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WN, Denver, And Q1 Mkt Share Numbers  
User currently offlineTxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 42
Posted (4 years 1 month 2 weeks 2 days 20 hours ago) and read 8234 times:

Howdy all.

I am bending over backwards to avoid this becoming a WN-F9-UA bash each other thread although it may end up becoming that way before the day is over.

Since WN re-entered the Denver market I have looked at the DOT market share numbers as they are released. I have tried to be upfront about the fact that at one time I had a family member employed by Southwest Airlines Co although he has been retired for nearly 20 years. Nowadays I am just another revenue passenger who buys tickets and has to check in online to get the much coveted "A" boarding pass. Still, I am a fan of Southwest and I did worry quite a bit when they reentered the Denver market. I wasn't quite sure that they would be able to hold their own......much less prevail......against the mighty United with new improved LOW labor costs or the underdog, media darling, hometown airline with cute animals on the tails F9.

I am seeing some trends with the market share and fare statistics. Looking back to WN's first 13-flt-per-day schedule to 3 destinations and tracing it to today where Denver is a "big station" (not to be confused with a hub) the pattern goes like this: WN adds flights from Denver to an existing WN station. WN sets the prices attractively low. Low prices stimulate market and all airlines benefit to a degree although the average fare drops. WN adds service and picks up market share. WN raises the prices a bit but their market share remains stable. WN adds more capacity, cuts the price a bit (or offers more seats at the lower priced fare buckets), and gains some additional market share. Other carriers chop a flight here and there which allows WN to maintain their flight schedule but improve their yield a bit.

Now that the data is available, Q1 2010 looked like a period where WN lowered their fares (or allowed more cheap seats to be sold) in order to make some market share gains in some markets and consolidate gains in others.

What got me to thinking about all of this was the thread about WN's healthy Q2 profit....someone made a remark about how that quarters profit might answer the question as to whether or not WN was losing a ton of money in Denver.

Denver still has a lot of room for WN to grow by connecting dots. Some might scoff at the idea but one of the things WN really did covet out of the possible F9 purchase was Lynx. WN is very interested in the idea of being able to take the WN concept to smaller markets and when the Wright Amendment goes away in 2014 we might very well see WN experiment with their own feeder/commuter type operation to funnel traffic to Dallas (from the TX hinterlands) and to DEN (from the Rocky Mtn West & High Plains).

In the meantime, for everyone's perusal here are the 100 largest markets in/out of Denver in Q1 of 2010.

Source: http://ostpxweb.dot.gov/aviation/x-5...le_files/consumerairfarereport.htm

