Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
WN Effect Running Its Course?  
User currently offlineTriple7Lr From United States of America, joined Sep 2012, 94 posts, RR: 0
Posted (1 year 5 months 1 week 6 days 13 hours ago) and read 7553 times:

According to the AJC passengers in ATL haven't experienced any decline in prices and in some cases have experienced increases.

http://www.ajc.com/news/business/sou...in-carriers-first-year-in-a/nWLbn/

64 replies: All unread, showing first 25:
 
User currently offlineCubsrule From United States of America, joined May 2004, 22718 posts, RR: 20
Reply 1, posted (1 year 5 months 1 week 6 days 13 hours ago) and read 7477 times:

WN fares have long been higher than FL fares in similar markets. The inability to drive revenues has long been one of FL's problems. I'm not sure how this is news.


I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineAv8rDAL From United States of America, joined Jan 2004, 462 posts, RR: 1
Reply 2, posted (1 year 5 months 1 week 6 days 13 hours ago) and read 7465 times:

"The Southwest Effect"
...term was coined in 1993 by the U.S. Department of Transportation to describe the considerable boost in air travel that invariably resulted from Southwest's entry into new markets, or by another airline's similar activity (Ritter) . Southwest offered dramatically lower air fares than established airlines that usually enjoyed a near-monopoly in the communities.
Source: Wikipedia

Understandably, this is not as noticable in ATL due to the already existing saturation of major markets by DL and already having FL as an established LCC keeping many fares very competitive. AirTran began West Coast flying with a couple leased A320s prior to taking delivery to their first B737-700 in 2003. ATL-LAX could then be done for $99 one-way, when previously this was a $400-600+ roundtrip flight on Delta, plus junk, plus Saturday night stay, etc.

So AirTran has already given ATL much of its "Southwest Effect" years ago.

The Effect would be more noticable in smaller cities getting new service from WN which were previously only served by one or two legacy carriers serving different hubs with RJs.



Maintain thine airspeed, lest the Earth rise up and smite thee.
User currently offlineouboy79 From United States of America, joined Nov 2001, 4565 posts, RR: 23
Reply 3, posted (1 year 5 months 1 week 6 days 13 hours ago) and read 7463 times:

Quoting Cubsrule (Reply 1):
WN fares have long been higher than FL fares in similar markets. The inability to drive revenues has long been one of FL's problems. I'm not sure how this is news.

Yeah exactly. Anyone with half a brain wouldn't expect fares to go down in ATL. A hub for a large LCC is already pretty much at its low point for air fares.


User currently offlinebobloblaw From United States of America, joined Jan 2012, 1607 posts, RR: 1
Reply 4, posted (1 year 5 months 1 week 6 days 12 hours ago) and read 7322 times:
Support Airliners.net - become a First Class Member!

Quoting Triple7Lr (Thread starter):
According to the AJC passengers in ATL haven't experienced any decline in prices and in some cases have experienced increases.

Yup, because FL had LOWER costs and thus charged lower fares. Surprise surprise Clark Howard, WN isnt the savior everyone thought it would be for ATL.

WN's rising costs have put a damper on the "Southwest Effect" not just in ATL but everywhere they fly.


User currently offlineLHCVG From United States of America, joined May 2009, 1542 posts, RR: 1
Reply 5, posted (1 year 5 months 1 week 6 days 12 hours ago) and read 7289 times:

Quoting bobloblaw (Reply 4):
WN's rising costs have put a damper on the "Southwest Effect" not just in ATL but everywhere they fly.

Especially as they continue moving into the big business airports instead of the outlying ones - doubt you see many sub-$50 fares at DCA and LGA.


User currently offlineCubsrule From United States of America, joined May 2004, 22718 posts, RR: 20
Reply 6, posted (1 year 5 months 1 week 6 days 12 hours ago) and read 7290 times:

Quoting bobloblaw (Reply 4):
Yup, because FL had LOWER costs and thus charged lower fares.

