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Song V Southwest : We Have A Winner?  
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Posted (9 years 2 months 3 weeks 7 hours ago) and read 4765 times:

According to DOT data Delta has a 59% passenger share compared to Southwest's 30% share in the BDL-MCO market. Additionally Southwest's average fare is 92% of Delta's amount.

In the BDL-TPA market Delta has a 64% market share compared to Southwest's 27%. Southwest's average fare is 98% of Delta's average fare.

This despite the fact that Southwest has around a 69% share of the non-stop seats.

Connecting and thru service would obviously effect these numbers but on the face of it seems like Southwest is getting embarrassed. That's 47% and 41% of Delta's revenue despite have 69% of the non-stop service.

Can anbody add to this? Maybe I'm missing something?

60 replies: All unread, showing first 25:
 
User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 1, posted (9 years 2 months 3 weeks 7 hours ago) and read 4751 times:

What's Song's profit? Case closed.

User currently offlineACAfan From United States of America, joined Apr 2004, 710 posts, RR: 6
Reply 2, posted (9 years 2 months 3 weeks 7 hours ago) and read 4719 times:

I thought the SONG 757 has a lower CASM than the WN 737 ?


Freddie Laker ... May be at peace with his maker ... But he is a persona non grata ... with IATA
User currently offlinePhatfarmlines From United States of America, joined Sep 2001, 1353 posts, RR: 1
Reply 3, posted (9 years 2 months 3 weeks 7 hours ago) and read 4702 times:

Well summarized Goeingboeing!

User currently offlineDeltaMIA From United States of America, joined Feb 2004, 1672 posts, RR: 17
Reply 4, posted (9 years 2 months 3 weeks 7 hours ago) and read 4690 times:

Quoting Goingboeing (Reply 1):
What's Song's profit? Case closed.

You post as you know, please share. I think you are confusing a single subsidiary with it's large parent corporation.



It's a big building with patients, but that's not important right now.
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 5, posted (9 years 2 months 3 weeks 6 hours ago) and read 4668 times:

I would think WN still has a lower CASM in this particular market but nothing to the extent that it would make up for that kind of revenue gap.

User currently offlineAA7573E From United States of America, joined Nov 2003, 475 posts, RR: 2
Reply 6, posted (9 years 2 months 3 weeks 6 hours ago) and read 4659 times:

Goingboeing, you are missing the point.

The road to building profitability is paved through the acquisition of market share. Many had written Song off as a failed endeavor before they even took to the air. The fact that they control several head to head markets with WN is quite impressive, and shows traction for the product. It would be a safe extrapolation that market share growth is occurring in other segments as well.

As to the profits, Song is not a company, but rather a division of Delta, and as such they do not report a separate P and L statement. Regardless of the fact that the overall company is not doing well, it is obvious that Song is in fact doing well, and beating WN in key markets.

Turn the question around though, and show me a double digit market gain by WN in a market dominated by Delta. Case closed.



See you up front!
User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 7, posted (9 years 2 months 3 weeks 6 hours ago) and read 4643 times:

Quoting Padcrasher (Thread starter):
Can anbody add to this? Maybe I'm missing something?

What am I missing here? If I understand your post correctly, this is about exactly two routes - BDL-MCO and BDL-TPA - don't you think that an embarrassment would require a bit more than just two routes?

Are these the only two routes on which these two compete? If not, how does the picture look accross the board?

If the situation is that way on all routes where both compete - or at least on a majority of the routes, that's when you could say that DL/Song is beating WN... but two routes?

Regards,
Frank



Smile - it confuses people!
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 8, posted (9 years 2 months 3 weeks 6 hours ago) and read 4620 times:

Quoting Leskova (Reply 7):
Are these the only two routes on which these two compete?

Pretty much.