/city1 /city2 /distance /psgrs/day /avg fare /lgst carrier /mkt share /yield

DEN PHX 602 2938 $122 WN 46.3 20.3
CHI DEN 895 2410 $154 UA 35.9 17.2
DEN LAS 629 2351 $121 WN 48.0 19.2
DEN LAX 862 2340 $136 UA 34.7 15.8
DEN LGA 1626 2290 $221 UA 38.4 13.6
DAL DEN 650 1789 $170 AA 40.3 26.1
DEN HOU 883 1713 $158 CO 38.2 17.9
DEN SFO 967 1589 $152 UA 54.5 15.7
DEN IAD 1476 1458 $253 UA 44.1 17.1
DEN SAN 853 1426 $141 WN 46.7 16.5
DEN MCO 1545 1372 $182 UA 32.5 11.8
DEN MSP 680 1368 $129 DL 27.7 19.0
DEN SLC 391 1327 $99 WN 35.0 25.3
DEN SEA 1024 1199 $144 AS 29.0 14.0
ATL DEN 1199 1167 $189 DL 51.0 15.8
BOS DEN 1754 1160 $189 UA 36.5 10.8
DEN SNA 846 1087 $140 F9 34.4 16.5
DEN MCI 533 984 $115 WN 46.2 21.5
DEN PHL 1557 876 $198 WN 32.3 12.7
DEN STL 770 802 $137 WN 47.8 17.8
AUS DEN 775 797 $136 WN 45.1 17.6
DEN PDX 992 793 $144 F9 32.7 14.5
DEN FLL 1703 788 $192 F9 41.8 11.3
BWI DEN 1491 753 $202 WN 47.1 13.5
DEN SJC 948 750 $154 UA 45.1 16.2
DEN TPA 1506 725 $191 F9 29.0 12.7
DEN DTW 1123 680 $170 DL 28.8 15.2
DEN OMA 472 670 $100 UA 35.1 21.2
DEN TUS 639 616 $111 F9 35.0 17.4
DEN SAT 794 612 $139 WN 38.4 17.5
DEN SMF 910 611 $145 UA 33.0 15.9
DEN BNA 1013 599 $145 WN 49.7 14.3
DEN MKE 895 598 $124 F9 39.9 13.8
ABQ DEN 349 593 $98 WN 43.1 28.0
DEN IND 977 556 $141 F9 41.0 14.4
DEN MSY 1062 438 $195 UA 48.1 18.4
DEN OAK 957 397 $157 WN 77.2 16.4
DEN OKC 495 389 $132 UA 38.8 26.7
DEN RDU 1436 386 $175 WN 44.5 12.2
CLT DEN 1337 363 $231 US 51.4 17.3
DEN MIA 1709 351 $243 AA 44.4 14.2
DEN TUL 541 349 $127 WN 42.8 23.4
DEN ONT 819 336 $155 UA 49.6 18.9
DEN RSW 1606 309 $196 F9 30.5 12.2
DEN RNO 804 287 $159 WN 47.3 19.8
DEN PIT 1290 278 $218 UA 39.8 16.9
DEN GEG 836 249 $128 UA 33.9 15.3
DEN JAX 1447 248 $173 DL 35.1 12.0
BOI DEN 649 240 $143 UA 56.6 22.0
CLE DEN 1201 236 $207 CO 43.9 17.2
CMH DEN 1155 232 $208 UA 56.5 18.0
CVG DEN 1069 212 $196 DL 73.7 18.3
DEN BDL 1671 209 $200 WN 35.1 11.9
DEN PBI 1679 180 $181 DL 38.0 10.8
DAY DEN 1084 173 $180 F9 75.6 16.6
DEN ICT 419 146 $148 UA 71.3 35.4
DEN ELP 563 145 $179 UA 72.3 31.8
BIL DEN 455 136 $148 UA 70.1 32.5
CAK DEN 1224 134 $172 F9 79.1 14.0
BUR DEN 850 131 $182 UA 56.7 21.4
DEN SDF 1023 129 $183 UA 41.0 17.9
DEN DRO 251 129 $137 UA 65.7 54.5
BUF DEN 1359 122 $184 WN 33.5 13.6
DEN RIC 1482 117 $204 UA 29.2 13.7
DEN MEM 872 114 $287 UA 33.0 32.9
DEN FAR 627 112 $157 UA 53.5 25.0
DEN LIT 770 110 $236 UA 41.6 30.7
ASE DEN 125 109 $163 UA 68.4 130.1
BZN DEN 525 108 $171 UA 64.7 32.6
DEN ORF 1552 108 $195 UA 30.0 12.6
ALB DEN 1609 107 $223 UA 32.9 13.8
DEN PNS 1179 107 $158 DL 39.8 13.4
DEN DSM 589 103 $240 UA 91.5 40.7
BHM DEN 1082 102 $240 WN 39.6 22.2
DEN PSP 776 94 $264 UA 82.7 34.1
AMA DEN 358 85 $106 WN 99.5 29.7
DEN ROC 1413 84 $190 UA 42.7 13.5
DEN SYR 1492 84 $217 UA 49.1 14.6
CHS DEN 1449 81 $218 DL 43.3 15.0
DEN PVD 1737 76 $210 WN 32.3 12.1
DEN MHT 1728 73 $196 WN 51.0 11.4
DEN FSD 483 72 $204 UA 95.7 42.3
CID DEN 692 70 $232 UA 94.0 33.5
DEN RAP 301 70 $135 UA 72.8 45.0
BIS DEN 517 68 $233 UA 94.9 45.1
DEN FAT 844 68 $277 UA 70.9 32.8
DEN SAV 1413 65 $216 DL 55.9 15.3
BTV DEN 1639 65 $240 UA 52.0 14.7
DEN SBA 916 61 $269 UA 61.2 29.4
DEN GSO 1370 61 $192 DL 42.6 14.0
DEN JAN 966 60 $212 AA 30.3 22.0
DEN MSO 679 60 $235 UA 87.3 34.6
DEN HSV 1048 60 $309 UA 81.6 29.5
DEN GRR 1014 55 $263 UA 42.8 26.0
DEN MDT 1474 53 $202 UA 54.7 13.7
DEN MAF 563 53 $119 UA 55.3 21.1
DEN MSN 826 51 $306 UA 59.0 37.1
DEN JAC 406 49 $209 UA 88.3 51.6
DEN TYS 1162 46 $344 UA 51.6 29.6
DEN PSC 853 46 $244 UA 81.7 28.6


And here is the market share numbers for the largest 50 or so markets. Remember, this is O&D traffic (transfer and thru psgrs have been stripped out.



A couple of things I find intriguing: without a single nonstop in the market, WN has managed to carve out a decent if not huge slice of the DEN-DFW market. It will be interesting to see what happens when the Wright Amendment goes away and WN can do that nonstop. Also, despite the fact that the merging airline say it will never happen, things will change when United & Continental merge. UA brings hubs at ORD, DEN, IAD, and SFO while CO brings IAH, EWR, and CLE. First of all, neither the DEN or IAH hub are going anyplace. Still, there will be some rearrangement of capacity....some folks in Houston will be less than thrilled to see their beloved CO is no longer among the living, and we should expect to see some shifts in which routes are emphasized and which are not in the post-merger period. As the new UACO rearranges the furniture (not the deck chairs on the Titanic) some opportunities to grow certain markets and/or inaugurate service to some new ones might emerge.

133 replies: All unread, showing first 25:
 
User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6608 posts, RR: 24
Reply 1, posted (4 years 1 month 2 weeks 2 days 20 hours ago) and read 8120 times:

What I think is interesting is that this data actually validates UA's strategy in handling DEN. Instead of trying to fight it out for every passenger, UA simply went after their niche of business travelers and let F9/WN fight over the leisure traffic. UA is bringing in some pretty huge fare premiums in many markets and that doesn't even count any ancillary revenue.

Quoting TxAgKuwait (Thread starter):

Now that the data is available, Q1 2010 looked like a period where WN lowered their fares (or allowed more cheap seats to be sold) in order to make some market share gains in some markets and consolidate gains in others.

That's certainly the most positive way to look at it...though some may argue WN is just capacity dumping because some of these fares are atrociously low and would NEVER be tolerated on a systemwide basis. Granted it's the first quarter, so I won't fully judge.

Quoting TxAgKuwait (Thread starter):
As the new UACO rearranges the furniture (not the deck chairs on the Titanic) some opportunities to grow certain markets and/or inaugurate service to some new ones might emerge.

Maybe a few, but not much. We haven't seen WN do much in regards to the DL/NW merger and I don't expect much in CO/UA. The only market that might get interesting is CLE.


Thanks for putting this together. It is interesting to see how the fight plays out.


