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The "Big Boys" Vs. JetBlue And Southwest  
User currently offlinePropJock04 From United States of America, joined Dec 2003, 76 posts, RR: 0
Posted (10 years 8 months 2 weeks 3 days 11 hours ago) and read 4276 times:

Over the past year or so while casually reading through the news section I am seeing an increasing number of articles about "The Big Boys" declaring war on jetBlue, but not much about Southwest being set in the sights of one of them. And to be perfectly clear when I say "Big Boys" I am talking about the legacy, non-lcc carriers such as AA and UA.

Here is my question--have "The Big Boys" pretty much given up on Southwest since nothing they seem to do has worked to squash SWA in the past? Is my line of reasoning correct to think that "TBBs" are focusing on jetBlue primarily since they are relatively new and more vulnerable?

Okay people...go at it!

21 replies: All unread, jump to last
 
User currently offlineInnocuousFox From United States of America, joined Dec 2003, 2805 posts, RR: 14
Reply 1, posted (10 years 8 months 2 weeks 3 days 5 hours ago) and read 4166 times:

The funny thing is, the "Big Boys" are the ones losing money. Looks like they already lost!


Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
User currently offlineJetBluefan1 From United States of America, joined Dec 2003, 2985 posts, RR: 14
Reply 2, posted (10 years 8 months 2 weeks 3 days 5 hours ago) and read 4131 times:

PropJock04,

I definitely see your point. It seems like the "big boys" such as NW, US, AA, UA, etc., have stopped going after SWA. Even HP isn't intentionally getting into fare wars with them, IMO. I think SWA is basically non-conquerable.

JetBlue is an easier target as it's not as well established as SWA.

JetBluefan1



Most people on a.net hate JetBlue. Get used to it.
User currently offlineRJpieces From , joined Dec 1969, posts, RR:
Reply 3, posted (10 years 8 months 2 weeks 3 days 3 hours ago) and read 4051 times:

Also, don't forget that when AA,UA, and DL aren't busy trying to kill B6, they are starting brancoff airlines that emulate them! Of course these new branch offs can't match the superlow costs of B6 and WN.

User currently offlineF9Fan From United States of America, joined Jan 2004, 696 posts, RR: 3
Reply 4, posted (10 years 8 months 2 weeks 3 days ago) and read 3994 times:

Don't forget F9, FL, HP, NK, and TZ. You can bet your bottom dollar that UA choze DEN to hub Ted primairly to compete with F9. Ted will also offer DEN-FLL routes, which UA doesn't fly, but F9 and NK do. Also, we all saw what NW did when F9 announced that LAX would be a "focus city". If you want to see something interesting, look at the DEN-ATL route. It is currently served by four carriers; FL, DL, F9 and UA. WN has been using a different strategy by serving the secondary airports, such as PVD instead of BOS, FLL instead of MIA, or BWI instead of DCA or IAD.

Until recently, the legacy carriers have been able to outlast the upstarts because of their deep resources. They used to be able to flood the markets the discounters served with cheap flights while still being able to hold their profits on other routes. Now, They no longer have the reserves to sustain this kind of attack. There are plenty of threats to the legacy carriers. AA is threatened by B6 at JFK. DL is threatened by FL at ATL. UA is threatened at DEN by F9 and at ORD by NK. As the 21st century gets underway, we are seeing a revolution in the airline industry that is the fulfillment of the promise of deregulation a quarter century ago.

F9Fan


User currently offlineBistro1200 From United States of America, joined Oct 2003, 337 posts, RR: 4
Reply 5, posted (10 years 8 months 2 weeks 3 days ago) and read 3947 times:

Come on! UA is not threatened at ORD by NK (Spirit). They have such few flights and few destinations that on a few particular routes, they compete. But not threatened! If I am a Chicago business traveler, I would choose AA or UA week-in and week-out due to schedule and destinations. Now if I'm a broke college student and I want to go on spring break, Spirit all the way.

Funny these same LCCs were the same ones crying to the DOT and DOJ in the mid 1990's when TBB were bracketing flights, offering dirt-cheap fares, and trying to squeeze out new entries into the market (WestPac, Sun Country, etc).

I will also bet you that the wages of people doing the same jobs are far different between LCC and TBB carriers. That's the thing I hate about LCCs, they pay their people crap (due to so many furloughs/economy) and make money on the backs of labor. I have worked for both LCC and now a legacy carrier, so I know what I am talking about.



Measure to the millimeter, mark with a crayon, cut with an axe.
User currently offlineOttoPylit From , joined Dec 1969, posts, RR:
Reply 6, posted (10 years 8 months 2 weeks 3 days ago) and read 3944 times:

"DL is threatened by FL at ATL."