FLL-BDL would be the only other route, but knowing FLL and BDL that would have been even more lopsided. (The data was not available since WN has not been in this market long )


User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4499 posts, RR: 33
Reply 9, posted (9 years 2 months 3 weeks 6 hours ago) and read 4588 times:

My, my, aren't Delta and network partisans sensitive about Song's numbers! So what if Song is a "division?" It's a product of its own with a distinct identity competing in a specific market segment. If Song contributes so much value to the Delta brand overall, Delta should be happy to tell their shareholders and the world how profitable *the Song unit* is. Maybe it is, maybe it isn't. It would be funny if Southwest is getting better yields off that 92 percent fare, but of course we'll never know.

Delta has been the largest carrier in Hartford, a business-heavy medium-size market where FF miles and connections matter a lot, for years. No one should be surprised that Song would get very good market share there.

Jim



Need a new airline paint scheme? Better call Saul! (Bass that is)
User currently offlineFlyAUA From Austria, joined May 2005, 4604 posts, RR: 56
Reply 10, posted (9 years 2 months 3 weeks 6 hours ago) and read 4587 times:

Quoting Leskova (Reply 7):

For both Song's and Southwest's sake I hope they do not compete against eachother on too many routes. LCCs should know better and stay out of each other's way. Competition between 2 LCCs can get very filthy Big grin



Not drinking, also isn't a solution!
User currently offlineDfwRevolution From United States of America, joined Jan 2010, 968 posts, RR: 51
Reply 11, posted (9 years 2 months 3 weeks 6 hours ago) and read 4585 times:

Quoting AA7573E (Reply 6):
The road to building profitability is paved through the acquisition of market share

It's a double-edged sword: it can easily be the road to low yields and bankruptcy.

Quoting AA7573E (Reply 6):
Turn the question around though, and show me a double digit market gain by WN in a market dominated by Delta.

WN makes a point not to chace market share for the sake of market share. They find routes that will support a minimum amount of traffic for the route to break even, and every seat after that is icing on the cake. That's how they've become the largest domestic airline in the U.S.

Here's the jist of this thread: WN isn't dominant in every single market they fly. Excellent observation, Captain Obvious  scratchchin 


User currently offlineFlyingTexan From , joined Dec 1969, posts, RR:
Reply 12, posted (9 years 2 months 3 weeks 6 hours ago) and read 4569 times:

Quoting Goingboeing (Reply 1):
What's Song's profit? Case closed.

I love it!

Quoting AA7573E (Reply 6):
The road to building profitability is paved through the acquisition of market share.

As long as that market share is profitable.

Quoting Leskova (Reply 7):
What am I missing here?

Frank –

Padcrasher hates SWA and other LCCs like AirTran (although I think she'd love FL because they are the only major domestic carrier that pays 5% commission on every published fare to travel agents, but that’s a moot point and off-topic).


User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 13, posted (9 years 2 months 3 weeks 6 hours ago) and read 4557 times:

Quoting Padcrasher (Thread starter):
WN isn't dominant in every single market they fly. Excellent observation, Captain Obvious

No that's where you're wrong. I went back over these routes when Delta Express was in these markets and not only did it look like WN had just as high a load factor, they had higher average fares.

This is a blow out.


User currently offlinePositiverate From United States of America, joined May 2005, 1590 posts, RR: 8
Reply 14, posted (9 years 2 months 3 weeks 6 hours ago) and read 4543 times:

Going Boeing, do you have some insight on Song's revenues that you care to share?

User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 15, posted (9 years 2 months 3 weeks 6 hours ago) and read 4457 times:

Quoting DfwRevolution (Reply 15):
Two routes are indicitive of nothing.

I can only hope the decision makers at Southwest share your bravado..LOL

Carry on, don't worry about two little markets that might just be a taste of what you have in store.


User currently offlineLuv2fly From United States of America, joined May 2003, 12090 posts, RR: 49
Reply 16, posted (9 years 2 months 3 weeks 6 hours ago) and read 4424 times:

Quoting DfwRevolution (Reply 15):
Yes Padcrasher... you've uncovered the scandal of WN, contact the Washington Post in a dark parking lot and you can be Deep Throat II. Keep that weedwacker of a brain going and try to extrapolate WN's mysterious profitability.

