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Southwest & Denver: Was The Build Up A Good Move?  
User currently offlineseatback From United States of America, joined Mar 2002, 767 posts, RR: 0
Posted (3 years 3 weeks 1 day 11 hours ago) and read 9431 times:

Years after Southwest re-entered the Denver market, do you think it was a good move financially to build such a large base? Are they making money in DEN? Would they have been better off making DEN a large spoke city to PHX, LAX, MDW, LAS and BWI?

Denver isn't large enough for three airlines and the other two seem to be committed to the fight.

66 replies: All unread, showing first 25:
 
User currently offlineDeltaMD90 From United States of America, joined Apr 2008, 7914 posts, RR: 51
Reply 1, posted (3 years 3 weeks 1 day 10 hours ago) and read 9385 times:

Quoting seatback (Thread starter):
Denver isn't large enough for three airlines and the other two seem to be committed to the fight.

I thought UA pulled back just a bit and Frontier is getting clobbered? In fact, I hear time and time again about WN's DEN strategy as an aggressive and successful strategy. I could be wrong...



Ironically I have never flown a Delta MD-90 :)
User currently offlineseatback From United States of America, joined Mar 2002, 767 posts, RR: 0
Reply 2, posted (3 years 3 weeks 1 day 10 hours ago) and read 9353 times:

I think they're successful in regards to trafic, but I'm not so sure financially. Frontier, from what I recall has very high load factors out of Denver, but they're not making any money there.

User currently offlinesplitterz From United States of America, joined Apr 2011, 204 posts, RR: 0
Reply 3, posted (3 years 3 weeks 1 day 9 hours ago) and read 9203 times:

I am willing to bet that WN is loosing a boat load of money only because they can weather the storm longer than the other two carriers, mainly F9.

User currently offlineF9Animal From United States of America, joined Dec 2004, 5055 posts, RR: 28
Reply 4, posted (3 years 3 weeks 1 day 9 hours ago) and read 9167 times:

Quoting seatback (Thread starter):
Are they making money in DEN?

No, they are losing their tails in DEN.

Quoting splitterz (Reply 3):
I am willing to bet that WN is loosing a boat load of money only because they can weather the storm longer than the other two carriers, mainly F9.

F9 is not going anywhere. Nor are they going under. F9 is turning around, and showing some excellent signs of recovery. The airline has faced some major challenges, and WN is nothing. F9 survived constant assault since it's very beginnings from UA.

WN has had years of success. However, the tide is starting to change. WN has shown signs of soft profits lately.



I Am A Different Animal!!
User currently offlinen471wn From United States of America, joined Dec 2003, 1541 posts, RR: 2
Reply 5, posted (3 years 3 weeks 1 day 8 hours ago) and read 8957 times:
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Quoting F9Animal (Reply 4):
and WN is nothing

You musrt be joking to make such a comment----I guess you have not been in Terminal C lately and seen the mobs of people.....


User currently offlineDrerx7 From United States of America, joined Jun 2000, 5192 posts, RR: 8
Reply 6, posted (3 years 3 weeks 1 day 8 hours ago) and read 8933 times:

Quoting F9Animal (Reply 4):
The airline has faced some major challenges, and WN is nothing.

I like both airlines...but a statement like that is delusional. I was absolutely shocked at how much WN has TAKEN over DEN when I flew through there in June...prior to that I had been through there 6-7 months before and they weren't as massive.



Third Coast born, means I'm Texas raised
User currently offlineAWACSooner From United States of America, joined Jan 2008, 1915 posts, RR: 1
Reply 7, posted (3 years 3 weeks 1 day ago) and read 8632 times:

Threads like these are nothing short of bait for the WN bashers.

Yes, WN's entry into DEN can be labeled a success. No, they may not be making money hand over fist, but they're capturing load factors on the routes they've opened...mostly at the expense of UA, but F9 is also seeing dents as well (check the figures, F9 has reduced service or even discontinued service to a few cities that they and WN compete on from DEN). The game is WN's to lose (good lord people, use spell check...it's L-O-S-E).