Are you suggesting that FL could have sustained a higher fare level but chose not to? If so, FL has some 'splainin to do to its shareholders.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineB747forever From Sweden, joined May 2007, 17051 posts, RR: 10
Reply 7, posted (1 year 5 months 1 week 6 days 12 hours ago) and read 7267 times:

Quoting LHCVG (Reply 5):
Especially as they continue moving into the big business airports instead of the outlying ones - doubt you see many sub-$50 fares at DCA and LGA.

You barely see any sub-$50 fares anywhere in their system. The new lowest price seems to be $59 on a few select routes.



Work Hard, Fly Right
User currently offline0NEWAIR0 From United States of America, joined May 2007, 939 posts, RR: 0
Reply 8, posted (1 year 5 months 1 week 6 days 12 hours ago) and read 7210 times:

Quoting Triple7Lr (Thread starter):
According to the AJC passengers in ATL haven't experienced any decline in prices and in some cases have experienced increases.

Higher fares and less competition on routes were known side effects before the acquisition was finalized. This should be no suprise to anyone that was even kinda-sorta-maybe paying a little bit of attention when the acquisition was first being discussed.



"The future belongs to those who believe in the beauty of their dreams."
User currently offlineRevelation From United States of America, joined Feb 2005, 12333 posts, RR: 25
Reply 9, posted (1 year 5 months 1 week 6 days 12 hours ago) and read 7208 times:

Quoting bobloblaw (Reply 4):
WN's rising costs have put a damper on the "Southwest Effect" not just in ATL but everywhere they fly.

That, plus the "low hanging fruit" of under-utilized outlying airports has long since been picked. As above that term was coined in 1993, twenty years ago. Nowadays we see WN putting metal into quite saturated airports, ATL being one of them.



Inspiration, move me brightly!
User currently offlineCubsrule From United States of America, joined May 2004, 22718 posts, RR: 20
Reply 10, posted (1 year 5 months 1 week 6 days 12 hours ago) and read 7139 times:

Quoting Revelation (Reply 9):
Nowadays we see WN putting metal into quite saturated airports, ATL being one of them.

True, but we do see an effect on fares even in the saturated markets. Look at the drop in average fare on CHI-MSP in late 2008/early 2009, for instance.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinegrain From United States of America, joined Sep 2008, 92 posts, RR: 0
Reply 11, posted (1 year 5 months 1 week 6 days 12 hours ago) and read 7085 times:

The only problem is that when they has sub 50 dollar fares, a barrel of oil was 20 dollars.

User currently offlinepar13del From Bahamas, joined Dec 2005, 7055 posts, RR: 8
Reply 12, posted (1 year 5 months 1 week 6 days 11 hours ago) and read 7036 times:

A question, is it not a fact that the combined carrier has been lowering service in and out of ATL?
If accurate, how exactly would you expect to see the WN effect, the reductions may actually work in, allowing DL to increase fares.


User currently offlineLHCVG From United States of America, joined May 2009, 1542 posts, RR: 1
Reply 13, posted (1 year 5 months 1 week 6 days 11 hours ago) and read 6998 times:

Quoting B747forever (Reply 7):
You barely see any sub-$50 fares anywhere in their system. The new lowest price seems to be $59 on a few select routes.

Agreed, I was just making the point that those airports among others aren't places where WN is going to offer many cheapie specials at those prices.


User currently offlinekcrwflyer From United States of America, joined May 2004, 3795 posts, RR: 7
Reply 14, posted (1 year 5 months 1 week 6 days 11 hours ago) and read 6909 times:

Quoting ouboy79 (Reply 3):
Yeah exactly. Anyone with half a brain wouldn't expect fares to go down in ATL.

Most people aren't willing to pay enough attention to things to be aware of that.

Quoting Cubsrule (Reply 1):

WN fares have long been higher than FL fares in similar markets.

And everywhere.

Quoting bobloblaw (Reply 4):
Yup, because FL had LOWER costs and thus charged lower fares. Surprise surprise Clark Howard, WN isnt the savior everyone thought it would be for ATL.

WN's rising costs have put a damper on the "Southwest Effect" not just in ATL but everywhere they fly.

                 
Imagine that.