And who says there is no God! Priceless!



You can cut the irony with a knife
User currently offlineDeltaMIA From United States of America, joined Feb 2004, 1672 posts, RR: 17
Reply 17, posted (9 years 2 months 3 weeks 6 hours ago) and read 4405 times:

Quoting DfwRevolution (Reply 15):
Two routes are indicitive of nothing

She is just pointing out two routes, but more and more of these examples are popping up around WN's system. Their profit continues to drop and the most recent profit was on the coat tails of a smart fuel hedging effort. I highly doubt WN said a year ago that the only way they make a profit this year was because of hedging fuel.
I agree they have a great business model, but as the industry continues to deal with too much capacity market share is important. If you are going to compete on a route with a bunch of competitors you better be beating those competitors.

Quoting DfwRevolution (Reply 15):
2. WN sells more full-fare, non-discounted tickets than just about any other domestic airline.

True, but those full fares on average are their $79 FLL-MCO, or $79 OAK-SNA fares, not the $249 BDL-LAX fare.



It's a big building with patients, but that's not important right now.
User currently offlineFlyingTexan From , joined Dec 1969, posts, RR:
Reply 18, posted (9 years 2 months 3 weeks 6 hours ago) and read 4356 times:

Quoting DfwRevolution (Reply 15):
Yes Padcrasher... you've uncovered the scandal of WN, contact the Washington Post in a dark parking lot

 hyper  Lol!

Quoting DeltaMIA (Reply 18):
True, but those full fares on average are their $79 FLL-MCO, or $79 OAK-SNA fares, not the $249 BDL-LAX fare.

Those fares are more likely around the $90-$100 mark, as are most SWA short hops


User currently offlineDeltaMIA From United States of America, joined Feb 2004, 1672 posts, RR: 17
Reply 19, posted (9 years 2 months 3 weeks 5 hours ago) and read 4317 times:

Quoting FlyingTexan (Reply 19):
Those fares are more likely around the $90-$100 mark, as are most SWA short hops

Yeah I was just going off of memory. Full fare MCO-FLL is $83, Full fare SNA-OAK is $103 and Full Fare BDL-LAX is $299.
The point was to show WN's full-fare and that a majority of the full-fares are purchased on short hops.



It's a big building with patients, but that's not important right now.
User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4499 posts, RR: 33
Reply 20, posted (9 years 2 months 3 weeks 5 hours ago) and read 4258 times:

She is just pointing out two routes, but more and more of these examples are popping up around WN's system. Their profit continues to drop and the most recent profit was on the coat tails of a smart fuel hedging effort. I highly doubt WN said a year ago that the only way they make a profit this year was because of hedging fuel.

Which routes in particular? There may be other examples, but I don't have time to do number-hunting right now.

Of course, fuel was substantially less expensive in early 2004, so it's unlikely that WN would have said that good fuel-cost management was as important then as it is now.

Jim



Need a new airline paint scheme? Better call Saul! (Bass that is)
User currently offlineBeauing From , joined Dec 1969, posts, RR:
Reply 21, posted (9 years 2 months 3 weeks 5 hours ago) and read 4255 times:

Quoting AA7573E (Reply 6):
Turn the question around though, and show me a double digit market gain by WN in a market dominated by Delta

How much of Song's market gain came at the expense of Delta?


User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6603 posts, RR: 24
Reply 22, posted (9 years 2 months 3 weeks 5 hours ago) and read 4254 times:

Quoting Padcrasher (Thread starter):
In the BDL-TPA market Delta has a 64% market share compared to Southwest's 27%. Southwest's average fare is 98% of Delta's average fare.

This despite the fact that Southwest has around a 69% share of the non-stop seats.

I think your information is a little erroneous.

