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How Much Longer Will WN Be Able To Do What They Do  
User currently offlinec5load From United States of America, joined Sep 2008, 917 posts, RR: 0
Posted (4 years 2 months 6 days 6 hours ago) and read 10939 times:

We all know that Southwest has been the thorn under the legacies paw with their friendly service, free checked bags, complimentary drinks onboard (non-alcoholic), etc. But how much longer will this be able to last. I know it's a good thing, but will WN really be able to continue this for a long while still, with fuel prices creeping up and the economy the way it is?


"But this airplane has 4 engines, it's an entirely different kind of flying! Altogether"
40 replies: All unread, showing first 25:
 
User currently offlineflyguy89 From United States of America, joined Feb 2009, 1924 posts, RR: 20
Reply 1, posted (4 years 2 months 6 days 5 hours ago) and read 10875 times:

Well they were one of the few carriers announcing a profit last quarter so I'd say they're doing pretty well right now. Of course with any business you need to adapt the business model to the environment which, I think, WN has proven they can do. I'd say WN will be fine for the near to mid-term future.

User currently offlineGEG2RAP From United States of America, joined Sep 2003, 851 posts, RR: 0
Reply 2, posted (4 years 2 months 6 days 4 hours ago) and read 10618 times:

This question needs to be asked about almost every other major airline before Southwest.
Southwest has found a way to fly between only major markets with smaller planes to add more frequency.
People always complain about the boarding process or the lack of first class or why don't they fly to mexico or hawaii.
WN is about profitably flying not just market share. Hence why they make money when the economy goes south or fuel goes up.
To the OP, who was the only airline that made money when fuel went through the roof in the earlier part of the decade?

(Answer WN)

Don't worry about them.

[Edited 2010-07-16 14:48:15 by srbmod]

User currently offlineCubsrule From United States of America, joined May 2004, 23014 posts, RR: 20
Reply 3, posted (4 years 2 months 6 days 4 hours ago) and read 10597 times:

Quoting GEG2RAP (Reply 7):
To the OP, who was the only airline that made money when fuel went through the roof in the earlier part of the decade?

As smart as I think hedging is - and to be clear, my comment isn't a criticism of WN - I don't know how much this point means going forward. I think everyone knows to hedge now.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinefrmrCapCadet From United States of America, joined May 2008, 1718 posts, RR: 1
Reply 4, posted (4 years 2 months 6 days 4 hours ago) and read 10541 times:

For at least 5-10 years after the legacies stop treating their customers as the enemy. Then we can see what WN will have to do to continue.


Buffet: the airline business...has eaten up capital...like..no other (business)
User currently offlineDfwRevolution From United States of America, joined Jan 2010, 977 posts, RR: 51
Reply 5, posted (4 years 2 months 6 days 4 hours ago) and read 10494 times:

Quoting Cubsrule (Reply 8):
As smart as I think hedging is - and to be clear, my comment isn't a criticism of WN - I don't know how much this point means going forward. I think everyone knows to hedge now.

Everyone knew to hedge before. All of the major airlines have held hedges in the past. It's not some financial mystery known only to Southwest.

What plagued the majors several years ago was their cash positions degraded to the point where they had to stop hedging significantly or sell the hedges they already had. Southwest took the gambit of extremely aggressive hedging about the same time, thanks in part because they did have ample cash reserves. Keep in mind that while hedging is a risk mitigation exercise in that you can "lock-in" fuel at a rate you know is operationally profitable, it can cost you if the market rate stays below the hedge rate. To an extent, this did happen to Southwest in 2008-2009; the hedges actually cost them some money. But in the end, the strategy was immensely positive for WN.


User currently offline2175301 From United States of America, joined May 2007, 1069 posts, RR: 0
Reply 6, posted (4 years 2 months 6 days 4 hours ago) and read 10480 times:

Quoting frmrCapCadet (Reply 9):
For at least 5-10 years after the legacies stop treating their customers as the enemy.

I believe that some passengers would be treated better under the Geneva Conventions if they were declared enemies. Enemies and POWs have rights. That is of course assuming that the Geneva Conventions could be applied to less than a formal declaration of war and to a subset of the population.


However, to answer the original question: Southwest will do very well for a long long time.


User currently offlineSCCutler From United States of America, joined Jan 2000, 5520 posts, RR: 28
Reply 7, posted (4 years 2 months 6 days 4 hours ago) and read 10470 times:

Answer:

As long as their essential policies of sound value (not "cheap," just fair), respect for customers, and mutual professional respect for each other (across all lines) are maintained, other carriers will be wondering, "how do we get us some a that?"



