FRA2DTW
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Can Anyone Compete With Southwest?

Mon Jan 24, 2005 5:30 am

They "own" more major U.S. airports than any other carrier and are continuing to aggressively expand. Their brand is extremely strong and their unique business model has no rival - one type fleet, coach only seating, simple pricing, amazing efficiencies, great corporate culture, hedged fuel, non-excessive compensation for their executives, no pension worries, and NO DEBT. They are the only pricing power in the U.S. today. Their codesharing with ATA opens up even more markets to them, incl. Hawaii and perhaps even Europe down the road.

Can anyone slow down their drive to become America's pre-eminent airline? They already board more pax than anyone else. AA and NW used to defend their turf voraciously when threatened but have been defanged. Liquidation of US/UAL will not help because others, both legacy and LCC, will fill the void. Before SW marginalizes every other carrier, what strategy need the others to implement? Consolidation (NW/CO, AA/DL), more bankruptcies, greater foreign ownership, more codesharing, dumping pensions, attacking scope? How are the airline CEOs seeing the future while worrying about SW?
 
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ERJ170
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 5:35 am

I think HP is doing well with WN at PHX and LAS.. so I think they are competing with WN very well.. other than that.. I don't know...
Aiming High and going far..
 
NIKV69
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 5:37 am

It sure doesn't look like anyone can right now. Fuel prices are killing everyone. B6 may be able to give them a run for there money but only after they build up their fleet and expand. WN has 400 planes and keeps them in the air better than anyone. So it will be quite a while before B6 can rival them. Right now WN is king of the mountain.
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
ual747den
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 5:50 am

I think that you have a distorted view of WN (Not SW) They are not the #1 airline in the US! AA is, then UA, then CO! Most airlines compete with WN in some sort of way. WN would never be able to take over the US airline industry they just have a very nice nitch and they are taking advantage of that and will continue to do that. I don't think that WN will fly to Europe that would go against their business plan and if they started to break away from being the low cost nitch airline they will be just another LCC and will have to same problems as the rest of them. WN has a great business going and they will keep it that way.
/// UNITED AIRLINES
 
isitsafenow
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 6:37 am

How do you measure Number one?
Most routes?
Most planes?
Most cities served?
Most $$$$?
Most Pax carried?
Most employees?

Now to answer the lead question, no one will compete with Southwest until the work rules are equalized. Can you see a pilot for NW or a Mechanic for USAir loading bags to expedite a departure? And we know why...not because they don' want to help and give it the team effort, its because of union rules agreed to the union and management under negotiations. When the field is level to Southwest playing rules, then a carrier can compete.
safe

[Edited 2005-01-23 22:57:50]

[Edited 2005-01-23 22:58:38]
If two people agree on EVERYTHING, then one isn't necessary.
 
exFATboy
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 6:47 am

WN has debt - their 12/31/03 balance sheet (it's on their website) shows just over $1.3 billion in long-term debt. A quick glance at their 2003 Annual Report shows references to both unsecured debt and Aircraft Secured Notes.

Don't get me wrong, when you have $5 billion in stockholder equity against $1.3 billion in long-term debt, that's excellent, and gives them a lot of maneouvering room other carriers just don't have. But it is incorrect to say they have "NO DEBT."

(One side point - I know it's popular to bash executive compensation, but if you look at other industries, most exectives who are responsible for companies the same size as the "legacy carriers" (measured by assets, employees, or sales) make more than their airline counterparts. Executive compensation is set by the market, just like any other pay scale.)

WN has weaknesses, too: their brand isn't as strong as you might think, in the same way as Wal-Mart's brand is "strong" in terms of name recognition, but doesn't connotate quality. (I've used the "WN=WalMart, B6=Target" analogy many times.) The "737 Only" fleet helps in terms of keeping expense down, but limits their ability to enter some smaller markets that would offer good connection feed (say, FAT-LAS) - there isn't enough demand to offer several 737s per day to get the efficiencies the WN model calls for...they could use fewer 737 flights, or more flights with smaller A/C, but not both. Their airport choices in the Northeast limit code-sharing opportunities for destinations outside North America.

