A. And Concourse A still has six available and ready-to-use gates (and several more that can be reactivated), which means that if WN wanted to start CVG service tomorrow, they could.

Topic: RE: Southwest's Remaining Growth Strategy
Username: flyguy89
Posted 2013-04-08 11:47:03 and read 2277 times.

Quoting FWAERJ (Reply 31):
Quoting Raddek (Reply 28):
I would think that a timeline for that would be around 2017. I believe that is when the leased price and all that DL has with the CVG airport expire.

DL has leases on Concourses B and C at CVG until 2025, but DL relinquished their Concourse A leases back to the KCAB two years ago. This is how they were able to close down Terminal 2 and move those carriers into a refreshed Concourse A. And Concourse A still has six available and ready-to-use gates (and several more that can be reactivated), which means that if WN wanted to start CVG service tomorrow, they could.

To expand on this, DL doesn't lease gates in Concourse B, rather they actually own the facility and lease the land from KCAB, it might be in 2025 when DL finishes bond payments on the facility, not 100% clear on their financials for it. But this is definitely something CVG has going for it in never having been saddled with debt from the facility, DL paid for the whole thing.

Topic: RE: Southwest's Remaining Growth Strategy
Username: TPAfan
Posted 2013-04-08 13:21:13 and read 2163 times.

Quoting LV (Reply 21):

Tampa not only has a large Hispanic/Latino market, but it also has not been tapped into and it is in a nice location for flights into the caribbean and South America. I think this could be an opportunity for SWA to add flights from TPA with less competition, and lower costs, and the ability to use it as O&D and connectivity. The only thing I wonder is the range factor flying into Brazil. The largest markets are in South Brazil, and with the range of their fleet, it appears that it is not going to happen non-stop from TPA or MCO. Lopano has been preaching for international growth, and I believe this could be an option. This is just my humble opinion, and if you disagree, feel free to correct me.

Topic: RE: Southwest's Remaining Growth Strategy
Username: LoneStarMike
Posted 2013-04-08 13:46:07 and read 2117 times.

Quoting FWAERJ (Reply 30):
WN and FL combined have about 25-27 flights per day out of IND (another airport that receives a lot of CVG leakage, including WN pax), which is a very expensive airport for passenger carriers with a CPE in the $8 to $9 range - twice that of CVG.

So are you implying that CVG's cost per enplaned passenger is in the $4-5 dollar range? And what is your source? I'm not seeing that.

Quote:
Cost per enplaned passenger stood at $7.29 in fiscal 2009, one dollar higher compared to fiscal 2008, and $8.55 in fiscal 2010. With declining enplanements, CVG management projects that CPE for fiscal 2011 will increase to $9.69 after a credit back to the airlines for over-collection of landing fees during the year.
Source

The above report is blaming CVG's rising CPE on declining enplanements. If it was estimated to be $9.69 for fiscal year 2011 (when CVG had just over 7 million passengers,) I don't see how it would drop - considering CVG had just over 6 million total passengers in 2012.

(Or did you perhaps mean to type that IND's CPE was in the $18 - $19 range (rather than the $8 or $9 range?)

LoneStarMike

Topic: RE: Southwest's Remaining Growth Strategy
Username: flyguy89
Posted 2013-04-08 15:18:14 and read 2044 times.

Quoting LoneStarMike (Reply 34):
Quote:
Cost per enplaned passenger stood at $7.29 in fiscal 2009, one dollar higher compared to fiscal 2008, and $8.55 in fiscal 2010. With declining enplanements, CVG management projects that CPE for fiscal 2011 will increase to $9.69 after a credit back to the airlines for over-collection of landing fees during the year.
Source

The above report is blaming CVG's rising CPE on declining enplanements. If it was estimated to be $9.69 for fiscal year 2011 (when CVG had just over 7 million passengers,) I don't see how it would drop - considering CVG had just over 6 million total passengers in 2012.

(Or did you perhaps mean to type that IND's CPE was in the $18 - $19 range (rather than the $8 or $9 range?)

Are we talking about the same fees? Because this article has CVG's landing fees in 2010 at $3.94 with your source indicating $8.55. Is there a difference between CPE and "$X per 1000 lbs of landed aircraft weight"?

Topic: RE: Southwest's Remaining Growth Strategy
Username: LoneStarMike
Posted 2013-04-08 15:32:42 and read 2023 times.

Quoting flyguy89 (Reply 35):
Is there a difference between CPE and "$X per 1000 lbs of landed aircraft weight"?

Yes, there is a difference. A landing fee is just a landing fee. CPE (Cost per enplaned passenger) is the airlines cost per passenger based on landing fees, terminal rents, fueling fees, etc.

LoneStarMike


The messages in this discussion express the views of the author of the message, not necessarily the views of Airliners.net or any entity associated with Airliners.net.

Copyright © Lundgren Aerospace. All rights reserved.
http://www.airliners.net/