User currently offlinedrerx7 From United States of America, joined Jun 2000, 5190 posts, RR: 8
Reply 2, posted (4 years 1 month 2 weeks 2 days 19 hours ago) and read 7970 times:

I can see UA slipping to last place on the IAH-DEN run - they went from 2 daily 757s and a mixture of smaller birds to nearly all A319...that always are going out oversold. It will be nice to see heavies on the route after the merger is ok'd.


Third Coast born, means I'm Texas raised
User currently offlinemariner From New Zealand, joined Nov 2001, 25255 posts, RR: 85
Reply 3, posted (4 years 1 month 2 weeks 2 days 19 hours ago) and read 7966 times:
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Quoting TxAgKuwait (Thread starter):
I am bending over backwards to avoid this becoming a WN-F9-UA bash each other thread although it may end up becoming that way before the day is over.

I don't see why it should turn into a bash thread. The only controversial thing I see is this:

Quoting TxAgKuwait (Thread starter):
or the underdog, media darling, hometown airline with cute animals on the tails F9.

Underdog, sure, but when was Frontier ever the media darling?   

mariner



aeternum nauta
User currently offlineCubsrule From United States of America, joined May 2004, 23011 posts, RR: 20
Reply 4, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7821 times:

Quoting TxAgKuwait (Thread starter):
Looking back to WN's first 13-flt-per-day schedule to 3 destinations and tracing it to today where Denver is a "big station" (not to be confused with a hub) the pattern goes like this:

It is a hub as much as PHX/LAS/MDW/BWI are hubs. What's wrong with that?



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinepoint2point From United States of America, joined Mar 2010, 2758 posts, RR: 1
Reply 5, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7825 times:

Good thread with lots of relevant info about the situation in DEN. With both UA and WN reporting profits, and F9 with an operational profit, can this add to the fact that DEN can support hubs for 3 major airlines? The airport is designed to do just that, and DEN is always around 4th, 5th or 6th in the nation with O&D traffic, yet yields, although hardly near to top among major airports, are usually someplace just below the average.

Here is info for the top 25 O&D airports Q1 10 courtesy of Boyd Aviation Consulting. The average yield is 15.45¢.


airport .......O&D passengers....... yield
1 IAH ……. 2,644,362 ……. 19.60¢
2 DFW ……. 4,401,047 ……. 19.45¢
3 DCA ……. 2,814,970 ……. 19.41¢
4 ATL ……. 5,074,367 ……. 18.14¢
5 EWR ……. 3,679,231 ……. 18.04¢
6 MSP ……. 3,436,488 ……. 16.87¢
7 ORD ……. 5,389,993 ……. 16.76¢
8 DTW ……. 2,902,401 ……. 16.52¢
9 LGA ……. 4,188,461 ……. 16.46¢
10 SLC ……. 2,434,472 ……. 16.01¢
11 PHL ……. 3,409,454 ……. 15.92¢
12 BOS ……. 4,424,736 ……. 14.71¢
13 LAX ……. 6,566,681 ……. 14.46¢
14 PHX ……. 5,409,991 ……. 14.45¢
15 SFO ……. 4,714,422 ……. 14.15¢
16 JFK ……. 3,775,982 ……. 14.10¢
17 DEN ……. 5,403,569 ……. 13.95¢
18 BWI ……. 3,272,836 ……. 13.83¢
19 SAN ……. 3,406,565 ……. 13.80¢
20 TPA ……. 3,575,475 ……. 13.69¢
21 MDW ……. 2,396,964 ……. 13.68¢
22 SEA ……. 3,954,396 ……. 13.65¢
23 LAS ……. 6,867,564 ……. 12.95¢
24 FLL ……. 4,595,946 ……. 12.90¢
25 MCO ……. 6,770,378 ……. 12.85¢

DEN's yields at least pull their weight and then some with the carriers that hub there, at the same time allow for very convenient connection opportunities for a good part of the east/west national flow. Also, as simple economics go, there is some tendency to see lower O&D in airports with higher yields.

The Southwest effect has put DEN into the top ten airports worldwide in terms of passenger traffic, and fourth among aircraft movements.

Also to add, DEN really hubs for 4 airlines. Great Lake (ZK) has the bulk its operations in and out of DEN, and with their smaller planes they serve about a third of the geographical area of the country, and conveniently codeshare and connect with both UA and F9 at DEN.

It looks like an overall good situation at DEN for the airport, airlines, and passengers alike.

edit added - just to clarify, the average yield number of 15.45¢ is the average of the 25 airports that I have listed. I don't know what it is system wide for all of the 150 airports that Boyd listed.

[Edited 2010-08-03 19:51:57]

User currently offlineCubsrule From United States of America, joined May 2004, 23011 posts, RR: 20
Reply 6, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7778 times:

Quoting point2point (Reply 5):
can this add to the fact that DEN can support hubs for 3 major airlines?

What evidence is there that DEN can long term?



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinemariner From New Zealand, joined Nov 2001, 25255 posts, RR: 85
Reply 7, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7749 times:
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Quoting Cubsrule (Reply 6):
What evidence is there that DEN can long term?

Sorry, I don't understand what that means.

There may need to be adjustments, in destinations, frequency or capacity, as happened with United a year after Southwest came to town - and there may be changes in market share - but why can DEN not support three hubbed airlines?

mariner



aeternum nauta
User currently offlineCubsrule From United States of America, joined May 2004, 23011 posts, RR: 20
Reply 8, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7737 times:

Quoting mariner (Reply 7):
but why can DEN not support three hubbed airlines?

Are all three making money at DEN? If not, I don't know that DEN is really supporting all three.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinedrerx7 From United States of America, joined Jun 2000, 5190 posts, RR: 8
Reply 9, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7722 times:

Wow, IAH has the highest yields...