More tellingly, they've lacked imagination in the past, or have maybe been too conservative, which causes them to miss opportunities. They could have entered JFK, for example. Also, there are some US-Canada routes they could have entered easily and would probably dominate by now (for example, YVR-LAX, YYZ-FLL, YYZ-TPA.) Now, with WestJet, Jetsgo, and CanJet coming south, the moment's been lost. (The ATA deal and their more aggressive moves in Pennsylvania might be a sign of change here, though.)

And how many major airports do they really "own"? Sure, they "own" Midway and DAL, but so what? Those are secondary airports in multiple-airport markets. They "own" Manchester and Islip. Okay, that's all well and good, but again these are secondary airports. There's good money to be made here, particularly at ISP, but they have limitations as well.

WN does what they do very, very well, but they haven't proven they can do anything else effectively - they're something of a "johnny one-note", again much like Wal-Mart. (It's a hell of a good note, don't get me wrong! All those consecutive quarterly profits speak for themselves!) But they have yet to prove they can expand beyond their traditional business model. The ATA deal is a first step toward that, I'm curious to see how it'll work out...
 
AeroWesty
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 7:14 am

Has it really been so long no one remembers WN's venture into:

1) Assigned leather seating with extra legroom
2) "Innovative" meals
3) Business Class

One word: TranStar

Cheers.
International Homo of Mystery
 
NIKV69
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 7:19 am

AA better be careful. With B6 growing the way they are AA may be in big trouble in 3 or 4 years. As it is the only thing keeping AA going is their biz pax.
WN will always be a second class carrier flying into smaller cities but making money and keeping their pax happy. B6 is poised to become the big fish in 5 years or so.
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
isitsafenow
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 7:38 am

Your analogy may be right on track, but why did you single out AA in your post?
AA and Southwest compete in Dallas and Chicago but at different airports. Of all the airlines in the country I am curious why AA?
safe
If two people agree on EVERYTHING, then one isn't necessary.
 
SWAFA30
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 7:44 am

But they have yet to prove they can expand beyond their traditional business model.

Well, sorta. The original business model was short-haul, high-frequency utilizing mainly secondary airports. Over the past few years that has expanded into transcon long-hauls and congested airports such as PHL.
 
JFernandez
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 7:45 am

I'm confused by what you mean by "can anyone compete with Southwest"? As a pretty damn regular flier (although maybe not so much compared to all on these boards), WN has almost never even factored into a single one of the 100 or so trips I've done in the past couple of years. I've yet to fly them.
 
paddy78
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 7:57 am

I would agree that Southwest poses the biggest threat to AA simply becasue AA (being the largest and most stable of the legacies right now) has the most to loose. With all thier success, planes, routes, and customers behind them, it will probably take AA a long time to see that the industry is changing at its very foundation since the numbers may not show it for a while still. At least UAL is being forced to change (whether or not they will remains to be seens), CO is already changing, and I think a lot of people at DL have had thier wakeup call now. AA, although they are still in hole from the TW fiasco and 911, is making progress towards getting the ship "back on course", which in my opinion, is really dangerous right now since nobody knows where the edge of the world is anymore.

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Cactus739
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 8:03 am

Nikv69...

"a second class carrier flying into smaller cities"? While the "second class carrier" is purely opinion and judgemental, the smaller cities comment well, its just not true and you know it...  Smile

While some of the cities they fly to are small... Phoenix, Seattle, Las Vegas, Philidelphia, Nashville, Salt Lake City, Dallas, Houston, Ft Lauderdale, Baltimore, St Louis, Detroit, New Orleans, San Diego, Los Angeles.... not what I'd call "smaller cities". Oh, woops...don't forget Chicago... small Illinois city.

You can't fix stupid.... - Ron White
 
DfwRevolution
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 8:04 am

Can anyone slow down their drive to become America's pre-eminent airline?

I think it's important to remember that WN has no ambitions to dominate the North American market. They don't chase market share, they simply make calculated moves at expansion... their ranking as the largest domestic carrier is simply a by-product of this practice.

And how many major airports do they really "own"? Sure, they "own" Midway and DAL, but so what?

I'd argue BWI, LAS, PHX, and HOU as well... those are hardly minor airports.

But they have yet to prove they can expand beyond their traditional business model.

