redflyer
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WN In Denver According To A WSJ Article

Tue Nov 29, 2005 11:56 pm

You need a subscription to view the entire article:

http://online.wsj.com/article/SB1133...85608660.html?mod=home_page_one_us

Some highlights that I found interesting:

But Southwest's days as an industry upstart may be drawing to a close. When it began flying in 1971, it terrorized established carriers with rock-bottom fares made possible by no-frills service and shrewd use of secondary airports. But hard times are driving big changes in the industry. With other airlines slashing costs both inside and outside of bankruptcy court, Southwest is losing its industry lock on low fares.

I've been hearing about WN's decline for over 17 years now since I started following the carrier's rise. This is the first time I've read about it in a reputable publication.

And the fuel-hedge mantra continues....

One of Southwest's main cost advantages over other airlines is likely to melt away over the next few years. When oil prices were low, Southwest shrewdly executed extensive fuel hedges to lock in low prices. For the past 18 months, the benefits have been huge, but they will shrink steadily over the next five years. If oil prices remain high, Southwest won't be able to negotiate new hedges at attractive prices, bringing its fuel costs more in line with other airlines.

But this is interesting...

Frontier and United already have matched the low fares Southwest announced for its flights between Denver and Phoenix, Las Vegas and Chicago, which are scheduled to begin on Jan. 3. With comparable fares, passengers will be choosing between no-frills Southwest and two airlines that unlike Southwest offer assigned seating and premium features such as first-class sections, more legroom and in-flight entertainment.

And people claim there is no such thing as a "Southwest Affect". Nice how Frontier and United have decided (for now) to stop gouging Denver passengers since Southwest is coming to town.
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drerx7
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 12:09 am

I think they are way off base. Save for the DirecTV all the airlines will offer similar frills (or lack there of) on those short segments to PHX/LAS. Besides they are omitting the huge customer base WN has at LAS and PHX and if I'm not mistaken WN has 33" of pitch. F9 and UA are already in a financial pitch. I think they are off target on this article. I think they'll be able to coexist with WN at DEN but the winners here are DEN O&D because they've been reamed for so long.
Third Coast born, means I'm Texas raised
 
CALMSP
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 12:09 am

do we know what gates they will be using??
 
BigGSFO
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 12:23 am

You know every time there is a commentary about WN in the media, the formula is always the same:
1. Here comes Southwest
2. Southwest announces cities and fares
3. The dominant carriers decide to match fares
4. The competitive edges Southwest provides
5. The "Southewest Effect"
6. Everybody finds a way to co-exsist or the dominants adjust their schedule

This article makes it seem that DEN is the first city ever served by WN. I am sure Kelleher is swirling his gin and tonic with a grin on face about all the extra, unpaid media attention.  Smile
 
OPNLguy
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 12:26 am

Quoting BigGSFO (Reply 3):
I am sure Kelleher is swirling his gin and tonic with a grin on face about all the extra, unpaid media attention.

Undoubtedly, except that he'd be drinking Wild Turkey...  Wink
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
socalfive
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 12:31 am

Quoting RedFlyer (Thread starter):
I've been hearing about WN's decline for over 17 years now since I started following the carrier's rise. This is the first time I've read about it in a reputable publication.

There is no such thing as a reputable publication. The media is the media, end of story.
 
redflyer
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 12:35 am

Quoting Socalfive (Reply 5):
There is no such thing as a reputable publication. The media is the media, end of story.

Agreed.
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EA CO AS
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 12:53 am

Quoting RedFlyer (Thread starter):
Nice how Frontier and United have decided (for now) to stop gouging Denver passengers since Southwest is coming to town.

Hogwash.

WN comes to town and they slash fares not out of a feeling of generosity to the traveling public, not because they're charitable and giving, and not out of a moment of lunacy.

It's because they're trying to capture market share from competitors.

Plain and simple. It's designed to stimulate traffic as a new entrant to a market and steal market share in the process.

The folks at DEN haven't been "gouged" or anything like it. Unfortunately, there is this mental image that people get of shackled prisoners being released from the Bastille when WN comes to town, and it's simply not accurate for the most part.
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quickmover
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 12:56 am

"do we know what gates they will be using??"