WN flies BDL-TPA 2x daily using 737's thats about 260 seats each way daily.
DL flies BDL-TPA 2x daily using Song 757's that's 398 seats each way daily.

So how does WN have 69% of the nonstop seats?


User currently offlinePVD757 From United States of America, joined Aug 2003, 3412 posts, RR: 17
Reply 23, posted (9 years 2 months 3 weeks 5 hours ago) and read 4248 times:

MCO-BDL (3rd quarter 2004):

DL Song 3x daily 757 (199 seats each) or 597 seats each way
WN 2x daily 73G (137 seats each) or 274 seats each way

DL has 68.54% of the capacity
WN has 31.46% of the capacity

3Q04 DOT data shows that:

The MCO-BDL market sees an average of 1000 pax a day total (500 each way).

DL has a 58.71% market share (a little below the % of capacity) at an average fare of $111.49 (total revenue of $65,444 per day). That averages out to $54.81 per available seat of revenue (65444 divided by 1194 seats).

WN has 30.21% of the market share (just below % of capacity) at $102.87 (total revenue of $31,066 per day). That averages out to $56.68 per available seat.

Looks like WN is earning more revenue (at less cost to the consumer) per available seat in the market (more than $2.00 per seat in fact). Never mind the cost side of the equation where Song is at best the same as WN. DL has more market share because they are offering many more seats, and that's about it! DL's average load factor (assuming no one connects to MCO - which isn't the case) is 49.16% (587 divide by 1194). WN's is 55.11% (302 divided by 548), despite having less frequency to choose from!

Please do the math before making claims, because you can rest assured I will if I think your wrong!

WN WINS!!!

Oh wait, but DL has more market share, WN should pull out of BDL immediately!

Oh yeah, take a look at the PVD-MCO market where DL had DL Express through the summer of 2003. Look what WN did there - DL ran with their tales between their legs (this is despite the fact that I am hoping for a return to the market by DL either with Song or the 170's, but that's another thread)!

[Edited 2005-06-01 21:31:52]

User currently offlinePVD757 From United States of America, joined Aug 2003, 3412 posts, RR: 17
Reply 24, posted (9 years 2 months 3 weeks 5 hours ago) and read 4130 times:

BDL-TPA (773 average daily pax):

DL:

market share: 64.43%
seat capacity: 74.39%
2x daily 757 398 seats each way/796 total seats/day
average fare: $104.15
average revenue per day: $51,866
average revenue per available seat: $65.16

notes: like MCO DL offers more seat capacity than market share

WN:

market share: 26.64%
seat capacity: 25.61%
1x daily 73G 137 seats each way/274 total seats/day
average fare: $102.28
average revenue per day: $21,069
average revenue per available seat: $76.89

notes: like MCO, WN offers less seats than it's market share and really blows DL out of the water with the average revenue per available seat ($11.00 plus).

Again, WN wins - so do the BDL passengers and WN's stockholders...