Their "traditional business model" has been in constant flux since Day 1. WN is always changing things and making tweaks to the system... most people (even anaylst) often give them far too little credit in this department...

One very important thing to remember is that WN constantly re-invest in their airline. Of the $85 million USD profit they made in Q4-2004, you can bet most of it will find its way to future WN infastructure. Truely, the best way to save money is to spend it. In a time of post-9/11 recession, WN has invested in 40 new aircraft, purchased winglets for 275 aircraft, added two new stations, continued the retrofit of new cabins, purchased a share of ATA, and begun a legal battle against the Wright Ammendment.

Meanwhile, major airlines are struggling to pay bills and are being left in the dust.

[Edited 2005-01-24 00:12:10]
 
NIKV69
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 8:15 am

Isitsafenow,

See reply #3

Cactus,

I said the wrong thing, I meant smaller airports. Would a first rate carrier say no to DFW? Fly into ISP not JFK? Midway instead of O'Hare? Not fly anywhere but the USA? WN is great at what they do, but when you boil it down they are a second rate carrier and that is why you pay so little to fly them. Bare bones prices for bare bone service.
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
DfwRevolution
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 8:20 am

WN is great at what they do, but when you boil it down they are a second rate carrier and that is why you pay so little to fly them. Bare bones prices for bare bone service.

"And the meek shall inherit the Earth" - God.

Would a first rate carrier say no to DFW?

Eh I dunno... jetBlue turned DFW down, and we all now Delta pulled their ejection seat and bailed out... it really isn't that great of an airport  Big grin
 
paddy78
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 8:36 am

What!?? WN's strategy is not based on being a second class carrier, quite the opposite. Flying into smaller airports is one hell of a sneaky tactic and you see similar things in the business world all the time. I live less than a mile from a major mall, is the Walmart in the mall? No, its right across the street. Is there a Sonic in the food court, no, its across the parking lot. Do people who would go to the mall still go to the Walmart and the Sonic? You bet, they are clogged with customers who live nearby but want nothing to do with the mall because it is a royal pain to get in and out of. On top of that, I can pay 10 bucks for a CD at the Best Buy less than a mile away from the mall or pay 20 bucks for the same CD at the Sam Goody's in the mall.

WN is extremely shrewd in thier choices of stations; avoiding the fortress hubs but still tapping into the market is one of the cornerstones of their success. In many cases, this actually improves the customer's perception of thier service because it removes many of the hassle factors associated with giant airports. I worked in a small airport for my entire career, and let me tell you, with only a few exceptions people like it a lot better than going to the super-hub less than 70 miles away. Even people who live in that city make the drive down here because they know it will be a breeze to get through, very low stress, and planes are ontime a lot more often (not to mention the parking is a helluva lot cheaper!). Heck, it takes more time to get through security in a hub sometimes than it does to drive to a smaller airport, check in, eat breakfast, and board your flight in a smaller airport. -especially ORD, I would take MDW over ORD any day of the week and twice on sunday.
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goingboeing
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 8:38 am

WN does what they do very, very well, but they haven't proven they can do anything else effectively - they're something of a "johnny one-note", again much like Wal-Mart.

Perhaps the legacies could learn something....Instead they are the "we are all things to all people in our quest to lead in the vaunted "market share" race". Southwest is entirely happy to come in second or third in "market share" in any market, just as long as they make a profit. The others won't do that. They want to offer first class service, and deep discount fares. Southwests strategy has been one that is very attractive to business flyers, who still fly them, and more importantly, are willing to pay the fully refundable fare. Southwest has far more passengers who paid full fare than any of the other US airlines. The other airlines now find themselves in a position of fighting for every last leisure traveller out there (in the form of loss leader fares) and still hope to be able to bend over the business passenger. Delta has a start with their "simplifares", but woe be the traveller who doesn't live in a market with LCC competion. MCI-DFW for example. LAst minute fares here used to be $870 for a round trip. Simplifares has "lowered" that to $862.90. But they only fly barbie jets on the route.

More tellingly, they've lacked imagination in the past

Really? They were pretty imaginative to come up with the business plan that they did, and more importantly, stuck with. Everybody and their dog said that NOBODY would fly an airline that didn't have assigned seats, meals or first class. Yet they DO lead the US market in passengers carried.