I read somewhere that USAir would be moving down to the America West gates on the west end of C and Southwest would take the old USAir gates. Now, with ATA pulling out, I wouldn't be surprised if they took that gate too down the road.
 
redflyer
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 1:10 am

Quoting EA CO AS (Reply 7):
The folks at DEN haven't been "gouged" or anything like it.

Really? Every time I flew there the fares charged by United and their retarded off-spring, Ted, were pretty steep (at least on walk-up fares).
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DCA-ROCguy
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 1:55 am

Hogwash. WN comes to town and they slash fares not out of a feeling of generosity to the traveling public, not because they're charitable and giving, and not out of a moment of lunacy.It's because they're trying to capture market share from competitors.Plain and simple. It's designed to stimulate traffic as a new entrant to a market and steal market share in the process.

That's not quite the whole picture. Southwest has typically been on the lower end of cost structures in the industry, and they can make money charging lower fares than network competitors. Although the network carriers have reduced their cost structures since 9/11, there still seems to be enough of a gap that there is a considerable Southwest effect in new markets. The huge increase in enplanements at PHL since WN's entry is a prominent example.

The folks at DEN haven't been "gouged" or anything like it. Unfortunately, there is this mental image that people get of shackled prisoners being released from the Bastille when WN comes to town, and it's simply not accurate for the most part.

In many markets, like Buffalo or Albany, Southwest's arrival is exactly a liberating effect. US Airways gouged Upstate New York mercilessly while they could. The strong increases in enplanements at Upstate airports since Southwest and other LCC's entered starting around 2000 tell the real story.

And again, PHL's massive enplanements increase since WN's entry indicates that there was pent-up demand being stifled by US Airways' hub pricing. The so-called image is a reality.

Denver, however, may not see a such a massive enplanements increase. DEN has an established LCC in Frontier, so travelers probably aren't getting gouged on any route F9 serves. Also, according to many of our A.netters, WN isn't likely to get as many gates in DEN as WN has been able to get in PHL. Denver experts would need to say more.

Jim
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DLKAPA
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 2:06 am

Unless US gives up a gate when they move, WN only has 2 gates available to them: One is empty right now, the other occupied by TZ.
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alphascan
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 2:11 am

Those who cannot learn from history are doomed to repeat it.
George Santayana


You don't have to look back very far to see how well F9 competes with significant new competition at DEN. In February 2004, amid much fanfare, UA launched its Ted product targeting F9 at DEN. The same forecasts came from the analysts and posters on this board. National name, FFP, big vs. small, unique service and connection possibilities would significantly damage F9.

Today, Ted's market share languishes at 6% to 7%, the same as a year ago in spite of added flights and capacity as well as a DEN targeted ad campaign. Much of that share was what UA mainline already had. At the same time, F9 has gained 3% to 4% more market share as UA's overall share diminishes at DEN. Clearly, UA's stated goal for Ted of stopping the loss of market share to LCCs - especially F9 at DEN - has failed.

How has F9 competed so well? They have focused on the DEN originating portion of the DEN O&D traffic. In the high traffic seasons, they hardly compete for the connecting traffic from other cities with their pricing, preferring the high yield DEN O&D traffic. And then, most importantly, there is the flying experience. Look at the trip reports on this site from actual passengers, OA employees included, and you will find 95% are rave reviews.

F9 will hold its own against anyone at DEN. WN will get two gates at DEN and have its hands full keeping them profitable, let alone adding more.
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mariner
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 2:26 am

Quoting RedFlyer (Thread starter):
Nice how Frontier and United have decided (for now) to stop gouging Denver passengers since Southwest is coming to town.

I am just enchanted by the idea of Frontier "gouging" anyone.

If Frontier was gouging, why did United start low fare Ted to compete with Frontier?

cheers

mariner
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StuckInCA
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 2:47 am

Quoting RedFlyer (Thread starter):
With comparable fares, passengers will be choosing between no-frills Southwest and two airlines that unlike Southwest offer assigned seating and premium features such as first-class sections, more legroom and in-flight entertainment.

This sentence really seems to be pushing the limits (of truthfulness). Does United offer more legroom than Southwest (in economy)? United's IFE is basically non-existent (OK... really poor). Frontier has nice IFE, but doesn't it cost $5?

I'm not exactly a WN fanboy, but this really seems like unfair reporting.
 
FlyingTexan
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 2:56 am

Quoting StuckInCA (Reply 14):
United's IFE is basically non-existent

I’ve got to hand one to Untied on this.