Quoting LHCVG (Reply 5):
Especially as they continue moving into the big business airports instead of the outlying ones - doubt you see many sub-$50 fares at DCA and LGA.

WN wishes that airport costs were the bulk of their operating costs. That guy loading bags at LGA for $25 dollars an hour is a much larger problem for WN than whatever they may be paying for gates/rent/slots.


User currently offlinebobloblaw From United States of America, joined Jan 2012, 1607 posts, RR: 1
Reply 15, posted (1 year 5 months 1 week 6 days 11 hours ago) and read 6879 times:
Support Airliners.net - become a First Class Member!

Quoting Cubsrule (Reply 6):
Are you suggesting that FL could have sustained a higher fare level but chose not to? If so, FL has some 'splainin to do to its shareholders.

The lowest cost carrier is the price leader generally. Youre assuming that demand for FL's product is price inelastic. Thus raising fares results in more revenue. From being a fairly loyal FL traveler, I'd say their customers are quite elastic in demand. Thus a hefty fare increase across the board would result in LOWER revenue.


User currently offlineouboy79 From United States of America, joined Nov 2001, 4565 posts, RR: 23
Reply 16, posted (1 year 5 months 1 week 6 days 10 hours ago) and read 6761 times:

Quoting kcrwflyer (Reply 14):
WN wishes that airport costs were the bulk of their operating costs. That guy loading bags at LGA for $25 dollars an hour is a much larger problem for WN than whatever they may be paying for gates/rent/slots.

So you are saying someone shouldn't be paid well for sticking with the same company, in a position that obviously takes a physical toll, for over 10 years (the top out point)?

Of course there are some areas of productivity that needs to be improved, but after 40 years of consecutive profitability, I don't think the guy on the ramp is the main problem. Put WN's contracts in place at the other carriers and see how well it matches up at that point. There is something to be said about continuing to be profitable and having the highest compensation in the industry.

Quoting par13del (Reply 12):
A question, is it not a fact that the combined carrier has been lowering service in and out of ATL?
If accurate, how exactly would you expect to see the WN effect, the reductions may actually work in, allowing DL to increase fares.

It has come down some but I still think it is around 180 departures a day, combined.

Quoting B747forever (Reply 7):
You barely see any sub-$50 fares anywhere in their system. The new lowest price seems to be $59 on a few select routes.

Sub $50 fares seem to be reserved for the fare sales every few months. The one last week was $49 on nonstops under 500 miles, IIRC. They seem to pop up 3 or 4 times a year. FlyerTalk seems to have it down to a science for when the fare sales hit and how much they'll be.  


User currently offlineJBAirwaysFan From United States of America, joined May 2009, 945 posts, RR: 0
Reply 17, posted (1 year 5 months 1 week 6 days 10 hours ago) and read 6680 times:

Let's face it. Southwest is no longer the airline it was even 10 years ago. Their business model has changed, operating costs increased. You will usually find cheaper airfares on JetBlue than you would on Southwest.


In Loving Memory of Casey Edward Falconer; May 16, 1992-May 9, 2012
User currently offline0NEWAIR0 From United States of America, joined May 2007, 939 posts, RR: 0
Reply 18, posted (1 year 5 months 1 week 6 days 10 hours ago) and read 6622 times:

Quoting JBAirwaysFan (Reply 17):
You will usually find cheaper airfares on JetBlue than you would on Southwest.

There was actually a study done confirming this around 2007 or 2008 (it came out of Europe but it was concerning US market). It basically said that you are more likely to find the highest fare on SWA within 21 days of travel than you are for any other airline.



"The future belongs to those who believe in the beauty of their dreams."
User currently offlinekcrwflyer From United States of America, joined May 2004, 3795 posts, RR: 7
Reply 19, posted (1 year 5 months 1 week 6 days 9 hours ago) and read 6517 times:

Quoting ouboy79 (Reply 16):
So you are saying someone shouldn't be paid well for sticking with the same company, in a position that obviously takes a physical toll, for over 10 years (the top out point)?

Hang on let me read what I said................................(time elapsing)..................................Nope, didn't say that.