25 Mariner : What is so alarming about that statement is that so many people running airlines still believe it. It is the Rono Dutta School of Airline Management
26 Nonrevman : Before the rest of my post is made, a short disclaimer: I am not here to bash Southwest Airlines or their business model. It obviously works for many
27 Goingboeing : Unless and until Delta breaks out the numbers of Song, and as long as the parent company is experiencing huge losses, then it doesn't matter...if Del
28 Padcrasher : Is that your final answer pvd757? You are saying that DL averaged 3 departures over the Quarter versus 2 by Southwest?
29 PVD757 : With all due respect, I hate the open seating deal too. I also love the 757 and IFE, but the thread is about market specifics, not whether or not one
30 Padcrasher : Only 1 daily TPA departure during the Quarter?
31 ScottB : Padcrasher- Yes, in the 3rd quarter of 2004 (the quarter for which your DOT numbers apply), Southwest operated two daily round-trips from BDL to MCO a
32 DAYflyer : I concur. There is a lot of that brand mentality and loyalty at work. After all, (according to an interview with Herb K) WN planes flew with about 5
33 PVD757 : Thanks ScottB. Yes and no Padcrasher. They had 2 daily roundtrip flights between MCO and BDL versus DL's 3 daily roundtrip flights during the 3rd Qua
34 Post contains images FLAIRPORT : Yes, but FLL-BDL is a n/s for Song and has stops for WN. If WN offered a n/s it would have more competition than MCO and TPA. (as 2 song N/s would eq
35 Padcrasher : You're actually incorrect. Song was on a reduced schedule during this time. And WN did have 2 flights on certain days. But you're no more guilty of ba
36 N77014 : Really insignificant news. These are leisure markets from cities that DL has been in for longer than WN has been in business. I'm beginning to feel WN
37 Incitatus : Agreed. I will only deal with Southwest and Southwest's travelers if the price is about 1/3 of any other airline in the same market.
38 Post contains images JetBlueAtJFK : Yes! It is 2 routes, get over it LOL, like said above if they were great why don't they release them or try to more like them Ok but we are not talki
39 AADC10 : Some posters seem to be missing the point. On a couple of routes where Song and Southwest go head to head, Song is leading. This is easy to believe be
40 DeltaMIA : I am sure just about everyone in this thread would choose Song as well.
41 Goingboeing : And you have no idea how thankful this Southwest traveller is for that.
42 Nonrevman : We are talking about two airlines going head to head on certain routes and that topic could naturally include differences that these two carriers hav
43 Jetstar : Maybe Song is ahead of WN in some markets they compete head to head, but is DL making money on these routes. Just look at WN’s seat mile costs and S
44 Post contains images FlyingTexan : Uber, cult-like, brand-loyalty here.
45 Midway2AirTran : Apparently the large parent Corporation is recording billion-dollar losses per quarter quite consistantly of recent? Maybe that's an small indication
46 OttoPylit : I don't know what fares you were looking at, but it wasn't Delta's. Keep in mind that Delta Express was around while Neeleman was still having to suc
47 Ejmmsu : One must remember that without WN, there would be no song. There would be no need for an airline like DL to become more efficient. The fares would be
48 DCA-ROCguy : I for one would not choose Song most of the time over Southwest, were I to fly a route with that choice. I give most of my business to the reformers.
49 DeltaMIA : Let us know when B6 puts on the boxing gloves and ventures into BDL. Song, like B6, competes with all carriers in their respected markets. Song is no
50 DeltaMIA : This is because you haven't tried the product. If you had you would likely choose Song. Who would you choose head to head if your choices were WN or
51 Post contains images DCA-ROCguy : This is because you haven't tried the product. If you had you would likely choose Song. Who would you choose head to head if your choices were WN or B
52 Post contains images DeltaMIA : Now I know your lying. If you take away the PTV's how is B6 a reformer? They aren't the first to offer assigned seating. I don't even consider them a
53 PlanesNTrains : Don't they have some of the lowest seat-mile costs in the industry? I would call that a LCC. -Dave
54 Goingboeing : I'm not so sure about this. Southwest is consistant, whether it's a holiday or not. Their revenue management says "We can afford to sell X number of
55 WestIndian425 : Amen. I couldn't have said it better myself. Neil
56 Richierich : Hahaha! That was a good one DeltaMIA. Somehow with this statement, you managed to lose all credibility on your previous well-thought comments.
57 DCA-ROCguy : If you take away the PTV's how is B6 a reformer? They aren't the first to offer assigned seating. I don't even consider them a LCC, just a lower costi
58 DeltaSFO : What's Song's profit? Case closed. I don't know for certain, and neither do you. But the fact that Song not only survived Grinstein's company-wide bus
59 WindowSeat : Of course, just like any other business competition brings about the best for consumers. Does not mean that they have to be loyal to any one or the o
60 DeltaMIA : This is what DL does during holiday times. I can't speak for other airlines, but DL doesn't "fire-sale" the holidays. I was responding to the questio
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