Channel 9. The only perk I wish SWA offered.

 Wink
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AZFLYER84
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 3:01 am

Quoting RedFlyer (Thread starter):
Frontier and United already have matched the low fares Southwest announced for its flights between Denver and Phoenix, Las Vegas and Chicago, which are scheduled to begin on Jan. 3

HP/US have also matched fares to DEN.....
 
StuckInCA
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 3:28 am

Quoting FlyingTexan (Reply 15):
I’ve got to hand one to Untied on this.

Channel 9. The only perk I wish SWA offered.

I agree with you on this. Most people on A-net probably agree too.... but I don't think the majority of people really care about channel 9. They'd certainly rather have PTV's.
 
UAPremierGuy
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 3:32 am

Quoting StuckInCA (Reply 14):
This sentence really seems to be pushing the limits (of truthfulness). Does United offer more legroom than Southwest (in economy)? United's IFE is basically non-existent (OK... really poor). Frontier has nice IFE, but doesn't it cost $5?

I'm not exactly a WN fanboy, but this really seems like unfair reporting.

What are you talking about? United does offer more legroom than any other domestic carrier with its Economy Plus section featuring up to 5 more inches of legroom than standard Economy. United's IFE has been repeatedly, and just was again, voted the best among US Domestic carriers. It has some level of IFE, including Channel 9, on ALL of its mainline fleet, with personal seatback videos on 3-class 777's and 767's. Your assertion that United's IFE is "basically non-existent" is patently false.
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StuckInCA
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 3:42 am

Quoting UAPremierGuy (Reply 18):
What are you talking about? United does offer more legroom than any other domestic carrier with its Economy Plus section featuring up to 5 more inches of legroom than standard Economy. United's IFE has been repeatedly, and just was again, voted the best among US Domestic carriers. It has some level of IFE, including Channel 9, on ALL of its mainline fleet, with personal seatback videos on 3-class 777's and 767's. Your assertion that United's IFE is "basically non-existent" is patently false.

I'm not trying to start an anti-United war. Don't get excited. I'm only stating that I think the way this is written implies that if you travel on United or Frontier you WILL get more legroom AND IFE.

Fine. More room in economy plus. For everyone else in economy is it not LESS legroom than WN?

IMHO, United's IFE is bad. For domestic flights, especially on routes which compete with WN, I NEVER find myself on a 3-class 777 or 767. Thus, I end up with channel 9 (which is great... but see my previous post) and some canned programming on screens hanging over the aisle. I'm only stating that FOR ME it's really no better than the IFE on WN (none). That said, on domestic flights, IFE is a non-factor to me.
 
alphascan
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 3:48 am

Quoting StuckInCA (Reply 14):
Quoting RedFlyer (Thread starter):
With comparable fares, passengers will be choosing between no-frills Southwest and two airlines that unlike Southwest offer assigned seating and premium features such as first-class sections, more legroom and in-flight entertainment.

This sentence really seems to be pushing the limits (of truthfulness). Does United offer more legroom than Southwest (in economy)? United's IFE is basically non-existent (OK... really poor). Frontier has nice IFE, but doesn't it cost $5?

The answer to your first question answer is yes.......and no. It depends on where the passenger is seated. UA elite FFs are automatically seated in Economy Plus which boasts a roomy 36" seat pitch. Remaining seats go to other MP members and those lucky enough to get them at the airport. There was some word recently that UA would begin to sell these preferred seats at a premium. Economy Plus seats on Ted flights (the only nonstop routes WN is competeing on out of DEN are exclusively TED) number 66 while the remaining 90 or so are the cramped legacy standard 31" seat pitch. F9 offers a 33" seat pitch throughout its Airbi fleet.

Ted flights also feature both audio and video IFE however the video product does not feature LIVE TV as offered by F9. Sean Donohue of UA, Ted's Godfather, was quoted recently as saying IFE is becoming less important because "most" people bring their own entertainment on board such as I-Pods. Either he spends too much time in his office on Algonquin Blvd or its just a sour grapes response to those carriers who compete with a superior IFE offering, IMO.

Yes, F9 charges $5 for their IFE system. And the point remains that it is available vs. NO CHOICE on WN.
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alphascan
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 4:01 am

Additionally, neither Ted or F9 compete with first class sections on any of the routes mentioned. That statement in the article not only pushes the limits of truthfulness, its just wrong.