Third Coast born, means I'm Texas raised
User currently offlinepoint2point From United States of America, joined Mar 2010, 2758 posts, RR: 1
Reply 10, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7721 times:

Quoting Cubsrule (Reply 6):
What evidence is there that DEN can long term?


Anything long term is anyone's guess.

If the carriers there are making money in the NOW term, and find their ways to keep doing that, then going forward this develops into win/win for all involved.

Interestingly though, the carriers serving DEN that are losing $$$ this quarter are AA and BA, and I think that this has to do with a lot of their own internal situations, rather then serving DEN. I'm pretty sure that that at least BA considers DEN one of its profitable stations, if L/F is any indication (and I'm not saying that it is so...)


User currently offlinemariner From New Zealand, joined Nov 2001, 25255 posts, RR: 85
Reply 11, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7710 times:
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Quoting Cubsrule (Reply 8):
Are all three making money at DEN? If not, I don't know that DEN is really supporting all three.

I don't know. I don't know that either United or Southwest discuss the profits of individual hubs.

But I don't see that it matters. If DEN plays a crucial role in the system and the system is profitable, again, why shouldn't DEN support three hubbed airlines?

mariner



aeternum nauta
User currently offlineCubsrule From United States of America, joined May 2004, 23011 posts, RR: 20
Reply 12, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7697 times:

Quoting mariner (Reply 11):
If DEN plays a crucial role in the system and the system is profitable, again, why shouldn't DEN support three hubbed airlines?

I don't see DEN playing a crucial role for WN. Do you?



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinemariner From New Zealand, joined Nov 2001, 25255 posts, RR: 85
Reply 13, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7688 times:
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Quoting Cubsrule (Reply 12):
I don't see DEN playing a crucial role for WN. Do you?

It appears to be so to me. But - each to their own, always.

mariner



aeternum nauta
User currently offlineCubsrule From United States of America, joined May 2004, 23011 posts, RR: 20
Reply 14, posted (4 years 1 month 2 weeks 2 days 18 hours ago) and read 7671 times:

Quoting mariner (Reply 13):
It appears to be so to me.

Why?



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinemariner From New Zealand, joined Nov 2001, 25255 posts, RR: 85
Reply 15, posted (4 years 1 month 2 weeks 2 days 17 hours ago) and read 7644 times:
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Quoting Cubsrule (Reply 14):
Why?

Why are you dodging the issue?

Why can DEN not support three hubbed carriers? No one has defined how big the hubs have to be, or what the market share percentages will be.

United has changed its strategy 180 degrees at DEN, and, given it's recently announced profit, may be making money with a smaller market share.

mariner



aeternum nauta
User currently offlineCubsrule From United States of America, joined May 2004, 23011 posts, RR: 20
Reply 16, posted (4 years 1 month 2 weeks 2 days 17 hours ago) and read 7612 times:

Quoting mariner (Reply 15):
Why can DEN not support three hubbed carriers?

It's odd to me that DFW - more than 150 percent larger - cannot support two if DEN can support three.

To me, that begs the question of whether everyone is in fact making money at DEN. People assume yes, but I wonder whether all carriers are acting rationally. I think UA pretty clearly is - they appear to have successfully executed their strategy. F9 is almost as clear to me, if nothing else because BB ensured that they need DEN. But I can't figure out what WN's plan is besides "grow and see what happens."



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineOzarkD9S From United States of America, joined Oct 2001, 5111 posts, RR: 21
Reply 17, posted (4 years 1 month 2 weeks 2 days 17 hours ago) and read 7606 times:

Quoting Cubsrule (Reply 12):


I don't see DEN playing a crucial role for WN.
Quoting mariner (Reply 13):


It appears to be so to me. But - each to their own, always.

Depends on the definition of crucial. If DEN was taken out of the WN network tomorrow, LAS/PHX/SLC/MCI/STL/MDW are all positioned to absorb the transfer traffic for WN. In fact, pre-DEN those markets were doing just that. Having a network such as WN's with a plethora of "enhanced connecting opportunities" or whatever "NOT A HUB" euphemism they are calling their large stations these days means that probably no single airport is "crucial" for WN. Some more than others of course....



Next Up: STL-LGA-RIC-ATL-STL
User currently offlinemariner From New Zealand, joined Nov 2001, 25255 posts, RR: 85
Reply 18, posted (4 years 1 month 2 weeks 2 days 17 hours ago) and read 7568 times:
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Quoting Cubsrule (Reply 16):
To me, that begs the question of whether everyone is in fact making money at DEN. People assume yes, but I wonder whether all carriers are acting rationally.

I don't assume yes.

As I said, I'm not aware that United or Southwest usually discuss the profits of individual hubs, and absent that, I can't guess.

We know - because it was published - that after Southwest came to DEN United beefed up frequency and capacity on the common routes and we know - because it was published - that within a year DEN had changed from United's most profitable hub to its least profitable. The RMN (sadly now defunct) flat out said they were losing money.

We know - because we have watched it happen - that since then United has changed their strategy at DEN, they've cut back all that additional capacity and appear to be going for yield and may thus be profitable, although with lower market share.

But I think it is misleading to compare DEN to DFW, where the circumstances are quite different. Denver does not have two airport within spitting distance of each other. Dallas/Fort Worth - the metropolis - does support two hubbed airlines.

Of course, I understand that Southwest does not have "hubs" - LOL.

mariner



aeternum nauta
User currently offlineFutureUScapt From United States of America, joined Dec 2008, 765 posts, RR: 1
Reply 19, posted (4 years 1 month 2 weeks 2 days 17 hours ago) and read 7526 times:

Quoting Cubsrule (Reply 6):
Quoting point2point (Reply 5):
can this add to the fact that DEN can support hubs for 3 major airlines?