As far as WN=Walmart B6=Target analogy...the only difference is TV sets. Period.
 
atmx2000
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 8:46 am

Sure WN has debt. In fact WN has $1.7 billion in long term debt as of their last quarterly report, and $1.3 billion in liquid assets. That is a $370 million increase in debt, and a $565 million decrease in liquid assets in a year. However, you will see that over the previous 12 months they added $1.4 billion in flight assets. In other words, they added almost as much in flight assets in a year as JetBlue has total. Oh yeah, they also invested in ATA. I think it is fair to say, that WN is doing a good job managing their debt, and is really only using debt to finance capacity expansions and fleet replacement and search out business opportunities.

As for B6 being a "Target," it is more really a function of their new fleet, and the technologies available at the time. By the time WN starts the introduction of the 737NG successor, B6 may have lost the advantages that they gained by being late to the game. However, it won't matter unless they are competing head to head.

Midway may be a "secondary" airport for Chicago, in the sense that it is smaller major airport and is a domestic airport, but it really is irrelevent given that for a large number of people in the greater Chicago area, especially in the south, it is far more accessible.

[Edited 2005-01-24 00:55:35]
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Cactus739
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 8:48 am

DfwRevolution... "and the meek shall inherit the Earth.." I love it...

I don't remember anyone ever mentioning this, but for the first six months of 2004, Southwest was number 1 in domestic enplanements. They carried 39,842,391 people. Not bad for a "second class" carrier. I'm assuming y'all consider United to be a "first class" carrier... they boarded 29,129,969 people domestically. American did better at 36,210,392 domestically. Now don't tell me that these first class carriers carried x number of international passengers. That's comparing apples and oranges.

http://www.bts.gov/press_releases/2004/bts024_04/html/bts024_04.html

That's all I'm going to say in this thread I think. These threads come up every couple of days or weeks, and its always the same people throwing out the exact same opinions. No one is going to win, no one is going to lose.
You can't fix stupid.... - Ron White
 
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STT757
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 8:50 am

Jfernandez, you live in NYC?. Would WN be more of a choice for you if they flew to LGA, EWR, or JFK?..

"NIKV69

I said the wrong thing, I meant smaller airports. Would a first rate carrier say no to DFW? Fly into ISP not JFK? Midway instead of O'Hare? Not fly anywhere but the USA?".

We would then have to lump Jetblue in there because they avoid the World Class Airport that serves Los Angeles (LAX) for a small airport in Long Beach, B6 also avoids the airport in San Francisco for the one in Oakland.

One thing I read which I think is going to be very accurate, eventually 60% of all Domestic travel will be on LCCs (B6, WN, F9, FL etc..). Leaving the surviving legacy carriers to serve key business routes, fortress hubs and International markets.




Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
DfwRevolution
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 9:14 am

As for B6 being a "Target," it is more really a function of their new fleet, and the technologies available at the time.

Actually... I suspect if you take a weighted average of WN's 73G fleet versus B6 A320 fleet, the WN fleet would be younger. Sorry I don't have the time to calculate it exactly, but I did a fermi equation in my head, and WN should have the younger fleet...

I don't consider B6 fleet to be more advanced because it offers IFE. The B6 PTV set-up is very heavy, and has a noticible (downward) impact on the aircraft's performance.

WN has said several times they always keep an eye on IFE options, and this could turn out to be a coup. The FAA is on the verge of certifying airbone wireless products (including WiFi) so by waiting, WN could take advantage of a much more modern, easy to install, lighter, and lower-maintenance IFE solution...
 
zotan
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 9:17 am

B6 would never compete with Southwest. Herb is kind of a role model to Neeleman, and he never wants to compete with him.
 
isitsafenow
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 9:17 am

Southwest is the carrier of choice in MCI, SAT, LAS,and Number two in TPA.
That says alot about a "second rate" carrier doesn't it? I would ask our friends in Chicago look this up. How many people did UA and AA board last year and how many people did Southwest board in the windy city? Im sure Southwest is third but I just want to see the boarding numbers. Also who in Chicago is third...ATA?
I'm also curious about Southwest boardings at LAX. What I am trying to show is this is no second class or second rate company. They are big-league and there are no buts about it. They did shove USAIRWAYS out of sixth place in boardings.
safe
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atmx2000
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 10:47 am

Actually... I suspect if you take a weighted average of WN's 73G fleet versus B6 A320 fleet, the WN fleet would be younger. Sorry I don't have the time to calculate it exactly, but I did a fermi equation in my head, and WN should have the younger fleet...

