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WN Considering Another A/C Type-the EMB190  
User currently offlineSunValley From , joined Dec 1969, posts, RR:
Posted (11 years 2 months 2 days 18 hours ago) and read 4153 times:

Perhaps southwest is becoming more reactionary, and thinking a little more long term about their competition.
Interesting article about this.

http://www.dallasnews.com/sharedcontent/dallas/business/stories/102103dnbussouthwest.55876.html

Sounds like they are also going to be looking at smaller markets if they are
interested in aircraft such as this.

44 replies: All unread, showing first 25:
 
User currently offlineSinlock From United States of America, joined Dec 2000, 1652 posts, RR: 2
Reply 1, posted (11 years 2 months 2 days 18 hours ago) and read 4074 times:

This sounds likely,
I wouldn't try to guess what aircraft they would pick but this is the kind of thing WN would do.
This way they can work their way into even smaller airports. All they need is an aircraft with an "airstair" so they aren't limited to airports with jetways.


(One Note, Can you put up a summery of the artical as is requiers a membership)



My Country can beat up your Country....
User currently offlineUdo From , joined Dec 1969, posts, RR:
Reply 2, posted (11 years 2 months 2 days 18 hours ago) and read 4038 times:

First IFE, now also a smaller aircraft type? WN goes the jetBlue way again. It seems the common success formula for LCCs (one type only) is to change in the future. And all those who say jetBlue's decision to go for smaller aircraft is wrong will have to think again.


Regards
Udo


User currently offlineElwood64151 From United States of America, joined Feb 2002, 2477 posts, RR: 6
Reply 3, posted (11 years 2 months 2 days 17 hours ago) and read 4011 times:

Udo:

What about AirTran's decision to go with a larger aircraft type, the 73G? And AirTran's decision to operate JetConnect via AirWisconsin? It seems to me that the other two are following AirTran's lead.

Though admittedly, FL does not have IFE. That would be WN following B6. When was this announced?



Those who fail to learn history are doomed to repeat it in summer school.
User currently offlineUdo From , joined Dec 1969, posts, RR:
Reply 4, posted (11 years 2 months 2 days 17 hours ago) and read 3977 times:

AirTran offers two class service, plus they have the JetConnect deal with Air Wisconsin. And they have two types in their fleet already, B717 and DC-9 (which are quite different aircraft despite their similarity).
So the question remains if FL is a 'real' low cost carrier?


Regards
Udo


User currently offlineWmupilot From United States of America, joined Jan 2003, 1473 posts, RR: 12
Reply 5, posted (11 years 2 months 2 days 17 hours ago) and read 3974 times:

How about ATA Operating large aircraft (753, 752, L-1011) and smaller aircraft (722, SF340B) Since the beginning? It seems that every other LCC is now seeing the advantages and following ATA's lead...ever think of it that way?


JetBlue - Bringing humanity back to air travel
User currently offlineMotech722 From United States of America, joined Aug 2003, 211 posts, RR: 2
Reply 6, posted (11 years 2 months 2 days 17 hours ago) and read 3959 times:

Sinlock,

Here's the article for you...

Southwest may tweak strategy
Smaller planes, in-flight entertainment studied; profit tops forecasts

09:01 AM CDT on Tuesday, October 21, 2003

By ERIC TORBENSON / The Dallas Morning News

Southwest Airlines Co. reported another quarterly profit Monday under its tried-and-true business plan, but the Dallas-based carrier signaled that big strategy changes could be on the horizon.

The company earned $106 million, or 13 cents a share, for July, August and September, its 50th consecutive profitable quarter.

The total was more than double Southwest's third-quarter $50 million profit a year earlier, not counting a government grant, and topped analysts' expectations by a penny a share.

While the profit story remains the same, Southwest executives are considering significant tweaks to the company's longtime business model.

Southwest's often-studied model of using just one family of planes – the Boeing 737 – and offering friendly but rudimentary on-board service has been mimicked but never quite equaled.

The company is now "casually" studying the possibility of adding a smaller plane, said chief financial officer Gary Kelly.

Smaller jet


The chief suspect is Embraer's 190 series. JetBlue Airways Corp., a fast-growing New York-based rival of Southwest, ordered the Brazilian-built, 100-seat planes in bulk this year.
"We have looked at and declined on [flying] regional jets several times over the years," Mr. Kelly told analysts Tuesday in a conference call.

But, he added, Southwest could now use smaller planes in its smaller markets. "We're acknowledging that we're looking at it," he said.

