Most "stupid" business decisions made by airline management are the results of the airlines being run by "bean counters" who have no vision of the future beyond the next two or three quarterly statements. Think about it. WN is totally unionized. While their pay scale is a little less than the majors, it is certainly far above AirTran, America West, Vanguard, or Jet Blue. The airline still operates 737-200A's and even in this environment, is making money, and yet their yields are much lower than the majors. Southwest doesn't serve food but neither does any other airline except on very long flights, over four hours. Why is this? You figure it out. Southwest is market driven. It is run by marketing people, not accountants. The idea of depending on someone paying $1800.00 to fly from ATL to LGA RT is lunacy. The reason that the airlines are losing money is simple. There is a recession and when things slow down, corporate travel is the first thing to be cut. Mom and Dad still come and visit the grandchildren, but if a meeting in BOS is not absolutely necessary, it isn't held. United pulls the Shuttle by United. Delta cuts Delta Express in half. USAirways cuts their MetroJet service, and Southwest enters the markets and makes money. Now think about what Delta saves by grounding the 737-232's and cutting back Express operations. They get to furlough some pilots. They had some flight attendants take leaves, and they save some fuel, that is now much cheaper than it was a year ago. Their fixed costs stay the same, but because these accounting idiots have arbitrarily decided to allocate fixed costs to these flights, they claim that they lose money. That is a bunch of hogwash. I passed the CPA exam. I understand cost accounting, and its this kind of decision making that has put the majors in the position that they are in.
Another good example of this is the accounting for Frequent Flyer Miles. Now just how are these miles created, from selling tickets, expensive ones. It takes about 50,000 miles to get a FC roundtrip ticket to Hawaii, 100,000 miles for a pair. Now how much revenue was generated from the passenger that earned those miles. Most of these miles are earned by high yield passengers. At at least 50 cents per mile flown. So the airline earns $50,000.00 or more from the passenger who receives 100,000 FF miles. The cost of two FC seats to Hawaii, is about $5,000.00 so this amounts to a 10% discount on the flights that the mileage was earned on. Do you get my drift? Flying those passengers to Hawaii earned that airline a $50,000.00 on other flights, but instead, they cancel ATL-HNL or ORD-HNL service because they claim that a full 15% of the passengers are flying on FF tickets. Well if they don't fly to Hawaii, they will use the miles elsewhere. Its just an accounting game, but the sad thing is that hard working people are losing their jobs, and stockholders are losing their investments because these accounting idiots can't see beyond the scope of their tunnel vision.