I wouldn't exactly bet your bottom dollar on that. Sure, Airtran has shown growth over the years and has matured from the Valujet years. However, Delta has always had them in ATL, hands down. They can compete successfully in every market that FL wants to enter without having to "flood the market" as put it F9. All they have to do is put up the same fare and advertise it.

I think even Airtran has seen the limited ability of growing in ATL, and therefore has chosen to emulate SW by becoming a point-to-point carrier. They have half of C concourse and a few gates on D, but they will not get much more than those unless other airlines vacate gates. Delta has co-existed with FL in ATL for 10 years, what makes it seem they can't continue or need to be worried?


User currently offlineIflyatldl From United States of America, joined Nov 2003, 1936 posts, RR: 3
Reply 7, posted (10 years 8 months 2 weeks 3 days ago) and read 3919 times:

These carriers have a proven formula: If you're not making money on a run or loads aren't what were forcast: go in another direction. And as pointed out, WN does tend to service secondary airports, B6 has more of a Trans-Con focus, F9 hubs DEN, but has routes that all don't compete against UA. B6 saw the writing on the wall in ATL  Sad and chose to use their a/c on more fruiful routes. And were going to see a lot more of this in the next few years.  Smile


Ah, Summer, Fenway Park, Boston Red Sox and Beer.....
User currently offlineJeffrey1970 From United States of America, joined Apr 2001, 1336 posts, RR: 12
Reply 8, posted (10 years 8 months 2 weeks 2 days 23 hours ago) and read 3868 times:

Bistro1200,

What furloughs are you talking about? Are you talking about the many furloughs that the "big" airlines have had? or the relatively few furloughs that the LCC's have had? As a matter of fact I can't remember reading about furloughs from an LCC. I am sure one of the LCC's must have had a furlough but I can't remember. However I do remember the "big" airlines having furloughs.

God bless through Jesus,

Jeff



God bless through Jesus, Jeff
User currently offlineRjpieces From , joined Dec 1969, posts, RR:
Reply 9, posted (10 years 8 months 2 weeks 2 days 23 hours ago) and read 3839 times:

I'm sorry...I don't mean to be rude but I find it inappropriate signing a post "God Bless through Jesus." Feel free to preach religion to your family or yourself; but I think it should be kept off of A.net. Sorry if that bothers you, I just find it very inappropriate.

User currently offlineBistro1200 From United States of America, joined Oct 2003, 337 posts, RR: 4
Reply 10, posted (10 years 8 months 2 weeks 2 days 22 hours ago) and read 3802 times:

Jeff,

What I meant about the layoffs/furloughs is that while nearly all carriers have in the last three years let people go, the airlines hiring have faced a buyers' market. They LCCs have been expanding, and adding people at wages that pale in comparison to Majors. Look at the wages of FAs, pilots, and even professional staff between LCCs and the majors. Night and Day.

If these companies are so profitable, why are their people so poor (in comparison to the same staff at major airlines)?



Measure to the millimeter, mark with a crayon, cut with an axe.
User currently offlineCloudy From , joined Dec 1969, posts, RR:
Reply 11, posted (10 years 8 months 2 weeks 2 days 14 hours ago) and read 3615 times:

It is true that the big boys have stopped trying to erase Southwest from the scene. They have even more or less stopped trying to eliminate Jetblue and Airtran. They have not, however, stopped trying to eliminate more minor players. And they have not stopped trying to chase Jetblue and Airtran off of certain routes. They did succeed in getting Jetblue out of Atlanta

User currently offlineUAL777CONTRAIL From , joined Dec 1969, posts, RR:
Reply 12, posted (10 years 8 months 2 weeks 2 days 11 hours ago) and read 3500 times:

The so called big boys did a lot better in the month of DEC. With load factors.

UNITED 78.4
NORTHWEST 78.1
CONTINENTAL 77.0
DELTA 74.1
AMERICAN 73.7
US AIRWAYS 72.9
SOUTHWEST 64.0

Southwest didn't do as good for the month of DEC.

Loads are up.

UAL 777 CONTRAIL


User currently offlineBahadir From United States of America, joined Oct 2001, 1791 posts, RR: 10
Reply 13, posted (10 years 8 months 2 weeks 2 days 11 hours ago) and read 3497 times:

JetBlue? I flew them once.. Yeah you can take the leather seat, TV etc. if you are flying once / twice a year, but I like my United for my weekly coast to coast commute.

Waiting at JFK for 6 hours until the next flight cost me a day of work and lotsa headache..

