CitationX From United States, joined Sep 2003, 110 posts, RR: 0 Posted (5 years 10 months 3 weeks 6 days 16 hours ago) and read 5228 times:
7:22AM Southwest Air Considers Shift in Approach- WSJ (LUV) 16.17: Wall Street Journal story reports company is considering changes to address competition from low-cost carriers offering frills like first-class cabins and live TV. LUV says changes would be tactical, not strategic and company will stick with core strategy of high-frequency flights and good service. Changes LUV is considering include expanding fleet of 737's to include 100-seat Embraer 190 jets to address smaller markets, adding in-flight entertainment. One move LUV has decided on is expansion into Philadelphia market in May, unusual as company has avoided airports dominated by large carriers, as Philly is by U.S. Airways
Atcboy73 From United States, joined Sep 2001, 1100 posts, RR: 4 Reply 3, posted (5 years 10 months 3 weeks 6 days 15 hours ago) and read 5075 times:
Southwest can only get better, in my opinion,
This could be really incredible. With SWA admitting it may need to tweak a little and improve on an already great operation the pressure on the majors will only get greater.
Just imagine if SWA offered assigned seats and in flight TV.
What would there be to complain about from a normal everyday passenger stand point?
TOLtommy From United States, joined Dec 2003, 2587 posts, RR: 5 Reply 4, posted (5 years 10 months 3 weeks 6 days 15 hours ago) and read 5070 times:
I doubt WN would offer IFE unless they could show a revenue increase. I suspect they are seeing some kind of trend in which customers are willing to pay a little more for IFE.
Planemannyc From United States, joined Aug 2003, 935 posts, RR: 11 Reply 5, posted (5 years 10 months 3 weeks 6 days 15 hours ago) and read 5001 times:
This is in anticipation of competition from JetBlue, AirTran and Frontier.
Thus far, the Southwest strategy has been to do what the majors don't. Keep things simple. Have no hub-and-spoke. But as the domestic US market itself is shifting with success going the way of the LCC's, the competition of tomorrow will come from the likes of JetBlue. Chances are that these new LCCs will be the majors of the near future.
And that means it will take shift in strategy. Afterall, JetBlue is essentially an enhanced version of Southwest to a degree. And although WN for the most part does not compete directly with B6 on any city pair, that eventuality will come, and I bet WN recognizes that B6 probably has a better service offering (assigned seats, IFE) that will appeal to customers if the price is the same, and customers will choose B6.
Southwest is a smart airline, and it knows that its competition is changing. So it too is making the first moves to change with it. This tactical move is to test the water. I am not surprised.
Pe@rson From United Kingdom (England), joined Jan 2001, 16672 posts, RR: 60 Reply 6, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4907 times:
Two words: oh dear.
WN, the so-called mother of all low-cost carriers, is based around a number of so-called models, one of which being to operate only one aircraft in order to reduce training and maintainence costs and to aid an efficient and effective operation. Yet it is now considering acquiring a completely different type of aircraft, which will, of course, break away from this model.
Another model is that WN, the so-called mother of all low-cost carriers, does not offer any form of inflight entertainment, food or drink. Yet it is considering adding IFE, probably TVs. The likely result of this is an increase in price - even though WN's prices are, compared to those in the UK, already pretty expensive - even on routes of less than an hour.
It's funny, really, that WN, with all of its aircraft, is less profitable than Ryanair, who has far less aircraft. Perhaps WN should be looking more closely at what FR does- and thereby finding ways to improve - before deciding upon other strategies, all of which will undoutedly result in increase costs and consequently increased prices.
InnocuousFox From United States, joined Dec 2003, 2576 posts, RR: 25 Reply 7, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4867 times:
You forgot that another "model" was to keep stage lengths short. They have stopped doing that by adding all these trans-con flights. The longer the flight, the more of a glaring omission the IFE is.
Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
AA737-823 From United States, joined Mar 2000, 4022 posts, RR: 10 Reply 8, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4847 times:
NO on the Embraer 190s.
They're probably going to prove to be great airplanes, BUT- I want WN to stick with 737s. Flying that way is what they do best.
But then, the last time a company tried t make its stockholders happy, at the expense of the company itself, they ended up merging with Boeing.
R
For unto us a Child is born- unto us a Son is given!
Pe@rson From United Kingdom (England), joined Jan 2001, 16672 posts, RR: 60 Reply 9, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4843 times:
"The longer the flight, the more of a glaring omission the IFE is."
Perhaps. But even the longest flight is less than 5 hours in duration - hardly a long-haul.
Low prices will retain consumers.
If a longer flight, say LAX to BWI, was $99 return including tax WITHOUT IFE or $199 or more WITH IFE, I wonder which people would prefer.