...three miles from BRONS, clear for the ILS one five approach...
User currently offlineCubsrule From United States of America, joined May 2004, 23014 posts, RR: 20
Reply 8, posted (4 years 2 months 6 days 4 hours ago) and read 10447 times:

Quoting DfwRevolution (Reply 10):
What plagued the majors several years ago was their cash positions degraded to the point where they had to stop hedging significantly or sell the hedges they already had.

I think that's an accurate explanation of what happened. But I think now that oil has been to $150/bbl once, everyone knows they need to find the cash, and I don't think we'll see such divergent hedging strategies again unless carrier's are REALLY cash poor. Certainly, AA has taken some relatively aggressive measures to improve its cash position lately.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinepar13del From Bahamas, joined Dec 2005, 7210 posts, RR: 8
Reply 9, posted (4 years 2 months 6 days 3 hours ago) and read 10351 times:

My response would be why do we want to speculate on when a successful airline will fail versus when failing airlines will be successful?
WN is profitable and most of the legacies are not, so how about more threads on when the legacies will realize that some things they are doing example running after market share is not working and attempt to emulate some of the things WN is doing?
Hedging as mentioned has been improved by all carriers, note that they are still regarded as airlines not oil companies, but thats another story  

But specifically to address the question, I would say that WN is going to continue doing what they are doing until other US airlines catch up and surpass them, then we will get a chance to see if they are really adaptable. So far some may argue that the legacy failings for example related to customer service makes it easy for them to be profitable. We see more written each day on the millions airlines are making with fees while they are still faulted for poor service, but WN's lack of fees get's while being profitable get's footnote mention, bummer.


User currently offlineGEG2RAP From United States of America, joined Sep 2003, 851 posts, RR: 0
Reply 10, posted (4 years 2 months 6 days 3 hours ago) and read 10277 times:

The largest threat to WN is if the 737 is deemed to be unsafe by the flying public.
God forbid it, but if the 737 were to be a couple high profile crashes, that could spell trouble quick for WN.


User currently offlineSCCutler From United States of America, joined Jan 2000, 5520 posts, RR: 28
Reply 11, posted (4 years 2 months 6 days 2 hours ago) and read 10159 times:

Quoting GEG2RAP (Reply 15):
The largest threat to WN is if the 737 is deemed to be unsafe by the flying public.
God forbid it, but if the 737 were to be a couple high profile crashes, that could spell trouble quick for WN.

Sure thing, there can be no question: a new and unproven design like the 737 is a risky place to be!



...three miles from BRONS, clear for the ILS one five approach...
User currently offlineMLD9S From , joined Dec 1969, posts, RR:
Reply 12, posted (4 years 2 months 6 days 2 hours ago) and read 10148 times:

Quoting GEG2RAP (Reply 15):
The largest threat to WN is if the 737 is deemed to be unsafe by the flying public.
God forbid it, but if the 737 were to be a couple high profile crashes, that could spell trouble quick for WN.

With all due respect, I don't believe that is true.

First of all, there have been a few accidents involving the 737 which, for a long time, were "unknown" in cause. The United 737-200 in Colorado Springs and the USAir 737-300 in Pittsburgh. Both, if I recall correctly, due to a rudder malfunction on the 737. The problem was identified and pilots have since been trained in what to do in case the same situation happens again.

Keep in mind, these were two accidents involving 737s that crashed with no known cause (for several years), However, those "unknown-cause" accidents did not seem to have an adverse effect on Southwest or any other 737-operating carrier.

Furthermore, there have been plenty of 737 accidents over the years for various reasons....without looking it up, I can think of the USAir 737 that collided with the SkyWest Metroliner in Los Angeles, the British Midland 737 that crashed due to the wrong engine being shut down after an engine fire, the USAir 737 that crashed into the water at LaGuardia after a botched aborted take-off.....combine those with the Colorado Springs and Pittsburgh accidents and you have many 737 accidents. Yet, public and airline confidence in the aircraft is still strong.

Times have changed since the great DC-10 scare of the 70s.

I think Southwest will be fine for the long term. They do what they do and they do it well. They offer a consistant product, with fair fares, good customer service and offer what they promise. They don't turn people off with extra fees, they (for the most part) treat their customers the way they themselves would want to be treated, and they don't promise things they can't deliver. That may sound corny....but I look at my un-airline-savvy parents. If they were going on vacation and booked on United or American or anyone else....they would come home and complain about the extra fees. They would vow to never fly that airline again and let their friends know. For all those people that say Southwest caters to the "kettles," I say: Good for them! Cuz you know what? Those Kettles will remember their experience and share it with friends and family.