What evidence is there that DEN can long term?

Cubs, I would agree that it is premature, at best, to make such a statement at this point in time.


If you look at the 4Q09 numbers for the 25 largest O&Ds and compare them to the 1Q10 numbers, it looks like DEN was the only airport to see a decline in LOH-adjusted yield. To note, it was a slight decline but most of the top O&Ds increased anywhere from 5-15%. Now obviously, yields are only half the story; load factors are the other half. If DEN carriers can compensate for sluggish yield numbers with higher load factors, then the overall performance will turn out OK - and in fact, F9 may be doing just that, with a 91% LDF (systemwide) for the past 2 months. That said, I find their recently announced 2Q10 results for the branded operation unimpressive, but that is for a different thread.


User currently offlineTxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 42
Reply 20, posted (4 years 1 month 2 weeks 2 days 17 hours ago) and read 7480 times:

Quote:
Why?

I won't answer for Mariner but I'll give you my take on it.

What WN specializes in, and we can argue all day but most will concede that what they do better than anyone else is short to medium hauls......flights which range from an hour to just under three hours.

If you were to look at their pre-Denver route map there was a gapiing hole in the middle of the country that badly needed to be filled in.

There are a few (but very few) places in the United States that take more than 3 hrs flying time to get to from Denver.

Southwest seems to prefer its transcons as one stops. Focusing on short and medium haul traffic also allows them to keep their yield up there. For years Kelleher had kept his CASM remarkably low but he did it by increasing the average stage length and length of haul. Kelly appears to have stopped worrying about how shareholders view his CASM (don't misunderstand me, they still strive to keep it competitive, it is just not an all consuming desire) in order to play to the company's strengths.

Denver was in the right place. It has natural communities of interest with many of the cities where WN was already firmly entrenched. It is a wonderful place to stop if you are going with 1-stop transcons. There were lots of O&D passengers and the potential to stimulate some additional traffic.

It is the inter-community ties which, to me anyway, explains why WN has done so much so fast with Denver while not doing something similar with Detroit or Cleveland. As strange as it may seem, the southwestern (and midwestern to a lesser degree) United States is where Southwest is very strong. Dallas. Houston. Austin. Albuquerque. Phoenix. Las Vegas. Kansas City. Southern California. All of those cities are "up there" in any ranking of passenger markets to/from Denver.

I fly thru Denver about every 3rd week and folks talk about how WN wasn't doing so well there. That has not been my experience at all. Last week's trip I went AUS-DAL-TUL-DEN before running over to terminal A to catch Great Lakes to ISN. Every seat was filled. Why was I on a 2 stop out of Austin? By the time I booked every nonstop flight was either full or only had Business Select seats left. (yes, I am still cheap). It has been that way on every flight I catch and I do not always go at "prime time". I've gone to SAT when the AUS flights were full, I have gone DEN-AMA-DAL and DEN-OKC-DAL and DEN-PHX-AUS and DEN-ABQ-ELP-AUS in order to get home. I have yet to see anything I would consider a crummy load.

About the only other big vacant spot on Southwest's route map is Atlanta, and I don't see that getting repaired until there is a second airport there or WN buys Airtran. Dobbins would be perfect but that is a topic for another day. On the topic of Denver, what amazes me the most has been the rate of growth by WN there from no presence at all to being pretty significant in the big scheme of things there.


User currently offlinemariner From New Zealand, joined Nov 2001, 25255 posts, RR: 85
Reply 21, posted (4 years 1 month 2 weeks 2 days 17 hours ago) and read 7481 times:
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Quoting OzarkD9S (Reply 17):
Depends on the definition of crucial. If DEN was taken out of the WN network tomorrow, LAS/PHX/SLC/MCI/STL/MDW are all positioned to absorb the transfer traffic for WN.

Sure, that could happen. I doubt it is going to happen, but it could.

But Southwest now has 132 - 133? - daily flights ex-DEN and is a hub in all but Southwest classification. I believe DEN has ICO's - Intentional Connection Opportunities - for example, and has had for a while. I think that makes it fairly "crucial," simply not imperative.

Similarly, take DEN out of the United network and I imagine the airline would still survive. The exception, of course, is Frontier because it was a one-hub operation. In their case, DEN was an imperative.

mariner



aeternum nauta
User currently offlineSlcDeltaRUmd11 From United States of America, joined Jan 2004, 3462 posts, RR: 0
Reply 22, posted (4 years 1 month 2 weeks 2 days 16 hours ago) and read 7348 times:

I agree these are interesting numbers are show that WN is really doing more than just holding its own at DIA. I dont see WN reducing DEN anytime soon. They seem hell bent on making it work and when they are flying to BOS, BDL, and DTW they are really trying to make it a hub IMHO. WN has been able to penetrate even the fortress hubs pretty well from DIA.

WN sure spends alot on advertising in the DEN market ive heard multiple radio commercials, newspaper ads, and constant personalized denver tv commercials.