Quoting ouboy79 (Reply 16):
Of course there are some areas of productivity that needs to be improved, but after 40 years of consecutive profitability, I don't think the guy on the ramp is the main problem. Put WN's contracts in place at the other carriers and see how well it matches up at that point. There is something to be said about continuing to be profitable and having the highest compensation in the industry.

One guy isn't the main problem, but ten thousand of them adds up. Their labor costs are high. I'm not saying it's not great for employees. It is. I'm not saying employees don't deserve it.. I'm sure most do. All I'm saying, is that it is a high cost to them. Which isn't my opinion, it's a fact.


User currently offlinesrbmod From , joined Dec 1969, posts, RR:
Reply 20, posted (1 year 5 months 1 week 6 days 9 hours ago) and read 6471 times:

Quoting Cubsrule (Reply 6):
Are you suggesting that FL could have sustained a higher fare level but chose not to? If so, FL has some 'splainin to do to its shareholders.

I can tell you from experience that there have been times when I was checking RT fares on AirTran and Delta and the cheapest airfare and AirTran's cheapest fares for the flights I wanted to take were over $250 more than Delta because all of their cheapest fares at the time had already been sold. I bought the cheaper fare on Delta and have remained a loyal Delta flier ever since. Delta typically matches FL on flights out of ATL and many times, they charge a penny or two less than AirTran.

Another thing to remember is that AirTran has had routes in which for a number of years they had a monopoly on them and could charge whatever they wanted to and people gladly paid them as the other options were not as attractive. Delta eventually offered service to every FL market out of ATL (mainly using their Delta Connection carriers).

Anyone that thought fares in Atlanta were going to go down as the result of Southwest's entry into the market were kidding themselves. AirTran had been keeping the fares low out of ATL for years and WN wasn't going to cause the fares to drop any lower even if WN had not bought FL.


User currently offlineouboy79 From United States of America, joined Nov 2001, 4565 posts, RR: 23
Reply 21, posted (1 year 5 months 1 week 6 days 6 hours ago) and read 6216 times:

Quoting kcrwflyer (Reply 19):
One guy isn't the main problem, but ten thousand of them adds up. Their labor costs are high. I'm not saying it's not great for employees. It is. I'm not saying employees don't deserve it.. I'm sure most do. All I'm saying, is that it is a high cost to them. Which isn't my opinion, it's a fact.

If the company can afford it, then what is the problem? Other than a few whining immature brats on a.net, I'm not really seeing a ton of crying anywhere else. Some loud investors here and there, but nothing overwhelming where they are wanting to take over the company.


User currently offlineN908AW From United States of America, joined Aug 2005, 922 posts, RR: 1
Reply 22, posted (1 year 5 months 1 week 6 days 3 hours ago) and read 6005 times:

Quoting ouboy79 (Reply 16):
So you are saying someone shouldn't be paid well for sticking with the same company, in a position that obviously takes a physical toll, for over 10 years (the top out point)?

I think what he was saying was that $25/hour makes it harder to be, you know, low cost. Irrespective of his deserving the pay, that's the way it goes. Southwest pays its employees well and that is one of many reasons that WN is no longer the cost leader in the market by a long shot (Hi, Spirit). But they seem to be fine with that.



'Cause you're on ATA again, and on ATA, you're on vacation!
User currently offlineCubsrule From United States of America, joined May 2004, 22718 posts, RR: 20
Reply 23, posted (1 year 5 months 1 week 6 days 2 hours ago) and read 5924 times:

Quoting bobloblaw (Reply 15):
From being a fairly loyal FL traveler, I'd say their customers are quite elastic in demand. Thus a hefty fare increase across the board would result in LOWER revenue.