Southwest is an airline that treats all of their passengers fairly.....you don't have to be a medallion platinum gold member and fly 100,000 miles a year to check your bags free, talk to a reservation agent in the United States (vs outsourced agents in India), get an aisle seat, buy your ticket at the airport, etc etc....and word gets around. For every "precious metal"-level elite at the majors, there are plenty of once-a-year travelers who don't want to be nickeled and dimed.

Word of mouth is valuable...and Southwest gets that from its passengers.

Everyone wants to claim Southwest is successful due to the fuel hedging...but there has to be more than that. Just my two cents.


User currently offlinePackcheer From United States of America, joined Nov 2008, 332 posts, RR: 0
Reply 13, posted (4 years 2 months 6 days 2 hours ago) and read 10085 times:

Quoting SCCutler (Reply 16):
Sure thing, there can be no question: a new and unproven design like the 737 is a risky place to be!

I believe what he was getting at is that WN is in a very secure place right now, and the biggest threat to them may not come from competition or "normal" airline issues, but from something out of the blue (irrational fear of the flying public that just doesn't know better)

Lets say there were (heaven forbid) 4 NG 737's among US Majors that have issues with large loss of life, be it weather, mechanical, bird strikes, etc. WN could do nothing about it, but with an all 737 fleet media coverage may hurt them in a situation like that.

No, I do not believe that is a likely situation... I'm just sayin..



Things that fly, Girls and Planes...
User currently offlineADent From United States of America, joined Dec 2006, 1385 posts, RR: 2
Reply 14, posted (4 years 2 months 5 days 23 hours ago) and read 9872 times:

Quoting frmrCapCadet (Reply 9):
For at least 5-10 years after the legacies stop treating their customers as the enemy. Then we can see what WN will have to do to continue.

Good answer. WN is starting to have high costs compared to some other LCC carriers, and starting to run some hubs, and running out of cheapy airports. Their business model is changing and maybe they will lose a few steps, or maybe keep it up.

But until the legacies stop hating their customers, WN has it made.


User currently offlineRyanairGuru From Australia, joined Oct 2006, 5579 posts, RR: 5
Reply 15, posted (4 years 2 months 5 days 21 hours ago) and read 9759 times:

A couple of 737 accidents isn't Southwest's biggest fear, but rather a couple of SOUTHWEST accidents. Don't forget that the vast majority of air travellers neither know nor care what type of plane they're on. If your average once-a-year vacationer heard about a 737 accident with, say, CO (absolutely nothing against Continental, their pilots, engineers or anyone else, they were simply the first 737 operator that popped to mind) they are likely to think *oh dear* and possibly that CO are unsafe; but are unlikely to put two and two together to get five and suddenly develop a phobia of Southwest because they fly 737s.

However if WN crashed several times, well... it'll be curtains. Remember Valujet

(ps how many people refused to get on a DC9 with another airline after that, to my mind none)

So long as they keep they're impeccable safety record (the best in the World) then I can't see WN going anywhere.

Don't forget that the legacies could quite easily do away with checked baggage fees, BOB etc. Serving a cup of coffee might cost, what, $2 per passenger? Adding charges was simply too easy a way to generate extra revenue when faced with bankruptcy. So long as WN aren't in such a predicament (which seems highly unlikely anytime soon) then such *perks* aren't going anywhere. One of my favourite airline quotes was by Franco Mancassola, formerly CEO of Debonair who said that serving a cup of coffee was never the difference between profit and loss. (that his airline went bust is a different matter!)

I haven't been to the US for a while, but keep thinking about it (hopefully next year) and every time I look at the cost of domestic flights I gawp: extra baggage fees are horrendous! I'm by no means a light-packer and having the luxury of two checked bags on the international flight and then having to pay eye-watering fees on the domestic legs (if not booked in conjunction with the international ticket) means that WN would always get my business for sure!



Worked Hard, Flew Right
User currently offlineEastAlt From United States of America, joined Aug 2009, 29 posts, RR: 0
Reply 16, posted (4 years 2 months 5 days 20 hours ago) and read 9685 times:

I disagree that US carriers treat thier customers badly. I think the decline in the legacy product has more to do with the behavoir of the flying public. The flying public wants the same price they get on Southwest with all the amenities of a full service carrier. In order to meet this US carriers have had to offer the same service Southwest offers. For example, Southwest does not serve food. When the legacy carriers ended food service the public was outraged

Another factor Southwest had going for it is they keep thier product simple. They do not use third party websites to distrbute thier product, they also do not offer advance seat assignment and thier frequent flyer program is very simple to understand. Further, the frequent flyer program does not have elite members everyone is treated the same.