WN may very well have the younger average fleet age if you restrict to 73Gs, but JetBlue has the advantage of being able to equip their small, young fleet with the same equipment. WN would have a fleet with mixed offerings unless they chose to refit every aircraft.

How much weight does the B6 IFE system add per seat? If lighter options become available, WN would certainly benefit from having held off, especially with current fuel prices.
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ATLhomeCMH
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 11:00 am

This question bugs me at "the get-go" because it doesn't account for the fact that ANY airline taking a passenger away from WN on a comparable route is a competitor...even US.

I would say that the best airline to complete w/ WN right now is FL. Also an extremely profitable and expanding LCC, FL mimics legacies by offering two-class seating and assigned seats, while beginning their IFE installation and still offering low fares. Not bad, if you ask me.
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planespotting
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RE: Can Anyone Compete With Southwest?

Mon Jan 24, 2005 1:37 pm

I wouldn't quantify the WN= Wal Mart statement. Wal Mart doesn't selectively build their stores slowly, they put up a store wherever they see even the slightest profit potential. they are in nearly every rural market here in Iowa that has a population of 5000 or more. I would equate southwest more with Costco actually. Costco builds stores in locations that get a certain number of cars going by per day, in metro areas that probably have to have over a certain population per square mile. Southwest selectively chooses it's market and routes. B6 = Target is more accurate. I don't know who the airline equivalent of Wal Mart is, probably Ryan Air in Europe.
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FRA2DTW
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 7:25 am

Some excellent responses and input so far but how should the legacies respond to WN to check their growth - mostly uncontested to date - and what will the aviation landscape look like as the result of the older carriers having to cope with WN. Looking for armchair CEOs with vision here.
 
EMBQA
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 7:34 am

Herb is kind of a role model to Neeleman, and he never wants to compete with him

Herb retired two years ago....and its business, he'd cut his throat if he had the chance.
"It's not the size of the dog in the fight, but the size of the fight in the dog"
 
1MillionFlyer
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 7:37 am

WN is the number one carrier at BNA with over 4 million of the 8 million total pax last year. They have very very good non-stops from here and trans-con to LAX, SEA, SAN and LAS as well as service to all the east coast cities.

I am flying them 4 segments in the next 6 days even though I prefer DL because the schedules and having a non-stop just trump my DL choices.


I think B6 is a real threat to WN in the next 4 years with the 190's and the 320 growth into more markets. F9 could cause some pain to WN and Airtran is definitely a thorn in their side for east coast- Florida routes.

If the legacies survive the next 2 years in any decent shape they will come back strong as well.

WN is well managed but they are not immune to competition.


Golf Foxtrot you are cleared for departure
 
AeroWesty
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 7:48 am

Some excellent responses and input so far but how should the legacies respond to WN to check their growth

WN is the proverbial 800-lb. gorilla. Even mighty UA went up against WN when they first entered the California market in a big way, throwing up something like 13 daily flights in the OAK-BUR market, for example. That effort lasted a few months.

In the ensuing years, UA has maintained a sizable amount of intrastate traffic on routes WN doesn't fly, and AS has increased market share up and down the west coast multiple times over their presence in the early 90's, even going head-to-head against WN in markets such as PDX-OAK, some would say with a superior product.

The lesson is clear. Don't schedule retaliatory flights against WN, and fly smart. US bought PSA, and then dismantled it. AA bought AirCal, dismantled it, then bought RenoAir, and did it again. They both just gave up and went home, making it much easier for WN to entrench themselves in this market, and now there's a west coast superhub for WN at OAK.

The rest of the United States is welcoming with open arms the relatively low and flexible fares with limited onboard service Californians enjoyed on other carriers for decades.