So, I have one r/t experience with WN and one one-way experience on B6. I think B6 is better than Southwest. If you asked me you need to get to the airport 6 hrs before your flight and need to fly less than 2 hrs to put up with the WN.



Earthbound misfit I
User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 14, posted (10 years 8 months 2 weeks 2 days 11 hours ago) and read 3487 times:

The so called big boys did a lot better in the month of DEC. With load factors.

UNITED 78.4
NORTHWEST 78.1
CONTINENTAL 77.0
DELTA 74.1
AMERICAN 73.7
US AIRWAYS 72.9
SOUTHWEST 64.0

Southwest didn't do as good for the month of DEC.

Loads are up.


That's great news. But the most important thing to be "up" is profits. Are they up? What's the break even load factor for the others. SWA made a profit with a "down" load factor. Kind of like the market share thing...it's one thing to be number one in market share but losing money. It's a better thing to be number 2, but profitable.





User currently offlineInnocuousFox From United States of America, joined Dec 2003, 2805 posts, RR: 14
Reply 15, posted (10 years 8 months 2 weeks 2 days 9 hours ago) and read 3444 times:

That's is a good point regarding the load factors. If I was selling tix for $10 each, I could pack the planes... but only for so long. The bottom line is the revenue - expense on the system as a whole.


Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
User currently offline737doctor From United States of America, joined Mar 2001, 1332 posts, RR: 38
Reply 16, posted (10 years 8 months 2 weeks 2 days 8 hours ago) and read 3337 times:

Yeah, there is a difference between what we Southwest mechanics are paid vs. those who turn wrenches for the "big boys". We get paid more:

http://www.the-mechanic.com/mainbb.html

GOD BLESS SOUTHWEST!  Big grin



Patrick Bateman is my hero.
User currently offlineQwerty From United States of America, joined Mar 2001, 386 posts, RR: 0
Reply 17, posted (10 years 8 months 2 weeks 2 days 8 hours ago) and read 3306 times:

This bigs had higher loads than WN, but WN doesn't have as many parked planes as do the bigs.

In that light, I think WN is a Big Boy. They like to let you think they are the little kid, but they are really far from it.


User currently offlineCapt078 From United States of America, joined Jul 2003, 421 posts, RR: 1
Reply 18, posted (10 years 8 months 2 weeks 2 days 5 hours ago) and read 3219 times:

certainly, from a financial standpoint, jetblue is a much easier target than southwest. and, with jetblue sort of entering the market by storm, it becomes the newest threat and thus the one many want to extinguish first. but i think many people overlook the fact that jetblue doesn't fly from secondary airports (except longbeach). southwest was never such a big deal because it never went head-to-head at o'hare or jfk. but jetblue is attacking at primary airports, and doing so successfully. aside from longbeach and perhaps oakland, jetblue has only flown to major/primary airports (bos, jfk, den, new orleans, fll, pbi...), treading on the turf of the "big boys'.

User currently offlineUal777contrail From , joined Dec 1969, posts, RR:
Reply 19, posted (10 years 8 months 2 weeks 2 days 4 hours ago) and read 3200 times:

Loads are in fact up, but you'll notice I dint have the info for the profits or losses.

so don't assume, when we have facts and figures for profits or losses then we can assume it is cool to have empty flights for wn.


UAL 777 CONTRAIL


User currently offlineTxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 42
Reply 20, posted (10 years 8 months 2 weeks 2 days 1 hour ago) and read 3175 times:

A few comments on load factor.....

The conventional wisdom, adhered to by airline management (both good and bad for years) is that if your systemwide load factor is above 67% (2/3rds full) you need to add flights, because you are turning passengers away.

One reason that airline management sort of viewed this as a rule of thumb is because there is some truth in it.

The real problem is if you are "having to give seats away" and can't break even at a load factor at or below 67%.

Southwest adjusts capacity based on this axiom. If the load factor is over 70%...you see flights added in a particular market.....or you see fewer discounted tickets sold to firm up the yield.

If the load factor was 53% I might be concerned. It wasn't. I'm not.







User currently offlineJeffrey1970 From United States of America, joined Apr 2001, 1336 posts, RR: 12
Reply 21, posted (10 years 8 months 2 weeks 2 days ago) and read 3134 times:

Bistro1200,

Well I know Southwest is having some problems with negotiations with there FA's. I am not sure what all the issues are but I am sure pay is one of them. However, would you take a job for more money for a company that has a history of laying people off? or would you take the same job at another company for less pay, but you know that company has never layed anyone off?

God bless through Jesus,

Jeff



God bless through Jesus, Jeff
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