Drerx7 From United States, joined Jun 2000, 3224 posts, RR: 8 Reply 10, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4812 times:
Keep in mind who is modelling who--Southwest was out long before Ryanair. Also two different countries and economies; also what is your source on which airline is more profitable? Ryanair does not nearly haul as many passengers as Southwest does. I'm not saying your not accurate in your statement but I'd like to see a source before I start cosigning.
FoxBravo From United States, joined Nov 2003, 2593 posts, RR: 7 Reply 11, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4789 times:
As I just pointed out on the thread discussing the overused notion of "commonality," the marginal benefits of operating a single aircraft type diminish when you reach a certain fleet size. When WN was small, having only 737s was extremely important in keeping costs down. However, at this point I don't think adding a new fleet type would raise its costs all that much.
In a nutshell, WN is running out of new markets that can support frequent service on 737s. So, to add smaller markets it can either (a) deviate from its strategy of starting a new market with frequent service to several destinations, or (b) deviate from its strategy of operating only 737s. Westjet, which generally serves much smaller markets, has opted for (a), as it serves a variety of thinner markets with 737s just a few times a week. For Southwest, however, (b) might make more sense.
In fact, it might not have much choice, given JetBlue's decision to buy 190s...I think WN knows as well as B6 that there are tons of smaller markets held captive by the high fares of the major airlines and their regional affiliates. WN is not going to roll over and let B6 lock up all those markets.
Pe@rson From United Kingdom (England), joined Jan 2001, 16672 posts, RR: 60 Reply 12, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4761 times:
"Southwest was out long before Ryanair."
Quite, but just because you've been around for longer does not mean you're better.
Yes, diseconomies of scale could be an issue, but we're not in a position to decide this because we don't have the statistics.
Pe@rson From United Kingdom (England), joined Jan 2001, 16672 posts, RR: 60 Reply 13, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4753 times:
"Two different countries and economies"
Yes, but I am aruging that price is still the most important factor in retaining consumers.
EA CO AS From United States, joined exactly 8 years ago today! , 9889 posts, RR: 73 Reply 14, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4739 times:
Perhaps. But even the longest flight is less than 5 hours in duration - hardly a long-haul.
Tell a customer that a nearly 5 hour flight isn't "long haul" and I think you'd have someone staring at you the same way a calf stares at a new fence.
If a longer flight, say LAX to BWI, was $99 return including tax WITHOUT IFE or $199 or more WITH IFE, I wonder which people would prefer.
Well, considering that customers could fly LGB-IAD nonstop on jetBlue as opposed to one-stop service on Southwest...and considering that jetBlue also provides in-seat, on demand IFE...suddenly that extra $100.00 each way seems to be a ridiculously inexpensive way to receive added value.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
Pe@rson From United Kingdom (England), joined Jan 2001, 16672 posts, RR: 60 Reply 15, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4732 times:
I seem to recall that WN announced the possibility of operating non-737 aircraft several months ago, yet further news was not forthcoming. This announcement might not, of course, lead to anything.
B747-437B From , joined Dec 1969, posts, RR: Reply 16, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4719 times:
price is still the most important factor in retaining consumers
A consumer who uses price as his primary selection criterion cannot be "retained", since he treats each transaction seperately and picks the lowest priced option each time. You can only "retain" consumers who discriminate on grounds other than price, either by offering them those value-added services for a premium or by offering a unique selling proposition that includes low price as a feature.
Pe@rson From United Kingdom (England), joined Jan 2001, 16672 posts, RR: 60 Reply 17, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4714 times:
"customers could fly LGB-IAD nonstop"
WN has 2 daily non-stop flights between LAX and BWI, with three on a Wednesday. Don't assume that all passengers wish to visit Washington city itself.
Pe@rson From United Kingdom (England), joined Jan 2001, 16672 posts, RR: 60 Reply 18, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4702 times:
"A consumer who uses price as his primary selection criterion cannot be "retained", since he treats each transaction seperately and picks the lowest priced option each time."
And what if WN offers the lowest prices each time? The consumer will be retained. For example, I always fly U2 over any other airline.
---
Anyway, we all have our own opinions, none of which will change by reading other people's replies.
EA CO AS From United States, joined exactly 8 years ago today! , 9889 posts, RR: 73 Reply 19, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4702 times:
A consumer who uses price as his primary selection criterion cannot be "retained", since he treats each transaction seperately and picks the lowest priced option each time. You can only "retain" consumers who discriminate on grounds other than price, either by offering them those value-added services for a premium or by offering a unique selling proposition that includes low price as a feature.
Bingo! And Sean reminds me why he's a part of my respected users list!