Cheers.
International Homo of Mystery
 
Byrdluvs747
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 7:50 am


I'd argue BWI, LAS, PHX


 Insane

PHX? WN does not own PHX. They may fly more of their drunk infested flights out of here than HP, but they have less gates and they serve fewer destinations from PHX.
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mtnmanmakalu
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 7:53 am

On their routes, in a word- NO !!!
 Smile
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Boeing757/767
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 7:54 am

Southwest can't compete with AA, NW, DL, CO, UA, etc. on international service. For that reason alone they will never factor into an international business traveler's (high yield) decision.
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SWALoveField
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 8:04 am

WN works for me so I give them all of my business. DFW is too far and too big.

WN won't change the business model and I don't want them too.

My only hope is that the Wright Amendment goes away so I can fly direct to MCI and STL from DAL.

I fly over 100 segments with WN per year and have NO plans on switching to anything else.
 
mtnmanmakalu
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 8:04 am

I agree with you Boeing757/767 on the International service part, however domestically, it is tough to compete with WN on their routes.

As for 1millionflyer's comments about Jetblue being a threat in 4 years, I totally disagree. After spending many years at 3 major Airlines I have learned 1 thing: If you want to compete against WN and come out ahead, you better stick to their business model which B6 has already gone against- 2 A/C types, talking International, etc. We'll see how they are when they are actually making payments on ALL of their A/C and paying for the maintenance too- not to mention wages will rise along with seniority of the Crews.... Keep watching...

mtnman
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1MillionFlyer
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 8:14 am

I think B6 has it right. and they are paying for maint. and have always paid for their airplanes. As long as the CASM for the E190 can be kept under 9 cents I think they have a chance.

Golf Foxtrot you are cleared for departure
 
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EA CO AS
Posts: 13438
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 8:20 am

I agree with the WN = Wal-Mart/B6 = Target analogy.

I'd also say that if any carrier is Costco, it's Alaska Airlines. They manage to compete against the low-cost places and still command a revenue premium, just like Costco does.

In fact, it's the stated goal of AS to be compared not to Nordstrom (as has been the case in years past) but Costco - a place people spend lots of money because they see good value there.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
mtnmanmakalu
Posts: 493
Joined: Sat Nov 06, 2004 1:47 pm

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 8:22 am

I think B6 has it right. and they are paying for maint. and have always paid for their airplanes. As long as the CASM for the E190 can be kept under 9 cents I think they have a chance.

They HAVE NOT always paid for their A/C- maybe when the payments came due after the years of deferment- and they also have warranties on all their A/C as they come new from Airbus. Are you even in the Airline Industry? I don't think so because if you read any of the trades such as Air Transport World, you would know this was common knowledge. Things change A LOT when you have to finally start your deferred payments and your warranty is up- Its just the way it is!!

mtnman
I do, I don't, whatever.......
 
SWAFA30
Posts: 436
Joined: Fri Aug 29, 2003 1:57 am

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 8:23 am

Herb retired two years ago....

Herb Semi-retired. He gave up his CEO and President titles...he remains Chairman of the Board.

[Edited 2005-01-25 00:33:44]
 
willbdsp
Posts: 250
Joined: Thu Sep 09, 2004 6:15 am

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 8:29 am

When will WN announce cities and fares from PIT??
 
SWAFA30
Posts: 436
Joined: Fri Aug 29, 2003 1:57 am

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 8:38 am

When will WN announce cities and fares from PIT??

PHL fares and schedules were announced in mid February 2004 for a May launch. I expect the same for PIT.
 
NWADC9
Posts: 3938
Joined: Tue Jun 01, 2004 12:33 am

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 8:42 am

I hope there's a PIT-MCI route Smile/happy/getting dizzy Smile/happy/getting dizzy Smile/happy/getting dizzy
Flying an aeroplane with only a single propeller to keep you in the air. Can you imagine that? -Capt. Picard
 
N1120A
Posts: 26467
Joined: Sun Dec 14, 2003 5:40 pm

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 8:51 am

>They did shove USAIRWAYS out of sixth place in boardings.<

WN is actually number 1 in domestic flying. Last I saw, they were third overall, though that was for a quarter and not a whole year.