Southwest also is studying whether to add in-flight entertainment, which until now has been limited to witty banter from flight attendants. Mr. Kelly wouldn't specify what was being considered, but said the options would appeal to business travelers.

Southwest is operating more long-haul and transcontinental flights that are well-suited to in-flight entertainment. Another motivating factor is competition from JetBlue, which offers in-seat satellite television.

Mr. Kelly knocked down a rumor – floated during an Oct. 6 aviation forecast conference – that Southwest was planning to start assigning seats. It isn't, he said.

But the carrier will continue to grow, Mr. Kelly said. Southwest will get 47 new planes in 2004, including five announced Monday.

By contrast, Southwest's fleet totaled 46 planes in 1983. The fleet currently totals 385 planes.

Southwest also will add one city to its network by year's end and has enough planes to add a second destination.

The carrier hasn't decided what it will do at St. Louis, where American Airlines Inc. is pulling half its capacity Nov. 1.

The issue there isn't passenger demand, but high airport costs, Mr. Kelly said.

Overall, Southwest operations will grow 7 percent next year and 11 percent in 2005, Mr. Kelly said. That pace – after a couple of years of growth near 4 percent – has some analysts warming to Southwest's shares.

"In our view, investors have paid less attention to Southwest than some of its low-fare peers because of the company's adherence to its basic operating principles and its very conservative nature," Gary Chase of Lehman Bros. said Monday in a note to investors.

"We expect that investors will begin to appreciate the relative stability that Southwest offers," he said.

But others, such as Jim Higgins of Credit Suisse First Boston, say Southwest shares are priced too high.

Investors seemed inclined to adopt Mr. Chase's view Monday, when Southwest shares climbed 59 cents to $18.99.

Labor costs


That's not to say Southwest doesn't have big challenges ahead, namely rising labor costs. Southwest's pilots are due for 13.6 percent wage increases next year.
"Southwest's pilots will emerge as industry wage leaders" if Delta Air Lines Inc. and Northwest Airlines Inc. persuade their pilots to accept lower wages in contract renegotiations, Jamie Baker, an analyst with J.P. Morgan Chase, said in a note to investors.

"Therein lies the problem with costs," he said. "If you can't beat 'em, try and grow out of 'em."

Southwest intends to counter the higher wages with productivity improvements.

"We're not going to run our business based on what the competition pays their people," Mr. Kelly said. "Our goal continues to be the low-cost producer."

Southwest will cut one of its larger costs by ending 5 percent commission payments to travel agents Dec. 15. Southwest is the last major carrier to drop the payments, and it expects the move will save it $40 million next year.

Travel agents once booked 53 percent of Southwest's tickets, but now account for 15 percent of sales. More than half of Southwest's customers now book through the Internet, the cheapest way to sell tickets.

The revenue side of Southwest's ledger looks "pretty good" going forward, Mr. Kelly said. Revenue rose nearly 12 percent year over year, and bookings for the upcoming holiday months are solid, he said.

The percentage of passengers paying Southwest's top fares – mostly business travelers – rose to 36 percent from 31 percent in the third quarter of 2002. That healthy increase helped fuel third-quarter earnings, Mr. Kelly said.

Overall, business travel is coming back, although slowly, he added.

Separately Monday, Standard & Poor's Ratings Services said it changed is long-term outlook on Southwest to "stable" from "negative" on the strength of its results.

http://www.dallasnews.com/sharedcontent/dallas/business/stories/102103dnbussouthwest.55876.html




User currently offlineSwafa30 From , joined Dec 1969, posts, RR:
Reply 7, posted (11 years 2 months 2 days 17 hours ago) and read 3931 times:

I was listening to the conference call when SWA CFO Gary Kelly released the 3Q financials when this question was asked. His response was that over the years SWA has "looked" at the 50 and 70 seater RJs when they came along and likewise they are doing the same with the 100 seaters. It was not news when this happened in the past because of the lack of the jetBlue factor. In the same breath Mr. Kelly reiterated SWA's dedication to the single model fleet and that this was not likely to change soon. Essentially the point was that it would be irresponsible to not examine every option available to help SWA maintain it's low cost advantage....but examination is a looonnng way from acquistion.