Some of the most interesting i found:

LAS southwest carried an amazing 101,540 and had a market share of 48% thats just impressive

PHL southwest is the routes largest carrier with 35 % of the passengers and 25,430 slightly beating US with their large Philly hub, UA and Frontier. With the huge amount of star alliance frequent flyers in the Philly metro to beat US and UA i think its pretty significant accomplishment over carriers who have so many decades of service on the route and should have FF loyalty

SLC southwest carried 41,860 and was able to get 35% marketshare AHEAD of DL who has a hub in SLC, F9 who have always done well on SLC-DEN since day 1 consistently, and UA. UA has really shrank itself in the market (15% of the market) and raised fares interesting strategy. UA used to offer ALOT of seats in this market it was even a shuttle by united route with 9 daily mainline departures in each direction


User currently offlinepoint2point From United States of America, joined Mar 2010, 2758 posts, RR: 1
Reply 23, posted (4 years 1 month 2 weeks 2 days 4 hours ago) and read 6998 times:

Quoting SlcDeltaRUmd11 (Reply 22):
WN has been able to penetrate even the fortress hubs pretty well from DIA.

Let's add to that AS was basically forced out of the DEN-PDX market with WN's persistence on that route, along with ferocious competition from F9 and UA as well. AS went I believe 3X daily to 2X to 1X to announcing they are discontinuing the route a few weeks ago. AS must consider PDX one of its major hubs, and had to retreat, but at the same time I guess AS found greener pastures for its metal....


User currently offlineEricR From United States of America, joined Jul 2010, 1904 posts, RR: 1
Reply 24, posted (4 years 1 month 2 weeks 2 days 4 hours ago) and read 6911 times:

It is absolutely AMAZING how quickly WN gained top market share on the PHX-DEN route. US, UA, and F9 were all on this route before WN entered. In a matter of a few years, WN went from 0% to 46% market share. From what I recall, WN started this route w/ 4 daily non-stops and have now increased it to 9 daily.