I like the term "mercenary consumer" to define this segment, by the way.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
Pe@rson From United Kingdom (England), joined Jan 2001, 16672 posts, RR: 60 Reply 20, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4686 times:
I love a nice and friendly debate. Shame it's over the 'net, but hey.
SWAbubba From United States, joined Mar 2002, 154 posts, RR: 1 Reply 21, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4669 times:
WN has considered every new aircraft that has come out in the last 30 years. They are doing the same with the E-190. The press likes to run articles about this like it's some big news, but it's actually quite routine.
Pe@rson,
As far as food or drink, WN offers full drink service on all flights as well as various kinds of snacks depending on the length of the flight. Maybe you meant no meals?
Comparisons with Ryanair are irrelevant as they do not operate in the US domestic market, do not pay the same taxes, are not subject to the same economic cycles, etc. WN was making loads of money prior to 9/11 and will again once the economy picks up.
WN's longest flight is BWI-SJC and was blocked at 6 hours the last time I flew it. If I was paying to sit in the back I would gladly pay a few dollars to be able to watch live TV on a flight that long. I suspect that WN is waiting for the prices of the IFE systems to come down enough to make it worthwhile, and although it may be several years away I think eventually you will see some type of IFE on WN.
I agree completely that low prices will retain customers, but I think the difference in ticket price will eventually be just a few dollars not double the ticket price.
Pe@rson From United Kingdom (England), joined Jan 2001, 16672 posts, RR: 60 Reply 22, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4629 times:
"As far as food or drink, WN offers full drink service on all flights."
Free-of-charge?
"Comparisons with Ryanair are irrelevant as they do not...pay the same taxes."
The level of taxation on flights FROM the UK is frightfully high.
Could you give me some indication as to the various taxes on short flights, say 1-2 hours in duration?
Drerx7 From United States, joined Jun 2000, 3224 posts, RR: 8 Reply 24, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4590 times:
I'm still waiting on the source of your information Pe@rson. Until I see some statistics, its all opinion, which we are all entitled to. And yes Southwest service is free of charge-except Alcohol.
EA CO AS From United States, joined exactly 8 years ago today! , 9889 posts, RR: 73 Reply 25, posted (5 years 10 months 3 weeks 6 days 14 hours ago) and read 4593 times:
I suspect that WN is waiting for the prices of the IFE systems to come down enough to make it worthwhile, and although it may be several years away I think eventually you will see some type of IFE on WN.
Dedicated, permanent IFE systems are only economical when the aircraft they're installed in are operated on a closed-cycle, never leaving those longhaul segments.
WN's schedules suggest they do NOT do this routinely, meaning they'd have to equip ALL their 73G aircraft for IFE, not just the ones that operate longhaul segments. That's a spendy proposition, even for them.
They may be better off selecting portable handheld devices like the APS digEplayer, invented by an Alaska Airlines ramp agent:
Making these units available for rental on longhauls would eliminate the costly expense of installing and maintaining dedicated IFE equipment on each aircraft, not to mention the added fuel consumption from carrying those heavy dedicated systems.
It also offers expanded media options to the consumer, instead of giving everyone the same movie or TV show at once.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
26 ONT 737: Pe@rson, here is the tax breakdown in the US. The airline industry is taxes more than tobbacco and alcohol. Federal Excise Tax - It's 7.5% of the base
27 Luv2fly: The system that AS has looks very nice, and I for one am impressed. Good job and a real nice alternative to a installed and dedicated IFE system.
28 Goingboeing: Well, considering that customers could fly LGB-IAD nonstop on jetBlue as opposed to one-stop service on Southwest...and considering that jetBlue also
29 Pe@rson: Cheers for that, ONT. I'm trying to find the figures, Drerx. Give me some time.
30 Pe@rson: Cheers for that, ONT. I'm trying to find the figures, Drerx. Give me some time. It would speed it up if you could find WN's net profit for last year.
31 Ssides: Perhaps WN should be looking more closely at what FR does- and thereby finding ways to improve - before deciding upon other strategies, all of which w
32 Luv2fly: Goingboeing I think you are correct, also remember YX - Midwest use to offer a better inflight meal service than the others and they just barely avoid
33 Pe@rson: "Like getting fat subsidies to fly out to middle-of-nowhere airports?" What's wrong with getting "fat subsidies"? If you can get them, then brilliant.