User currently offlineWmupilot From United States of America, joined Jan 2003, 1473 posts, RR: 12
Reply 8, posted (11 years 2 months 2 days 16 hours ago) and read 3815 times:

Mr. Kelly is right on his point. It would be completly insane not to look at every aircraft out there and see if it may fit into your plan. The single fleet has worked outstandingly well for WN so that's why they are still with it. You always need to keep your options open in this industry. I'm sure in addition the the EMB190's they've looked at the 717, CRJ-700,900, A318...and countless others


JetBlue - Bringing humanity back to air travel
User currently offlineLastBaron From United States of America, joined Oct 2003, 290 posts, RR: 2
Reply 9, posted (11 years 2 months 2 days 16 hours ago) and read 3752 times:

JetBlue is looking at the 190 in addition to its Airbus fleet, not as a replacement. This would enable them to provide economical service into many more cities they want to serve, and also to establish a profitable JFK-IAD link, which right now is out of the question using Airbuses. If WN is now considering this option, too, it is a case of copy-catting for sure.


AirTran is a smart outfit; if they are considering larger aircraft, it will certainly also be in addition to their 717 fleet, not as replacement. In some markets, they could certainly use more capacity. Their smarts are proven time and time again - the decision to sell business upgrades at check-in for $25/segment (now $50) was an industry first; the link-up with Air Wisconsin is brilliant. They also continuously have turned a profit since 9/11 (contrary to lore that WN was the only one). The link up with Ryan International to provide West Coast service may also be a reason for considering the bigger aircraft; while I am sure the Ryan link-up is not without its merits, they may want to bring that service in-house and expand/grow it. I wish AirTran served BTV along with JetBlue; it would make BTV a lot more lively.


User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 10, posted (11 years 2 months 2 days 16 hours ago) and read 3689 times:

I'm selling my stock if this goes beyond the "consideration" stage.

User currently offlineGigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
Reply 11, posted (11 years 2 months 2 days 15 hours ago) and read 3650 times:

I'm selling my stock if this goes beyond the "consideration" stage.

Right, because you're intimately in tune with the goings on both of the stock market and at Southwest?

They know what they're doing.

N


User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 12, posted (11 years 2 months 2 days 15 hours ago) and read 3620 times:

I don't know about that. JetBlue has already said that the EMB190 will increase their operating costs by 14%. A new aircraft type is going to impact the pilots chosen to fly them, and a "secondary" wage scale WILL be implemented. It'd happen at LUV, too. I've held SWA stock for a long time, and in this industry, increasing costs 14% can kill. It all sounds so good on paper, but in reality - it's going to make the adoptees of this "mixed fleet" pretty sorry investments.

User currently offline777236ER From , joined Dec 1969, posts, RR:
Reply 13, posted (11 years 2 months 2 days 15 hours ago) and read 3611 times:

They know what they're doing.

Right, because you're intimately in tune with the goings on both of the stock market and at Southwest?


User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6437 posts, RR: 34
Reply 14, posted (11 years 2 months 2 days 15 hours ago) and read 3582 times:

Goingboeing:

Keep your stock broker's number nearby - you just might have to sell sooner than you think. Big grin

In another thread (Emb 170 in STL) Pilotpip - who got an E170 demo flight, states that the E170 departed for Dallas yesterday. Why Dallas? American Eagle? Naw, Scope won't allow it. Hmmmm, maybe WN... Unfortunately, no airport is specified.

It will be interesting to hear from someone in Dallas if they spot the E170!



Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 15, posted (11 years 2 months 2 days 15 hours ago) and read 3544 times:

Hmmm...on another message board, there is a lot of heated discussion about AA/AE flying and the need for a 100 passenger jet.

And as I said earlier, there was a time where SWA was "considering" the DC9.

I'll hold my stock for now, but if they deviate from this conrnerstone of their business plan, then my stock is as good as sold.


User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6437 posts, RR: 34
Reply 16, posted (11 years 2 months 2 days 14 hours ago) and read 3453 times:

I admit that I know absolutely nothing about WN's future plans so what I say is pure speculation. However, having said that, I can understand WN "seriously" examining the possibility of getting 100 pax jets for the reasons that several people have already offered on this thread.

With regards to operating a second type increasing operating costs, that would have to be weighed against increased revenues. Obviously, JetBlue has done its calculations and they seem to think that it will not only work but be a great opportunity.

For the record, here are some out takes from an article that explains Neeleman's thinking on the logic of a two aircraft type fleet:

JetBlue Orders 100 Embraer 190s for Market Expansion
Aviation Week & Space Technology (06/16/2003, page 56)

JetBlue Airways plans an 11-hr. daily utilization rate for its Embraer 190s, which it will use in services to medium-size markets. "Typical regional jets didn't really fit into what we do, from an economic point of view. But the Embraer 190 had enough seats to create the economics possible to enter medium-sized markets."

The airline spent nine months studying the numbers, he said. In the end, the decision was "a no-brainer."