I think that's right, and it is a problem with the FL business model. WN has historically been quite good at driving passengers in to higher fare buckets (i.e. making them purchase something other than the cheapest available ticket). Bringing that skill to FL will drive up average fares regardless of the cost difference between WN and FL. It's about more than just costs.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinejayunited From United States of America, joined Jan 2013, 887 posts, RR: 1
Reply 24, posted (1 year 5 months 1 week 6 days 1 hour ago) and read 5790 times:

In the middle of the last decade WN had a huge effect on the U.S. airline industry especially from 2008-2010 when all the other airlines as a lot of exposure to the volatile fuel prices WN was largely protected due to their incredible hedges. During that time the other airlines tried to raise their ticket prices but the price hikes but it didn't work all the time because WN refused to follow suit. Those hedges along with their lower operating cost allowed WN to offer fares for anywhere between $29-$99 dollars one way the other majors could not match those fares which allowed WN to expand a lot because they along with the economy forced the other airlines to contract. The one example that I can think of is UA's DEN hub between late 2007 thru early 2009 UA was forced to the number of flights offered at DEN and WN saw an opening came in with force and exploited UA's weakness and although UA tried to match WN's fares UA couldn't match $39 dollar fares for a sustained period of time on all the routes that WN was starting up. Their hedges and their lower operating cost gave them a leg up on UA

But now that those hedges have expired and WN operating cost have gone up a bit what we saw last year was WN in some cases lead the charge on fare increases which the other majors were eager to match. I know I'm probably going to be crucified for this statement but I don't really think WN is a low cost carrier any longer. In some cases their fares are higher than those being charged by AA,DL UA or US on certain routes. So in my opinion WN ability to lower fares when they enter a market is no longer true in every market because they no longer have have the cost advantages that they had in 2008-2010.