34 EA CO AS: They could fly nonstop LAX-BWI on Southwest. I stand corrected! I didn't realize they'd begun nonstop service on that route. But I gotta disagree with
35 Pe@rson: Hey folks - it's getting a bit hot in here, so let's all cool down and relax. We don't know what WN will do - if anything - so instead of arguing blac
36 Goingboeing: So I gotta ask EA CO AS...if you weren't non revving and pulled out the wallet to buy a ticket, what shows are on that you are willing to pay $100 to
37 DCA-ROCguy: In fact, it might not have much choice, given JetBlue's decision to buy 190s...I think WN knows as well as B6 that there are tons of smaller markets h
38 EA CO AS: if you weren't non revving and pulled out the wallet to buy a ticket, what shows are on that you are willing to pay $100 to watch?? Personally, I'd ch
39 Goingboeing: In the words of Ron Popeil....set it an forget it (repeat for 5 hours on a redeye). For me, the jury is still out on IFE...when it's in a larger fleet
40 SWAFA30: Demanding that new markets support 10 daily 73G's--almost 1,400 seats--is no longer an effective growth strategy Perhaps, if the assumption is that t
41 STT757: "Yet it is considering adding IFE, probably TVs" I might be the only one but I think they (WN) may go in a different direction besides personal TVs, I
42 LN-MOW: //// Like getting fat subsidies to fly out to middle-of-nowhere airports? I have flown FR and think they have a great product, but their operation wou
43 ConcordeBoy: Just imagine if SWA offered assigned seats and in flight TV. What would there be to complain about from a normal everyday passenger stand point? uh...
44 Luv2fly: Yes International is SO important to all the airlines. Funny the US LCC's that do not offer service across the pond, are doing so well financially, an
45 B747-437B: Yes International is SO important Last I checked you could still drive to Paris, TX Have you tried swimming to France lately? Lots of icebergs near Gr
46 Luv2fly: Yes International is SO important Last I checked you could still drive to Paris, TX Have you tried swimming to France lately? Lots of icebergs near Gr
47 Barney Captain: "Last I checked you could still drive to Paris, TX" Last I checked, you could still easily drive most of the routes we fly, yet that's where our bread
48 DCA-ROCguy: Perhaps, if the assumption is that the only growth opportunities that exist are in smaller markets. The decision to enter PHL suggests that WN managem
49 CanadaEH: I've used this example in the past, and I'll use it again. The airline "model" can be compared to that of a car, a Mustang, if you will. There are thr
50 SWAFA30: There are still a few large markets, and more medium-size markets, that WN does not serve. In several threads on the topic, forum members have used ce
51 Sllevin: I suspect that WN is going to have to choose a second fleet type, and the 190 is about the right choice. They need a machine that moves 100 passengers
52 Atrude777: and yet these words keep coming through my mind... qouted by Herb himself,(I think thats what he said maybe someone can help me... "The only thing we
53 Goingboeing: I'll offer a differing opinion about Southwest "needing" a smaller aircraft. A 190 seats 20 or so passengers less than a 737-200 or 500. Southwest ope
54 TxAgKuwait: I liked this statement: >>Yes International is SO important Last I checked you could still drive to Paris, TX Have you tried swimming to France lately
55 APAOps5: CanadaEH, In response to your example: "Sure my example sounds a little funny, but the days of the base, no-frills, bare-bones operation are on its wa
56 DeltaSFO: Funny, how Iceland is Green and Greenland is all ice. But I digress. This begs the bigger question....why in the world would anyone want to go to Pari
57 Gigneil: Tell a customer that a nearly 5 hour flight isn't "long haul" and I think you'd have someone staring at you the same way a calf stares at a new fence.
58 TxAgKuwait: Hey DeltaSFO...long time no see. Maybe you've been hanging out in Paris, France. Actually, I wish I had been hanging out in Paris, Texas. It's prettie
59 Gigneil: There is no such thing as an ugly American. WHOA. I want some of what you're on.
60 US653: Off hand, I don't how many seats the 737-600 has, but could that be a more cost effective option than looking at a new type like the ERJ-190? Especial
61 ScottB: My thought is that WN doesn't need that additional fleet type just yet. As Goeingboeing said, the number of passengers in an EMB 190 isn't that much s
62 Gigneil: US653- The 736, like the 318, is only cost effective on high yield long stages, unless your costs of owning it (i.e. fleet management/composition) buf
63 Sllevin: My thought is that WN doesn't need that additional fleet type just yet. As Goeingboeing said, the number of passengers in an EMB 190 isn't that much s
64 SWAFA30: 1) the -200's are on the way out. And WN only has a handful (50?) of -500's. Most of the fleet are the larger -300's and -700's. There are currently 2
65 Cloudy: One thing we are forgetting....The economy and population do not cease to grow as WN grows. Some markets that are not good enough now will be good eno
66 ScottB: Props will not happen at Southwest unless Americans change their attitudes about propeller-driven aircraft wholesale. Remember that perception on airl
67 Delta767300ER: I think the Embraer 190 would be excellent if they decided to go to a second aircraft type. How about the 717? similiar in capacity to the Embraer 190
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