"Draw a 2,000-naut.-mi. circle [the range of the 190] around any city that has more than a half-million people, and the cities in the circle are candidates for JetBlue service," said Neeleman, adding, "They also can connect to each other"--which supports Boeing's 20-year forecast for increased point-to-point service.

The report said JetBlue saw opportunity in underserved markets where it could fill an aircraft with 80-100 passengers, but not necessarily 120--which sounded a positive note for the 70-100 market. It added the airline foresees a big market opportunity with the 190 at a 60-seat break-even point, versus 119 on the A320 at comparable fares and slightly less utilization rate per day. JetBlue's utilization rate for the A320 is 13 hr.

Mike Boyd of The Boyd Group airline consultancy pointed out New York JFK-based JetBlue would be able to use the aircraft in markets that Southwest and other carriers have not already "cherry-picked," for example, New York JFK to Akron, Ohio, or Wichita, Kan., or in markets where carriers such as Southwest would not venture.

The Embraer 190's operational costs, which Boyd says are 15-20% lower than those of the Boeing 737-600, are a plus. The aircraft has lower fuel burn and higher levels of passenger comfort but can carry essentially the same number of people in a much lighter airframe. It also has a large operating envelope, Boyd said.

However, pilot training costs would likely be higher, said Neeleman. He pointed out that pilots flying the 190 will be making less money than the A320 pilots. "It's airline economics. What we pay those pilots for the first 2-3 years they are working for us before upgrading to being a captain of an A320 will compensate for that training."

Pilots currently flying for JetBlue will stay with the A320 fleet "and will be an A320 captain before these planes even come," he said. "There will be a certain amount of fencing where [future] pilots will go to one aircraft type and stay there." A320 captains will receive the highest pay, followed by Embraer 190 captains. Pilots will have a one-time opportunity to transition permanently from one fleet type to the other. "We're not going to have bouncing back and forth," which adds cost and complexity




Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
User currently offlineSTT757 From United States of America, joined Mar 2000, 16907 posts, RR: 51
Reply 17, posted (11 years 2 months 2 days 13 hours ago) and read 3388 times:

"Mike Boyd of The Boyd Group airline consultancy pointed out New York JFK-based JetBlue would be able to use the aircraft in markets that Southwest and other carriers have not already "cherry-picked," for example, New York JFK to Akron, Ohio"

Airtran already flies LGA-Akron with 717s 3-4 times daily.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6437 posts, RR: 34
Reply 18, posted (11 years 2 months 2 days 13 hours ago) and read 3333 times:

According to Pilotpip - EMB 170 in STL:

"I don't know why, but it was going to Addison. It should be there a couple days. The captain thinks they were showing it to Southwest."



Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
User currently offlineSyncmaster From United States of America, joined Jul 2002, 2039 posts, RR: 10
Reply 19, posted (11 years 2 months 2 days 13 hours ago) and read 3292 times:
Support Airliners.net - become a First Class Member!

That article says they are looking at things to attract Business Travelers, would Connexion by Boeing be a good idea, maybe?

User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 20, posted (11 years 2 months 2 days 12 hours ago) and read 3247 times:

I'm selling my stock if this goes beyond the "consideration" stage.

Actually Gigneil, he's in good company. A longstanding caveat for investing in airlines has been "Buy Southwest only, and when they purchase anything other than 737s... SELL!"


They know what they're doing.

One has to wonder... didn't PanAm, TWA, Eastern, Peoplexpress, Braniff, etc think that they knew what they were doing... for the most part?  Big grin

[Edited 2003-10-21 22:57:56]

User currently offlineGigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
Reply 21, posted (11 years 2 months 2 days 12 hours ago) and read 3228 times:

Nice use of italics ya old queer.


One has to wonder... didn't PanAm, TWA, Eastern, Peoplexpress, Braniff, etc think that they knew what they were doing... for the most part?


Sure they did... as they watched their finances bleed away and their stock valuation plummet to nothingness, I'm sure they had a circle jerk in the executive lounge to congratulate themselves on a job well done.

A longstanding caveat for investing in airlines has been "Buy Southwest only, and when they purchase anything other than 737s... SELL!"

Its not like they announced a purchase of a diverse fleet with capabilities to cover the globe. They'd like to serve some smaller markets. Good for them.

I bet they'll lease a few frames and give it a try, and if it fails return the planes to the lessor in small pieces.

Or they'll just do nothing at all.

N


User currently offlineCitationX From United States of America, joined Sep 2003, 110 posts, RR: 0
Reply 22, posted (11 years 2 months 2 days 11 hours ago) and read 3139 times:

Not that I'm against SW buying the Embraer 170/190 series, but I am a bit concerned about the "monkey see - monkey do" reaction to JetBlue's latest fleet moves.