Quoting UAPremierGuy (Reply 18):
It has some level of IFE, including Channel 9, on ALL of its mainline fleet, with personal seatback videos on 3-class 777's and 767's.

The subject does not include UA mainline and you'll be hard-pressed to find a 777 or 767 in Ted livery.
"To he who only has a hammer in his toolbelt, every problem looks like a nail."
 
redflyer
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 5:38 am

Quoting Mariner (Reply 13):
am just enchanted by the idea of Frontier "gouging" anyone.

If Frontier was gouging, why did United start low fare Ted to compete with Frontier?

Ok, Mariner, I agree F9 is not "gouging" anyone. And, in fact, after I posted that comment I realized I'd hear from you since you've made complimentary remarks about F9 in past posts and seem to follow them closely. However, don't you find it interesting that F9 has managed to lower their fares since WN's announcement? And that, to me, is the beauty of "The Southwest Affect"...even existing LCC's are forced to lower prices in order to stay competitive.
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UAPremierGuy
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 7:48 am

Quoting Alphascan (Reply 20):
Sean Donohue of UA, Ted's Godfather, was quoted recently as saying IFE is becoming less important because "most" people bring their own entertainment on board such as I-Pods. Either he spends too much time in his office on Algonquin Blvd or its just a sour grapes response to those carriers who compete with a superior IFE offering, IMO.

I agree with you. Donohue made those comments in response to the new E170 service out of IAD (Ex-Plus) meant to compete with Indy Air. I completely disagree this assertion. There should be IFE on all flights, especially on those cramped RJs.

And to those who pointed it out, the article was incorrect. There is no first class service by Ted or F9 on these routes, however America West does offer first class (albeit not so great) on routes out of DEN to PHX and LAS. But then, they don't have IFE either...so it's a toss-up all around.
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FlyingTexan
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 9:49 am

I should have said Channel 9 ~ to listen to your delay on!

Quoting StuckInCA (Reply 17):
but I don't think the majority of people really care about channel 9. They'd certainly rather have PTV's.

If Ch. 9 vs. PTV.

Yea, I’d say PTV. But keep in mind many really enjoy Ch. 9 and it is significantly cheaper vs. PTV in each and every seatback.
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mariner
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 10:11 am

Quoting RedFlyer (Reply 22):
However, don't you find it interesting that F9 has managed to lower their fares since WN's announcement?

There is no question that there is a "Southwest Effect" - or has been - in some cities. PHL, for example, or BWI.

But - as far as I can remember - this is the first time Southwest has gone into a city that is hub for a fully functioning LCC, and Denver has had the Effect without the Southwest part.

When America West adopted the Low Fare Intiative (when they became LCC) fares on DEN/PHX and DEN/LAS dropped through the floor.

When Ted began, they were offering $59 round trips DEN/ONT. It was an express route (CRJ) for Frontier and they simply pulled out and the fares shot right back up.

When Frontier started LAX/MSP, NW dropped their fares to $99 round trip, and added flights DEN/LAX for less than that.

When Frontier dropped LAX/MSP, the fares shot back up and NW dropped DEN/LAX.

And there is the classic that I have mentioned many times of NW - and thus everyone - offering DEN/MSP for $120 round trip.

These are all mostly lower than Southwest. So Denver's already had it with the Ted Effect and the Northwest Effect.

Not to mention the ATA Effect, or even the AWA Effect.

What Southwest brings with it, of course, is that remarkable reputation for low fares when not all of Southwest's fares are that low.

 Smile

cheers

mariner
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Tornado82
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 10:37 am

Quoting RedFlyer (Thread starter):
Nice how Frontier and United have decided (for now) to stop gouging Denver passengers since Southwest is coming to town.

Gouging Denver passengers, eh? Lately we've had at my work a subcontractor from DEN coming in weekly. The fares he pays are less than what I pay to fly the 1/3-distance trip to IND. Likewise, my girlfriend went to DEN for a conference 2 weeks ago from IND... once again the fares were cheaper IND-DEN than I paid the same exact day of purchase/day of travel for ABE-IND. Nobody's getting gouged in DEN. Frontier kept it competitive for a long time now.

Quoting StuckInCA (Reply 17):
but I don't think the majority of people really care about channel 9.