I think the perception of great customer service is attributed to the fact they have less complexity and the expectation is lower. This is why they will be profitable. This concept also applies to Allegiant Air as well. They have defined thier product and we just accept them for who they are and we live with that concept. US legacy carriers have not done this.


User currently offlinepar13del From Bahamas, joined Dec 2005, 7210 posts, RR: 8
Reply 17, posted (4 years 2 months 5 days 17 hours ago) and read 9252 times:

Quoting EastAlt (Reply 21):
The flying public wants the same price they get on Southwest with all the amenities of a full service carrier

Question would be where they got those ideas from, certainely not from WN since they never claimed to be a full service carrier, maybe the legacies created false impressions / assumptions in the travelling public, they have certainely re-defined what Full Service means.

Quoting EastAlt (Reply 21):
Another factor Southwest had going for it is they keep thier product simple. They do not use third party websites to distrbute thier product, they also do not offer advance seat assignment and thier frequent flyer program is very simple to understand. Further, the frequent flyer program does not have elite members everyone is treated the same.

Those are all business decisions that legacies took for whatever reasons, they have chosen one economic model, WN another, maybe we should just let them be seperate and distinct, since the lagacies have been merging, do we need another by WN converting?
Just a thought 


User currently offlinedxer1974 From United States of America, joined Jul 2010, 33 posts, RR: 0
Reply 18, posted (4 years 2 months 5 days 16 hours ago) and read 8921 times:

Quoting MLD9S (Reply 17):
Southwest is an airline that treats all of their passengers fairly.....you don't have to be a medallion platinum gold member and fly 100,000 miles a year to check your bags free, talk to a reservation agent in the United States (vs outsourced agents in India), get an aisle seat, buy your ticket at the airport, etc etc....and word gets around. For every "precious metal"-level elite at the majors, there are plenty of once-a-year travelers who don't want to be nickeled and dimed.

And that 's why I fly WN if I cant go F on a legacy. With most legacies its like that old Southern Airways TV ad from the 1970's http://www.youtube.com/watch?v=5bTO2iJJjbU



"That's the thing about the 707, it can do everything but read it" Joe Patroni
User currently offlineMacsog6 From Singapore, joined Jan 2010, 531 posts, RR: 0
Reply 19, posted (4 years 2 months 5 days 15 hours ago) and read 8305 times:
Support Airliners.net - become a First Class Member!

Quoting RyanairGuru (Reply 20):
So long as they keep they're impeccable safety record (the best in the World)

I don't think so. WN has had a few hull losses and several carriers have had none. Do they have a outstanding safety record? Yes. Is it the best in the world? No.



Sixty Plus Years of Flying! "I fly because it releases my mind from the tyranny of petty things." - Saint Ex
User currently offlineAtrude777 From United States of America, joined Aug 2003, 5692 posts, RR: 52
Reply 20, posted (4 years 2 months 5 days 15 hours ago) and read 8431 times:

Quoting Macsog6 (Reply 24):

I don't think so. WN has had a few hull losses and several carriers have had none. Do they have a outstanding safety record? Yes. Is it the best in the world? No.

ONE Hull Loss...Burbank Incident. Not quite a "few".

Safety is recorded by loss of passengers on board a flight, for which Southwest has had none. They have had one ground death. Due to this WN's safety record is one of the top in the world, for an airline of it's size AND length of service, going 39 years.

Alex

[Edited 2010-07-16 07:51:31]


Good things come to those who wait, better things come to those who go AFTER it!
User currently offlineSWALoveField From United States of America, joined Jan 2005, 179 posts, RR: 0
Reply 21, posted (4 years 2 months 5 days 15 hours ago) and read 8347 times:

Quoting EastAlt (Reply 21):
he frequent flyer program does not have elite members everyone is treated the same.

My "A-List" card begs to differ.  

If you fly 32 segments within the calendar year, Rapid Rewards moves you to A-List Membership which assures you an A Boarding pass and at most WN airports you can go right to the front of the security line.

You can also fly enough (100 segments? someone correct me as I haven't had this since 2005) to get a Companion Pass membership which offers your companion a free flight anytime you fly-EVEN when you fly with a free ticket, your companion does too. It is also unlimited.

Robb
Dallas, TX


User currently offlineKPHXFlyer From United States of America, joined Mar 2008, 413 posts, RR: 1
Reply 22, posted (4 years 2 months 5 days 13 hours ago) and read 7503 times:

Quoting SWALoveField (Reply 26):

My "A-List" card begs to differ.

yeah, same here...gotta love the Fly-By Lane.