User currently offlineOzarkD9S From United States of America, joined Oct 2001, 5111 posts, RR: 21
Reply 8, posted (3 years 3 weeks 1 day ago) and read 8630 times:

Don't know if you want to read much into this but when I booked an upcoming STL-LAS flight on WN, the cheapest options were thru DEN, either direct or connecting. WN seems to be forcing traffic thru DEN to fill seats. Just an observation.


Next Up: STL-LGA-RIC-ATL-STL
User currently offlinesplitterz From United States of America, joined Apr 2011, 204 posts, RR: 0
Reply 9, posted (3 years 3 weeks 1 day ago) and read 8625 times:

Quoting F9Animal (Reply 4):
F9 is not going anywhere. Nor are they going under. F9 is turning around, and showing some excellent signs of recovery. The airline has faced some major challenges, and WN is nothing. F9 survived constant assault since it's very beginnings from UA.

I was just mentioning the fact that WN has a mucher deeper pocket and can sustain constant loses unlike F9.


User currently offlineWNCrew From United States of America, joined Jun 2006, 1473 posts, RR: 10
Reply 10, posted (3 years 3 weeks 1 day ago) and read 8602 times:

I haven't seen anyone post proof, or anecdotal evidence that WN is loosing money in DEN, but a lot of people sure like to say "I doubt.... I dont think...They're probably not.." How can you tell if WN is or isn't making money in DEN?

As for WN vs F9 vs UA, why do people have to get to snappy? This is business... it's not personal, the attacks make people look like primary school children.



ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 564 posts, RR: 0
Reply 11, posted (3 years 3 weeks 20 hours ago) and read 8355 times:

Quoting WNCrew (Reply 10):
This is business... it's not personal

You do realize when Hyman Roth & Michael Coreleone used that line it was in reference to someone either of them gave the order to kill.


User currently offlineflashmeister From United States of America, joined Apr 2000, 2900 posts, RR: 6
Reply 12, posted (3 years 3 weeks 19 hours ago) and read 8238 times:
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Quoting WNCrew (Reply 10):

I haven't seen anyone post proof, or anecdotal evidence that WN is loosing money in DEN, but a lot of people sure like to say "I doubt.... I dont think...They're probably not.." How can you tell if WN is or isn't making money in DEN?

OK, here's some...

In 2009, it was well known that WN was losing $38 million per quarter just in DEN. That's more than $400k per day.See article.

There's also some anecdotal reports from analysts as recently as April 2011 that WN continues to lose money in Denver, despite becoming #2 in the market. See article.

For more, look at the comments of Michael Boyd and others in the consulting biz. And, of course, it's quite notable that there are few if any analysts trumpeting the profitability of DEN for WN: the conventional wisdom is break-even or worse.


User currently offlinesplitterz From United States of America, joined Apr 2011, 204 posts, RR: 0
Reply 13, posted (3 years 3 weeks 19 hours ago) and read 8227 times:

Quoting flashmeister (Reply 12):

OK, here's some...

In 2009, it was well known that WN was losing $38 million per quarter just in DEN. That's more than $400k per day.See article.

There's also some anecdotal reports from analysts as recently as April 2011 that WN continues to lose money in Denver, despite becoming #2 in the market. See article.

For more, look at the comments of Michael Boyd and others in the consulting biz. And, of course, it's quite notable that there are few if any analysts trumpeting the profitability of DEN for WN: the conventional wisdom is break-even or worse.

Exactly. Thank you for the articles. And this goes directly back to WN being able to ride out financial loses more than F9.


User currently offlineAWACSooner From United States of America, joined Jan 2008, 1915 posts, RR: 1
Reply 14, posted (3 years 3 weeks 19 hours ago) and read 8169 times:

Quoting flashmeister (Reply 12):
In 2009, it was well known that WN was losing $38 million per quarter just in DEN.

That was 2009...

Quoting flashmeister (Reply 12):
There's also some anecdotal reports from analysts as recently as April 2011

Keyword: ANECDOTAL


User currently offlineredflyer From United States of America, joined Feb 2005, 4329 posts, RR: 28
Reply 15, posted (3 years 3 weeks 19 hours ago) and read 8124 times:

Quoting F9Animal (Reply 4):
The airline has faced some major challenges, and WN is nothing. F9 survived constant assault since it's very beginnings from UA.