25 Cubsrule : But why choose a DEN hub over a SLC hub? Everything you've said in defense of DEN could also be said in defense of expansion at SLC. The Wasatch Fron
26 point2point : With some 200 plus passengers a day between DEN and JAX, you would think that someone between UA, WN or F9 would get a nonstop going on this route?
27 AirframeAS : Why is that odd? Keep in mind that one airport is vastly different than another airport regardless of size. If IAH or DFW cannot support 3 airlines b
28 EricR : The NW and UA ops in SEA were not as large as the WN and F9 ops in DEN.
29 mariner : You just switched again. You said: The metropolitan area does support two. It is easy enough to imagine Dallas Fort Worth supporting three, if any ai
30 JaxMan19 : A couple years ago we had F9, but it had a 6 am departure ( the earliest flight out of JAX i believe) which was terrible scheduling. Im not sure how
31 Post contains images AirframeAS : I disagree. NW pretty much had the South Satellite to themselves and UA had the North Satellite to themselves at that time. NW had a pretty big Asia
32 FlyPNS1 : I think that is the key point in regard to DFW, though with that said I still have doubts if DEN can keep 3 hubs going long term. Eventual increases
33 PlaneAdmirer : I did that as a red-eye once. Overnight out and 6 am ish in the morning back as noted above. Just horrible. Even if offered again, I wouldn't do it a
34 EricR : I am not questioning what you saw, but all I can tell you is that WN now has 129 daily departures out of DEN (as of May 23rd). F9 has more than this
35 AirframeAS : I am not questioning about now or how many flights UA and NW had 10 years ago, I don't care about that. They operated much, much bigger aircraft then
36 EricR : But you should care about the number of flights/size of the operations because that is the premise of your whole arguement - see your quote below. Yo
37 ScottB : They were already #2 at SLC, and SLC still is a smaller market than DEN. Even more to the point, United was a better target than Delta. IMO, Southwes
38 Airport : I don't think it's just the number of hubs that should be taken into account, but also the size of the hubs. I do think DEN can support 3 hubs, but th
39 Post contains images mariner : You and I have gone over this ground before - which is why I put the caveat. I know that someone would protest if I didn't put the caveat. Language i
40 FlyPNS1 : But they don't really have much of a network....just a bunch of tiny EAS markets that they have tied into DEN so they can flow those people onto UA/F
41 Post contains images mariner : When I first became aware of Frontier they had about a dozen aircraft and flew to less than twenty cities. They were still hubbed at DEN. And they we
42 EricR : Exactly. Just as FlyPNS1 stated, there becomes a point where a hub can only fill a certain number of seats. DFW could definately be a hub for more th
43 AirframeAS : Now you talk about size. You were talking about number of flights, but not size. Again, UA and NW utilized VLA's while WN and F9 currently does not.
44 airfrnt : It absolutely does. As people above have noted, DEN is, more or less, a hub for WN. By that I mean a hybrid location designed both for large numbers
45 ScottB : And WN was profitable with three aircraft and three cities back in the day... IMO the key for Frontier at the time you mention was having a different
46 Post contains images rampart : I've had that question, too. MCI did build a new airport, but 20 years too early. It was good for the time, but something else happened. In 20 years
47 EricR : I talked about flights to support my arguement that WN and F9 are much larger in DEN than NW and UA were ever in SEA.....which is true (though someho
48 Post contains images AirframeAS : You're missing my point, and we are getting off topic. My point was, UA and NW had hubs in SEA whether or not you like it. Hubs can mean anything, la
49 yellowtail : Flying a CO 753 on DEN-IAH on the 25th...I know not technically a heavy....but close enough capacity wise. Why would that surprise you...there is a r
50 airfrnt : It actually wasn't good at the time. TWA immediately sued them when they realized how difficult the airport was going to be. DFW has definitely under
51 TxAgKuwait : You have a valid point but the problem with WN at DFW was not really the cost of doing business there. The issue is they didn't want to go at all. Wh
52 Post contains images mariner : I thought we were talking about DEN. I don't understand your point, since none of the the three hubbed airlines at DEN has single digit market share.
53 F9Animal : As I have said before, WN is not all about the doom and gloom when entering someones back yard. Sometimes, it creates a healthy change for the statio
54 Cubsrule : I'm not switching. If we look just at population, it's odd whether we say DFW is a one hub town or a two hub town. That's precisely the point. But to
55 mariner : I don't see what is "odd" about it, but each to their own. mariner
56 Cubsrule : You have a significantly larger area that had three hubs - and one failed. Now, the comparison needs to be more nuanced than that (looking at locatio
57 FutureUScapt : Why is this so surprising when they were the ones with most ASMs in the market and an average fare that was 20-30% lower than the *A incumbents? And
58 mariner : I've already said why I think that is so. To elaborate - Southwest saw United in a weakened state and decided to spend the money and resources to do
59 Cubsrule : But your narrative of why you think it is so (which I agree with, by the way) doesn't really tell us anything about the long term viability of three
60 mariner : I've never claimed it did, I don't do the future. I don't have the enviable ability of some a.netters to know what is going to happen in the future.
61 ScottB : We always used to say that for a place in Texas to make it to "town" status, it had to have a Dairy Queen... It might or might not have been. What my
62 Cubsrule : WIth large stations at LAS and PHX, what makes DEN better-located for WN?
63 mariner : But I still don't understand because none of the three have single digit share at DEN, nor (no predictions - LOL) do I think it is likely to happen.
64 SlcDeltaRUmd11 : This is simple. SLC wasn't an option there is no gate space available to even increase much no less have the huge operation they are running at DIA.
65 EricR : Once the UA/CO merger is complete, it will be interesting to see how much traffic is moved from DEN to IAH. There are a lot of attractive benefits in
66 TxAgKuwait : If for no other reason, the sheer volume of O&D traffic available in Denver. More O&D means you can run more flights. WN thrives on frequency
67 drerx7 : I agree with your reasons; however, I don't see much moving from DEN to IAH. I think fat will be trimmed and you will see 757/767/777 on the IAH-DEN
68 point2point : I don't think WN has really too much of a choice here. With F9's considerable lower costs, they can match anything WN wants to do price wise, and com
69 SCCutler : Myth... ...Southwest's bread and butter is, and continues to be, the business traveler.
70 Post contains links BA : DEN has very high O&D traffic for its population size due to its relative geographic isolation which increases the propensity for air travel. This
71 Post contains links point2point : Just found an interesting read about UA and its situation in DEN. Maybe most of us know a lot of this already, but nonetheless... http://www.anna.aero
72 United1 : Thats not a myth at all...UAs strategy is to go after the higher yielding customers and leave the lower yielding ones to their competitors. They don'
73 point2point : I like the pic of the horse on p24. I'm wonder if those ominous clouds were photoshopped in, or did this eerie effect happen all by itself one day?
74 SlcDeltaRUmd11 : You can see mainline has decreased but skywest has increased quite a bit at DEN for UA As the article says it is pretty amazing that the only inter-co
75 rampart : My apologies, I was recalling a comparison I'd made on a previous thread. You are right. It was Denver vs Kansas City, which had similar populations
76 ScottB : Not all business travelers are "higher yielding." Many are required to book the lowest available fare matching the business need of their travel. Den
77 FlyPNS1 : I didn't mean to imply that WN doesn't want business travelers, but they don't attract the same type and volume of business passengers that the legac
78 Cubsrule : Didn't WN have seven gates at SLC as recently as six months to a year ago? ...which is a good reason. But in terms of location for serving connecting
79 AirframeAS : Well, from the old, old, old Frontier threads.....it was argued that WN thought (or still does think) of two reasons: 1) They needed DEN badly for th