This WN-WalMart thing does not work, at all. First off, WN's philosophy has been to enter a market and build it up for everyone. There has been extensive study on what is called the "Southwest effect" where fares come down and boardings go up, across the board. The fact that other carriers have bad cost structures does not change that. WalMart does everything it can to snuff out any and all competition.
Second, WalMart is horrible to its employees. They pay below the living wage, use sweatshop labor, try to circumvent health insurance laws and crush unions. WN pays at the top of the industry, has great benefits, and is the most unionized of any airline in the US. The reason other airlines cannot compete with WN is because they run routes out of spite, trying to shove others out of a market. WN could use its cash position to charge $150 RT on the LAX-MSY route 5 times a day. They would nail United to the wall. They don't do that and stick to their fare structure, whether they are more or less. That is the reason they are so good. They keep it simple, don't base profits on cargo only and don't piss off those loyal to them (FFs and Employees). Also, they don't ever try to circumvent labor law
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
Silver1SWA
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RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 9:05 am

I don't think that WN will fly to Europe that would go against their business plan and if they started to break away from being the low cost nitch airline they will be just another LCC and will have to same problems as the rest of them. WN has a great business going and they will keep it that way.

People always have a hard time with statements about a codeshare. He was talking about the ATA/WN codeshare opening WN up to new markets. That's not the same as saying WN will start start serving those markets physically.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
ssides
Posts: 3248
Joined: Fri Feb 09, 2001 12:57 am

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 9:05 am

They pay below the living wage,

They follow minimum wage laws in the US, like most small busineses.

use sweatshop labor,

define "sweatshop."

try to circumvent health insurance laws

How so? What laws are you talking about?

crush unions

Wal-Mart has never been unionized. How could it crush a union that never represented its workers?
"Lose" is not spelled with two o's!!!!
 
DfwRevolution
Posts: 8572
Joined: Sat Jan 09, 2010 7:31 pm

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 9:09 am

First off, WN's philosophy has been to enter a market and build it up for everyone. There has been extensive study on what is called the "Southwest effect" where fares come down and boardings go up

WalMart has the exact same effect... they are commonly used as an anchor for other retail, small business or in communities with no retail whatsoever. The greatest WalMart growth today are in suburban/urban areas where the displacement of "Ma and Pa" business are greatly exaggerated. Since when were ToysRus, Drug Emporium, ect "Ma and Pa" business  Big grin

One similarity, for every community boycotting a WalMart center, there's a community begging for one. Ironically like WN's skirmishs with some NIMBYS.
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 9:10 am

N1120a:

I agree with everything you said in your post except one statement:
WN could use its cash position to charge $150 RT on the LAX-MSY route 5 times a day. They would nail United to the wall.

If you look at UA's schedule, their flights in the MSY-LAX market and v.v. are perfectly timed to feed Asian and Australian connections. If you look at UA's schedule between MSY-SFO and v.v., you'll see there's a single flight timed to connect with the Asian flight bank there. There are no other MSY-SFO flights to connect to any of the other SFO flight banks.

I don't think WN would be nailing UA to the wall with a fare war on MSY-California routes, since they are appealing to two different markets entirely.

Cheers.
International Homo of Mystery
 
N1120A
Posts: 26467
Joined: Sun Dec 14, 2003 5:40 pm

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 9:11 am

>They pay below the living wage,
They follow minimum wage laws in the US, like most small busineses.<

I said LIVING wage, and WalMart is not a small business. Actually, small business often pays much more than minimum wage

>use sweatshop labor,
define "sweatshop."<

places where goods are made where the work conditions are substandard

>try to circumvent health insurance laws
How so? What laws are you talking about?<

California and other state laws requiring large companies provide insurance for a certain number of hours worked and doctoring employee schedules to get around it or scheduling just below the minimum. CA has actually passed laws specifically aimed at preventing this practice.

>crush unions
Wal-Mart has never been unionized. How could it crush a union that never represented its workers?<

They crush any union movement within before it comes into effect


Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
Boeing7E7
Posts: 5512
Joined: Sat Jul 31, 2004 9:35 pm

RE: Can Anyone Compete With Southwest?

Tue Jan 25, 2005 9:13 am

They'll do well until the Pacific Southwest is so congested they can't keep a schedule. Then, they are hosed.

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