Does filing bankruptcy constitute surviving an assault? Or is that a legitimate tactic used to defend against assaults?



My other home is a Piper Cherokee 180C
User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4506 posts, RR: 33
Reply 16, posted (3 years 3 weeks 19 hours ago) and read 8106 times:

Quoting flashmeister (Reply 12):
There's also some anecdotal reports from analysts as recently as April 2011 that WN continues to lose money in Denver, despite becoming #2 in the market. See article.

Fair use quote from Denver Post 4/27/11 article:

Insiders have speculated that Southwest was losing money as it gained customers in Denver. Shelswell-White said Southwest doesn't talk about individual city profitability, adding, however, "We wouldn't continue to grow in the market if it weren't working for us

"Speculation" is hardly conclusive. I'd bet Southwest is at least breaking even in DEN. Our threads in 2011 have had a lot of citation of WN getting good yields a lot of places.

I'd also bet DEN can support three carriers, even at today's oil prices. It's a large, remote city. What will likely change is the distribution of market share, and overall seat capacity may moderately decline, as market share shakes out.

My prediction: Frontier stays about where they are. WN grows moderately. UA swaps out more mainline a/c for regional a/c, but doesn't cut many destinations. Incremental decline in seat capacity in Denver will likely come from UA, whose new CO management has other fish to fry.

Jim



Need a new airline paint scheme? Better call Saul! (Bass that is)
User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 564 posts, RR: 0
Reply 17, posted (3 years 3 weeks 18 hours ago) and read 8085 times:

Quoting redflyer (Reply 15):
Does filing bankruptcy constitute surviving an assault? Or is that a legitimate tactic used to defend against assaults?

Besides AA and WN, hasn't every major carrier filed in order to keep flying? And it is arguable that AA should have filed. The idea that F9 should be the one to liquidate when US, NW, DL didn't doesn't quite fly.


User currently offlineredflyer From United States of America, joined Feb 2005, 4329 posts, RR: 28
Reply 18, posted (3 years 3 weeks 18 hours ago) and read 8004 times:

Quoting PlaneAdmirer (Reply 17):
Quoting redflyer (Reply 15):
Does filing bankruptcy constitute surviving an assault? Or is that a legitimate tactic used to defend against assaults?

Besides AA and WN, hasn't every major carrier filed in order to keep flying? And it is arguable that AA should have filed. The idea that F9 should be the one to liquidate when US, NW, DL didn't doesn't quite fly.

Just goes to show that with the exception of AA and WN, but certainly WN, none of the other carriers survived an "assault".



My other home is a Piper Cherokee 180C
User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 564 posts, RR: 0
Reply 19, posted (3 years 3 weeks 18 hours ago) and read 7979 times:

Quoting redflyer (Reply 18):
none of the other carriers survived an "assault".

Those are still flying so IMHO they survived. What didn't survive were the labor contracts, pre-bankruptcy equity holders, and a fair amount of pre-bankruptcy debt and other obligations. That's not to say a lot of carriers didn't liquidate over the years, becaues they have, but so far F9 is still at it.


User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17511 posts, RR: 45
Reply 20, posted (3 years 3 weeks 18 hours ago) and read 7972 times:

Quoting AWACSooner (Reply 7):
WN's entry into DEN can be labeled a success

Without knowing what their goal was it's tough to say. If it was to push F9 out, then it's so far been a failure. If it's to lose lots of money on a large hub operation, I'd say it's a success.

Quoting AWACSooner (Reply 7):
No, they may not be making money hand over fist

If they're breaking even it's a miracle.

Quoting WNCrew (Reply 10):
How can you tell if WN is or isn't making money in DEN?

WN generally has the same to slightly higher yields and LF as F9, and F9 is losing lots of money, on lower costs.