Near as I can figure, if you've been an A-lister for a while, you're more likely to get a lower number than a "new" A-lister so I think there is some priority given to loyal customers. I have no experience but mine to compare to but that's what it seems like to me.

Quoting SWALoveField (Reply 26):

You can also fly enough (100 segments? someone correct me as I haven't had this since 2005) to get a Companion Pass membership which offers your companion a free flight anytime you fly-EVEN when you fly with a free ticket, your companion does too. It is also unlimited.

Robb
Dallas, TX

I just recently got a companion pass and it is as great as described. You need 100 *credits* within a continuous 12 month period. Combine the number of flights you do plus a few business select tickets and with the Rapid Rewards VISA as your daily credit card, it's not at all difficult to get to 100 credits. The companion pass is $2.50 per flight and you have to fly with your companion  Smile . Unlimited usage of the companion pass for a year with little to no blackout dates.

[Edited 2010-07-16 09:33:54]

User currently offlineMacsog6 From Singapore, joined Jan 2010, 531 posts, RR: 0
Reply 23, posted (4 years 2 months 5 days 12 hours ago) and read 6819 times:
Support Airliners.net - become a First Class Member!

Quoting Atrude777 (Reply 25):
Due to this WN's safety record is one of the top in the world, for an airline of it's size AND length of service, going 39 years.

I agree with you Alex. WN is one of the best in the world and I am flying them on Sunday. Is it the "Best", meaning a singular carrier that ranks above every other carrier, in the world, I guess it is a matter of opinion, but I still think a carrier that has never lost a pax probably should rank higher.

And yes, they have only had one hull loss as N471WN that crashed at MDW, killing one person, was rebuilt, renumbered, and put back into service. N688SW that went in at BUR was written off. I stand corrected.



Sixty Plus Years of Flying! "I fly because it releases my mind from the tyranny of petty things." - Saint Ex
User currently offlineAtrude777 From United States of America, joined Aug 2003, 5692 posts, RR: 52
Reply 24, posted (4 years 2 months 5 days 12 hours ago) and read 6783 times:

Quoting Macsog6 (Reply 28):
I guess it is a matter of opinion, but I still think a carrier that has never lost a pax probably should rank higher.

But, Southwest HAS never lost a passenger on board their aircraft and that is the safety ranking they use. So once again WN's safety record is indeed top notch, using your own definition too.

Alex



Good things come to those who wait, better things come to those who go AFTER it!
25 MLD9S : That makes no sense. ValuJet had ONE accident and temporarily shut down before resuming operations and acquiring AirTran and the AirTran name. Yes, t
26 Macsog6 : OK, let's spilt a few hairs. The person killed at MDW was not killed as a passenger, but the parents of the six year old who was killed when their ve
27 Atrude777 : and I 100% agree with you on that, and please do not reflect on my history with WN. I was not with WN when this happened nor am I with WN actively no
28 SEPilot : I think a little perspective is in order. The reason that the DC-10 got a bad reputation is the (accurate) perception that it crashed because of desi
29 Post contains images United787 : Back to the topic at hand...I don't really think an accident or two, God forbid, would do much damage to WN at this point given their excellent safety
30 XT6Wagon : Costs are high, but they also have high productivity. So it works out quite well compared to other airlines with low to medium costs and low to mediu
31 AWACSooner : You forgot to mention the government bailouts... Everyone loves to bring up the EU/Airbus subsidizing...which I think is total crap...but these same
32 dlphoenix : They don't treat them as good as WN does. A WN employee is trained to understand that the customer pays his salary. He should do whatever he can to h
33 7673mech : In the end they will struggle with labor costs unless the start contracting out some of the work. Mid $20's/hr. for baggage handling in an unrealistic
34 cjpark : When the "My job is an entitlment" union syndrome sets in as it has at other airlines things will change for WN. 5 to 10 years we will see a complete
35 lemonkitty : N471WN is now N286WN....And the bird written off at BUR was N668SW.. LK
36 ridgid727 : IRemember when they did serve free hot food, from ovens on board and the public compalined how bad it was. Now they sell a dried out turkey wrap, and
37 Post contains images lightsaber : WN adapts while most of the lagacies do not. Yep. Seriously, how can this thread's title be taken seriously? We've heard the 'doom and gloom' on WN f
38 SEPilot : For a long time I did not fly WN as I shopped mostly on on-line travel sites, and WN did not participate. Then I got disappointed on a flight booked t
39 merlot : Yes, but the other legacies are chasing it and a main driving force of legacy self-evaluation is the absurdity of comparing yourself to other legacie
40 BD338 : I don't see any reason for WN to change any of their fundamentals in the near future: 1) A simple, streamlined, efficient product. One service class,
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