80 mariner : I doubt anyone will know know "why DEN?" - because I think there is a lot more to it than meets the eye - but objectively it makes a lot of sense. DE
81 ADent : No they don't, but they are gathering a lot of business from the non-Premiers here in Denver (those that travel 2 to 10 times per year) that are tire
82 mcg : What percentage of WN's traffic at DEN is connecting traffic?
83 SlcDeltaRUmd11 : Yeah but southwest has something like 18 gates currently at DIA and they are gonna keep needing more for that size operation they seem to want and co
84 Cubsrule : How many vacant gates did DEN have when WN moved in?
85 SCCutler : Read carefully. Not challenging the notion that UAL seeks high-yield business travelers. Rather, pointing out that the oft-repeated notion that SWA i
86 ScottB : About a half dozen, but there was a clear path to expansion at DEN unlike at SLC. There was quite a bit of controversial-on-a.net talk about building
87 FlyPNS1 : WN was created for short-haul business travelers in certain select markets. However, WN is ill-suited to attract customers on longer flights, those w
88 airfrnt : The issue isn't support, the issue is profit. A "good" hub implies some pricing control. With three carriers, there is little pricing control, and a
89 Post contains links mariner : As in Frontier and the C gates - no wonder Sean Menke was so bitter about DIA management. That ol' numbers wallah, Mike Boyd, has come up with a coup
90 SlcDeltaRUmd11 : The real advantage is how much of a better location DEN is than PHX for everything but the SO Cal/LAS market basically. DEN can route passengers MDW-
91 point2point : I think that the new UA/CO will remain in DEN, and maybe even grow a bit, (but not go crazy) and do battle, but not in a traditional way. Rather than
92 cjpark : We have two hubbed carriers in DFW. They are just at different airports. Southwest according to its own reasoning cannot compete in Dallas without sp
93 SCCutler : Sheesh. Even given the specious premise, not even comparable. Stapleton was virtually all air-carrier ops, something which one could never have said
94 TxAgKuwait : Spike: Give me a call. You still driving the v tailed doctor killer? CJ: Nothing has kept American, Braniff, Texas Intl, et al from operating at Love
95 cjpark : Because there is no way you can say with a straight face that Southwest staying at Love Field was not for its own convenience.
96 EricR : You seem to be forgetting about all of the south originating traffic (ABQ, Texas, LA, MS, AL,FL, etc.). Traffic originating from these southern locat
97 Cubsrule : For me, the question isn't so much DEN versus PHX - as you point out, they serve distinct connecting flows. It's DEN versus a place like SLC.
98 SCCutler : You are absolutely correct. As it works out, it served the interests of the flying public pretty well, too, but I'll acknowledge that there was no wa
99 mariner : I assume you;d agree that it is perfectly logical for Southwest to be at DEN to some degree - a dozen flights, two dozen - it was the largest western
100 Cubsrule : Absolutely - and I'd go furrther than your dozen or two flights. If it were up to, say the size of PHL or even a bit bigger, I wouldn't say much. It
101 Post contains images point2point : A couple of points of interest that I found Graph courtesy San Jose Airport and Innovata DEN is the ONLY major airport in the U.S. to have a scheduled
102 n7371f : Absolutely not. Denver's cost per passenger is a pre-described calculation set by the city. Southwest doesn't deserve any credit for the lowering of
103 point2point : But.... as an airport’s CPE is calculated first by getting all the airport’s total expenses, subtracting all of the non airline revenue, and then
104 TxAgKuwait : I can tell you EXACTLY why WN left Denver the first time. They had no gate space. It was subleased from Ozark. Ozark had WN over a barrel and was tak
105 Post contains images mariner : I remember that one stated reason Southwest went (back?) to DEN was because airport costs had dropped? mariner
106 point2point : They did. The CPE did go down from a start $16.85 at the end of 1995 (first year of operations) to $13.01 at the end of 2004, just before WN started
107 ScottB : They do, in that a large chunk of the airport's cost (debt service, airfield maintenance, etc.) are fixed whether the airport serves one passenger a
108 mariner : I don't think I claimed that it was - and I don't see how my statement implies that it was. But CEO Kelly did say that Southwest changed the model wi
109 airfrnt : As time has gone on, costs have gone down both because of greater traffic (mostly thanks to F9 originally, then WN), and because of decreasing costs
110 TxAgKuwait : You can rank it anywhere you wish, and there is no law saying you have to take my word for it. I was there. I have (amd had) first hand knowledge of
111 cjpark : Just think SC. How much more WN could have served the interest of the flying public by actually moving to an airport they could compete from. The onl
112 Cubsrule : You keep making this point, and I still don't understand. WN can compete from DAL and, apparently, is happy with their results there. Why would they
113 WNCrew : Right?!? Geesh... clearly we made the right decision at the time and it just so happens to have paid off in it's own round-a-bout way. Besides, some
114 SCCutler : There are those who contend that, had they moved to DFW, then-fledgling Southwest could never have survived the brutal competition from Braniff, Delt
115 thefuture : Does all this mean, that there's enormous growth potential for likes of Allegiant into alternative airprots close to DEN ? DEN is a big airport &
116 cjpark : DAL not DFW. Remember we had to rebuild that airport as a monument to Herbs ego as part of WAII. Latest estimates of the total cost of the project is
117 ADent : And Allegiant is starting service to Pueblo. I don't think any of the other Denver metro airports handle scheduled service, but one can ponder: I wou
118 Post contains images ScottB : Yes, I'm absolutely certain that Southwest insisted on a new terminal at DAL knowing that they'd be on the hook for 90% of the costs. More likely AA
119 airfrnt : Your view doesn't square with reported comments from WN themselves, Kelleher's infamous pig comment ("We won't return until someone else does ground?
120 thefuture : We keep hearing here in Australia, how bad the economy is in the U.S. So, see this as one reason why G4 is doing so well. Surely the Southwest effect
121 MLD9S : More specifically, the Southwest Effect is that when Southwest enters a market, it stimulates the market. People who would normally drive or not trav
122 TxAgKuwait : Ever read the book "Nuts" about Kelleher's Southwest Airlines? Its truth quotient was about 10% Herb inherited a gold mine from his predecessors and
123 point2point : Fort Collins to DEN is about 70 or so miles, so maybe about an hour drive, give or take Colorado Springs is approximately 85 miles from DEN (give or
124 SlcDeltaRUmd11 : Also there alot of people who live in Southern Denver suburbs who are closer to COS and Northern Denver suburbs who are closer to Ft Collins. Add in
125 sccutler : It ain't a "boondoggle" if it pays off, and the payoff appears to be golden for Dallas. Time will tell.
126 Post contains links point2point : Speak of the devil, G4 is starting twice weekly Fort Collins-Phoenix Mesa service beginning 10/08 http://atwonline.com/airports-routes/news/airline-r
127 ADent : ANY service. Somebody started up turboprop service and the airport owner (Arapahoe county) sued. Lawsuits worked through the courts, but the FAA pull
128 airfrnt : That was Westpac's model. It didn't work, and they nose dived. They tried to move to DEN out of desperation - and also tried a merger with the new F9
129 ScottB : The issue, I think, is that there were two different pullouts from DEN. The first happened in 1986, when Southwest ended its original foray into the
130 Post contains links mariner : And in good time, Mike Boyd has a few things to say, especially on the matter of Southwest and hubs: http://www.aviationplanning.com/HotFlash.htm Sout
131 thefuture : Yes but they tried to take on the big boys. G4 doesn't make much out of actual flights, but rather the extras & car hire, acommodation etc. No bu
132 PlaneAdmirer : And, I, for one, am grateful. When we moved here 11 years ago before three children, Denver was very expensive to fly to and from.
133 point2point : Somehow, I think that those who envisioned and planned DIA, had just this exactly in mind. And I even think that today's managers are following in th
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