I know I am going to get flogged for writing this, but the jury is still out if JetBlue's purchase of the Embraer jets is going to help them, or run their costs out of control. Pioneering brand-new jets in a business plan which requires high daily fleet utilization is a risky deal. It usually takes a year or two for new jet operators to work dispatch reliability above the coveted, 99% goal. The A320 already met those reliability standards when JetBlue first purchased them, contributing much to their early success. But soon, with two types are in the fleet, maintenance and training costs will rise, just about the time JetBlue's first A320s come due for major maintenance overhauls.

Now SW is wanting to follow JetBlue's lead? I thought they already had a pretty good business model. Why change it now? Is JetBlue beating them head-to-head?



User currently offlineOkie From United States of America, joined Jul 2003, 3188 posts, RR: 3
Reply 23, posted (11 years 2 months 2 days 11 hours ago) and read 3101 times:

You can rest assured that WN has not made to many mistakes. As stated they have looked at many aircraft types and have not ordered another yet. I am sure if WN is truly interested then they will not jump on the 190 without some guarantee on costs. Then they will double pencil whip it for sure. I don't see them jumping on just because B6 made a move.

So the 170 is over at Addison, where are the reports from our DFW area A.netters.


User currently offlineL1011Fan From United States of America, joined May 2003, 271 posts, RR: 0
Reply 24, posted (11 years 2 months 2 days 11 hours ago) and read 3067 times:

Boeing still claims that the 717 has the lowest costs in the 100-seat segment. Given the fact that I've read Boeing is practically giving away the 717's right now and that they have (again, according to Boeing) a lower operating cost than the 190, I hope that WN is considering the 717.

25 Goingboeing : CitationX - you're not alone in that assessment.
26 Swafa30 : Now SW is wanting to follow JetBlue's lead? I thought they already had a pretty good business model. Why change it now? Is JetBlue beating them head-t
27 Post contains images Sllevin : A longstanding caveat for investing in airlines has been "Buy Southwest only, and when they purchase anything other than 737s... SELL!" I do believe i
28 TxAgKuwait : GoingBoeing: I wouldn't sell just yet.... WN has used more than one aircraft type during their semi-illistrious history. The 727-200s weren't all that
29 Planemaker : TxAgKuwait: A very reasoned, analytical post. Re:"The Embraer may be a good aircraft. It is shaped like a 737. It has 4 abreast seating. It holds 100.
30 DAL12 : When B6 made their order, many people were threatening to "sell their stock" and quickly pointed out how JBLU quickly fell after the announcement. The
31 Midway2airtran : Well, when demand rises, so does the cost of a product. It appears now that orders are already starting to pour into the EMB-170-190 program which wou
32 Goingboeing : When B6 made their order, many people were threatening to "sell their stock" and quickly pointed out how JBLU quickly fell after the announcement. The
33 DAL12 : Of course, there is the minor technicality that they haven't begun operating any of the new jets yet...just made the decision to buy them. Let's wait
34 RayChuang : I really think what WN is pushing Boeing to do is to build a lower-MTOW version of the 737-600 tailored to WN's needs. And I think the prospect of Boe
35 Sccutler : I believe I shall head out to ADS tomorrow and check out this mythical bird for myself. Film at 11.
36 Planemaker : Goingboeing: Re:"Not to rain on your JetBlue parade, but they have a breakeven load factor of over 80%." According to an AW&ST article the break-even
37 Cloudy : This almost certainly will not happen until WN expansion opportunities in new markets and in new, long-haul routes dries up. If it becomes impossible
38 717fan : According to some news reports WN is also looking at the 717....
39 Pilotpip : Something else to think about... While there are some people that have reservations about using this aircraft, it would still be cheaper to operate wi
40 Goingboeing : According to an AW&ST article the break-even point is 60%: Those are "estimates". I remember the term "fuzzy math" - that's what I think they've got g
41 Jeff G : Those are "estimates". I remember the term "fuzzy math" - that's what I think they've got going here. NOthing against the plane or the airline, but it
42 SunValley : In reading into the article, the choice of the EMB190 is purley speculative, as the writer simply put that it was the chief suspect/ I don't think tha
43 Post contains links CitationX : Here is a story on Aviation Daily's website concerning WN's near-term plans: http://www.aviationnow.com/avnow/news/channel_aviationdaily_story.jsp?id=
44 Cloudy : Additionally, the EMB190 has no operating stats, and as we all know whenever a new aircraft is introduced, the first carrier opeating it is the "guine
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