25 iowaman : ATL is a poor example to use as other's have said. FL already had low-fare stimulation in nearly all the markets WN is now flying out of ATL. A good e
26 n7371f : Southwest effect has been dead for several years now. Have to give them credit though, they have done an amazing job of convincing people they are the
27 planespotting : I took multiple trips on that route during that time, and I never paid more than $200 r/t, and it was typically $150 or less. For a more recent examp
28 bobloblaw : Good point.
29 ouboy79 : If I remember right, Southwest led 3-4 fare increases last year and all were matched immediately. United attempted one fare increase, that Southwest
30 GSPflyer : The "Southwest Effect" is more prominent at smaller airports that they serve, such as GSP. Just looking at flights in May, a round-trip flight GSP-PHL
31 AmericanAirFan : AUS-SFO, AUS-SJC they match ALL the other airlines within a few dollars always being the cheapest though... When you add in all the other carrier's ba
32 Post contains images HPRamper : LCC is not the same as LFC, although the two are generally related.
33 Av8rDAL : Southwest also has a very, very loyal following. When you have an airline that is unique with its product, and you have customers who are big fans of
34 ScottB : The problem with short haul (under roughly 250 miles) isn't just airfares. Post-9/11/shoe bomber/underwear bomber, flying has become more of a hassle
35 N908AW : Granted. I was simply speaking from a cost point of view. Differentiating/generating loyalty is a completely separate strategy.
36 n7371f : Yeah that's a good point in many markets. But then I point to one like GEG-SEA where in the winter, the interstate can sometimes be closed and travel
37 EA CO AS : The "Southwest Effect" isn't just that average air fares come down in a given market; it's also (and primarily, in my opinion) the fact that their ent
38 EaglePower83 : Completely agree. My dad and many of my friends are Southwest fanatics. I get crap all the time for flying AA. "Why don't you fly SW? You should fly
39 Cubsrule : Of course, talking about Chicago in particular, I'll gladly pay a premium for MDW's more user-friendly facilities, much better on-time record and low
40 FlyPNS1 : And what happens when you fly AA and have to pay $100+ in bag fees, change fees, seat selection fees, etc? Will WN still be so expensive?
41 Post contains images Cubsrule : The other thing is that it's a fallacy to suggest that WN has ever promised the lowest fares. What WN promises are low, fair fares, and I think WN st
42 ouboy79 : Not to mention fairly easy to understand. You aren't going to get raped if you just need to book a one way flights. People traveling that need open e
43 Cubsrule : I book a lot of one way trips, and I'm seeing more and more legacy fares that do not require a round trip purchase, even in cheap fare buckets. I rec
44 ouboy79 : Ahhh nice. I was looking at some a couple months ago and the market I was looking in still required RT with the WN comparable fare. Good to see more
45 Cubsrule : It is. These days, I think what differentiates WN is that their fare rules are very easy to understand since they only have three fare buckets, two o
46 Post contains images point2point : There is the consideration of what WN did in the DEN market, the 5th busiest airport in the U.S., and in the time frame below the 10th busiest airport
47 HPRamper : The vast, vast majority of the flying public knows beforehand when they are going to fly, and do not need to change their dates or times...bring one
48 FlyPNS1 : Even one checked bag will cost you $50 extra roundtrip. For a family of four traveling on vacation, that's an extra $200 for the "pleasure" of flying
49 HPRamper : A family of four traveling on vacation, after the expenses of everything else on top of the airfare itself, will probably not bat an eye at $200....e
50 ouboy79 : Umm...what world do you live in? These days a family of four would still appreciate saving $200. Now if both parents are bringing in 6 figure salarie
51 Cubsrule : It's also a complete red herring for the 90 plus percent of us who have reliable internet access. Check in online anywhere close to 24 hours and you'
52 Post contains images rwy04lga : ''Get the Delta Skymiles Card from American Express and you and 8 additional party members can get a first bag free when you fly Delta. That's a savi
53 srbmod : Let's not forget that Southwest's AirTran subsidiary still charges for checked bags as well as other fees that Southwest doesn't (in fact, WN just an
54 Raddek : WN needs to connect DAY-MDW. There are a lot of travelers who ask and darn near beg for MDW service from here. They are tired of paying high fares on
55 ouboy79 : WN's own fees (oversized/extra bags) increased as well...but some also decreased a bit. Everything is essentially uniform now between the companies.
56 HSVflier : Couldnt agree more with the above statements. WN is not what they used to be, fares are always more expensive in my experience and their network is s
57 ouboy79 : How have they gone down hill? Your comment about the network being subpar makes no sense - it has never been more extensive. So that can't be it. Now
58 FlyPNS1 : I've seen lots of people go out of their way just to save $10 on an airfare, but somehow you think they won't bat an eye at $200?? I've never seen it
59 HSVflier : If you would note i stated non major metro areas. Im sure there are some cheap fares in the super saturated NE market but when i have looked at fares
60 Post contains links srbmod : Gary Kelly said in a recent interview with CNBC that WN at some point could start charging for bags. 'Never Say Never' on Bag Fees: Southwest CEO Whi
61 ouboy79 : In most cases it is a couple markets like ECP, DCA, etc that get limited out of the super low fares...but everyone else is pretty fair game. You just
62 iowaman : I'd have to disagree, IIRC a substantial amount of WN passengers in some markets are last-minute bookers.
63 EaglePower83 : I guess that doesn't apply to me since I have AA's Citi card and my 1st bag is free for myself and 4 companions. Even with the annual fee, 2 flights/
64 ouboy79 : So that is your unique situation. The vast majority of pax aren't going to have the various credit cards and get the perks from them. So for you it w
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Herb Says WN Was On Its Way To A Record Till 9/11 posted Mon Sep 11 2006 00:04:29 by KarlB737
WN Should Fire Its PR Staff And Advisors posted Fri Dec 9 2005 15:18:46 by Wjcandee
Articles: Reg. Fares And WN Effect At PHL posted Tue Feb 22 2005 15:18:57 by PHLBOS
Euro Zone Crisis And Its Effect On Airbus posted Fri Jun 29 2012 10:52:22 by brilondon
WN In DSM. Effect On OMA & MCI? posted Thu Apr 5 2012 11:44:45 by evanbu
Will WN paint its 717's? posted Thu Feb 16 2012 10:21:05 by xdlx
WN/FL Merger Effect On RIC/PHF/ORF posted Tue Sep 28 2010 18:49:55 by bpat777
When Will WN Change Its Logo? posted Sun Nov 11 2007 05:00:24 by AA388
Will WN Use A Special A/C For Its Return To SFO? posted Tue Aug 14 2007 23:31:55 by Stealth777
WN May Slow Down Its Growth posted Tue Jun 5 2007 19:56:50 by PNQIAD