E pur si muove -Galileo
User currently offlinen471wn From United States of America, joined Dec 2003, 1541 posts, RR: 2
Reply 21, posted (3 years 3 weeks 17 hours ago) and read 7799 times:
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Quoting flashmeister (Reply 12):
For more, look at the comments of Michael Boyd

Long an individual who did not like LCC's and especially WN


User currently offlinewnflyguy From United Kingdom, joined Feb 2011, 545 posts, RR: 0
Reply 22, posted (3 years 3 weeks 16 hours ago) and read 7742 times:

WN is above the break even point and making a small profit in DEN.
DEN adds a lot of value to the WN net work as a whole. It helps relives presser from other WN cities by moving connecting passengers thru DEN frees up some high dollar O&D some where else in the WN system which adds to WN over all bottom line..enjoy wnfg



my post are my opinion only and not those of southwest airlines and or airtran airlines.
User currently offlinemariner From New Zealand, joined Nov 2001, 25281 posts, RR: 85
Reply 23, posted (3 years 3 weeks 16 hours ago) and read 7692 times:
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Quoting redflyer (Reply 15):
Does filing bankruptcy constitute surviving an assault? Or is that a legitimate tactic used to defend against assaults?

It doesn't really matter, does it? An airline called Frontier is still flying at DEN.

If it was the intention to remove the airline called Frontier from the face of the earth, Southwest had that opportunity at the auction and failed.

Quoting DCA-ROCguy (Reply 16):
My prediction: Frontier stays about where they are. WN grows moderately. UA swaps out more mainline a/c for regional a/c, but doesn't cut many destinations.

For the near future, I think that's probably right.

mariner



aeternum nauta
User currently offlineredflyer From United States of America, joined Feb 2005, 4329 posts, RR: 28
Reply 24, posted (3 years 3 weeks 16 hours ago) and read 7654 times:

Quoting mariner (Reply 23):
Quoting redflyer (Reply 15):
Does filing bankruptcy constitute surviving an assault? Or is that a legitimate tactic used to defend against assaults?

It doesn't really matter, does it? An airline called Frontier is still flying at DEN.

Of course it doesn't matter. Frontier had one profitable quarter out of, what, 12 before WN came to DEN? And then they filed BK within a couple of years of WN entering the DEN market, but according to the poster that I originally quoted, they have "defended against the assaults". So admirable.

Nope, it doesn't matter. This thread is about WN. So let's talk about how they are failing miserably in DEN and bleeding red.



My other home is a Piper Cherokee 180C
25 mariner : I assume that's sarcasm (?) because I don't think Southwest is "failing miserably and bleeding red" at DEN. I don't know how profitable the operation
26 n471wn : thank you for this thoughful response----these threads about WN seem to always bring out comments which simply are not accurate---the point being tha
27 AADC10 : WN is probably not making money at DEN but there is an opportunity while F9 is limping and UA is moving resources to maintain the fortress hub at IAH.
28 txagkuwait : Forget the analysts. If you are not privy to WN's books, then neither they nor you have any way of knowing whether or not WN is making money in Denver
29 F9Animal : I understand what you are saying, but I am stating that F9 is recovering quite well. F9 losses will turn to profits soon. I see mobs of people, but h
30 Drerx7 : I agree...but in a scenario like that F9 would be a casualty of war. UA can make more money reallocating resources to the coast and down to IAH. They
31 point2point : At this point, WN has (or will soon have with MHT and PVD) more n/s destinations out of DEN (51) than all of their other stations except for MDW (56)
32 txagkuwait : How? Please tell me how Wn could get "spanked" by UA? Would it be like WN getting "spanked" by "Shuttle by United" in California? People think about
33 Post contains links F9Fan : Uh, UA is actually cutting year over year capacity at DEN by 11% to 17% this fall, more than any other hub in the UA or CO system (see http://www.cle
34 cubsrule : Really? WN's Y product isn't bad, but, as you concede, WN doesn't have Y+. WN doesn't have IFE. While neither is exactly serving gourmet food, UA has
35 F9Animal : UA has the aircraft and funds to put WN and F9 in a world of hurt in DEN. If UA wanted to spank WN and F9, they could. UA could easily add 10 times t
36 LAXintl : Boyd Group had a small analysis out with data on traffic and revenues at DEN as of the end of 2010. Carrier - Average Daily Enplanements - Market Shar
37 atrude777 : While not daily, WN does fly DEN-LGA on Saturday only. Alex
38 slcdeltarumd11 : Seems like a very likely scenario and the one i think is the most likely to happen. Frontier however is far from "safe" long term however. Frontier h
39 swa4life : I'm not going to pretend to be some sort of financial guru, but as a Southwest employee I can tell you that DEN is playing an integral role in our rou
40 cubsrule : Assuming that what you have said is so, why is it a good idea for WN - which has always made money focusing on local passengers - to lean on connecti
41 slcdeltarumd11 : but united outright refueses to fly to any of the cities from DEN! They wont even fly to LHR, CDG, NRT which is a hub, or MEX! They fight against WN
42 LAXintl : They tried it for several years -- flight did great with Y class, but terrible in the critical premium cabins. They do. Seasonally almost every year.
43 klwright69 : Exactly. I think a UA DEN-LHR nonstop would make sense for a 2 class aircraft, flown on a seasonal basis. I have flown DEN-LHR on BA. I also worked f
44 JaxMan19 : I just dont understand why SW would build up another "hub" in DEN with PHX and LAS being so close, i feel like it is an overkill to say the least.. no
45 Delta2ual : I was thinking the same thing. If WN is truly "hubbing" like everyone else is, why the need for 3 large hubs so close together? Of course, after the
46 dfwrevolution : 1. Because they are the largest domestic carrier and only getting bigger. 2. DEN is also closer to the geographic center of the country than LAS or P
47 XT6Wagon : Close? er... Not so much. As others have said DEN is far better for connecting the east and the west parts of the route map than just about anywhere.
48 ADent : IFE - UA has you there if you want to watch reruns of The Office on the overhead screen. UA does offer CH 9, but that is spotty. Food - WN offers foo
49 JaxMan19 : So then they should choose to keep 2 of those"hubs" i.e DEN, PHX or DEN LAS
50 jfklganyc : "F9 is not going anywhere. Nor are they going under. F9 is turning around, and showing some excellent signs of recovery. The airline has faced some ma
51 cubsrule : I think the point was about the onboard product, but I may be misinterpreting. I'd agree that WN is generally a better value, but I can't say that th
52 WNCrew : I can't seem to find it, either on our website, or on the crew tracking system... and I've never worked it. I know F9 was doing this at one point I b
53 cubsrule : It ran last summer. Flight numbers were 1559 westbound and 1939 eastbound.
54 Post contains links and images atrude777 : http://www.airlinesanddestinations.c...ore-rounds-of-expansion-at-denver/ Southwest Airlines also will add seven additional daily flights to existing
55 point2point : For a very brief time (can't recall exactly when though) WN did fly a n/s DEN-LGA on Saturdays. I don't think that it does anymore though. So... with
56 jadedchameleon : Huh? Y+ on UA is 34"+ pitch. Regular UA economy is 31-32". I'm not sure if leather is positive or negative (I prefer the UA 757 cloth seats over the
57 CitationJet : How is spell check going to find the incorrect useage (lose rather than loose)? Both are spelled correctly.
58 Post contains images F9Fan : PHX is a lot closer to LAS compared to DEN to LAS (or even DEN to PHX). DEN was designed to favor connecting traffic, especially with the pinwheel ru
59 gigneil : Which is stupid. Houston needs to focus on Houston O/D traffic. It's out of the way for just about, oh, the entire damn country as a connecting hub.
60 joeman : (Except for maybe destinations south of it) BRAVO
61 swa4life : You're fudging the numbers a little bit. UA economy is 31 (I see no cases of it being 32" on seatguru) inches period. If you're comparing apples to a
62 jadedchameleon : 32" is there on some of the express planes -- look a little closer at seatguru. The average US consumer does pay for Y+, sure, but it's also a free p
63 rdh3e : Can anyone provide the link from the thread where we discussed the competitive dynamics of the Denver market between these 3? It was an interesting re
64 WNCrew : Very good point! I say, if your chances are good, and all things else equal, fly someone who you have the best odds on.
65 ckfred : Here's the all important question. How long can DEN be a hub for three carrriers? Back in the 80s, Continental, the original Frontier, and United all
66 slcdeltarumd11 : Yeah i pretty much agree. I think WN is locked on DEN and is the least likely to leave by far they have never been one to back down and have the cash
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