But they do care about Channels 1-8, which is alot more entertaining than playing race the toilet paper from row 1 to row 24 (or whatever) of the 737 on WN. And that PTV is even MORE entertaining than UA's audio. And the last time I flew UA, I got the whole can of pop, or soda, depending on your geographical preference... and was then offered seconds later in the flight. Frontier would also give you the cookies, or the wrap, depending on your distance.

This may have been the first mistake for WN. DEN is an expensive airport to operate from which makes them look possibly hypocritical in their Wright arguments but more importantly is an airport which already had low fares from an LCC... an LCC with better service, hometown loyalty/FF base, and significantly more cities direct than WN. I think there were more low hanging fruits to pick than DEN.
 
arffguy
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 10:44 am

Quoting Mariner (Reply 25):
What Southwest brings with it, of course, is that remarkable reputation for low fares when not all of Southwest's fares are that low.

Yes, because it depends on when you book, when you fly and how many stops you want to make. I have been telling my friends and family this all along. Some of them assume that SWA is always the lowest fare.
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stuckinMAF
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RE: WN In Denver According To A WSJ Article

Wed Nov 30, 2005 12:28 pm

Quoting RedFlyer (Thread starter):
Nice how Frontier and United have decided (for now) to stop gouging Denver passengers since Southwest is coming to town.

 checkmark 

Quoting EA CO AS (Reply 7):
The folks at DEN haven't been "gouged" or anything like it.

Make no mistake, DEN has been a CASH COW for F9, but especially for United for a long time. They'll be looking back at the last few years as "the good ole days" pretty soon!

Quoting UAPremierGuy (Reply 18):
What are you talking about? United does offer more legroom than any other domestic carrier with its Economy Plus section featuring up to 5 more inches of legroom than standard Economy. United's IFE has been repeatedly, and just was again, voted the best among US Domestic carriers. It has some level of IFE, including Channel 9, on ALL of its mainline fleet, with personal seatback videos on 3-class 777's and 767's. Your assertion that United's IFE is "basically non-existent" is patently false.

I haven't needed toys to keep me occupied since I was about 5 years old. IFE doesn't mean squat to me and everyone I know that flies! If you want to watch TV, there will be plenty of time (and it's a lot cheaper) to do that in your own living room.

Legroom? Unless you're going to be sitting there for more than 3 or 4 hours, really doesn't matter to me and those I know, and I'm a BIG guy! I don't board a plane expecting to have room to do gymnastics!
"A fear of weapons is a sign of retarded sexual and emotional maturity" -Sigmund Freud
 
LoneStarMike
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RE: WN In Denver According To A WSJ Article

Thu Dec 01, 2005 10:22 am

For anyone wishing to read the entire article (it's interesting and quite lengthy) it was been reprinted on CAA Airport News and can be read for free.

Southwest's low-cost model sees threat

Here's what I think might happen. I think passengers living in Denver will continue to fly UA and F9. Most people would want to stick with their FF program if the price is the same, and for Denverites, UA and F9 are the hometown airlines.

But passengers living in PHX, LAS and MDW - all large Southwest cities with a loyal customer base - who may have flown UA or FP in the past to get to DEN will probably now fly WN. Many WN passengers in other cities who can now have a one-stop connection through MDW, PHX, or LAS to DEN, will also probably go with WN, while others will continue to fly F9 and UA for the convenience of a nonstop.

I don't think WN is going to go ape hog wild at DEN like they have at PHL or MDW. I think it might wind up being like DTW, which for years only had around 20 daily departures to three cities. I could see HOU being added and if Wright ever gets repealed, you'd probably also see flights to DAL.

LoneStarMike

 
Tornado82
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RE: WN In Denver According To A WSJ Article

Thu Dec 01, 2005 11:04 am

Quoting LoneStarMike (Reply 29):
Here's what I think might happen. I think passengers living in Denver will continue to fly UA and F9. Most people would want to stick with their FF program if the price is the same, and for Denverites, UA and F9 are the hometown airlines.

But passengers living in PHX, LAS and MDW - all large Southwest cities with a loyal customer base - who may have flown UA or FP in the past to get to DEN will probably now fly WN. Many WN passengers in other cities who can now have a one-stop connection through MDW, PHX, or LAS to DEN, will also probably go with WN, while others will continue to fly F9 and UA for the convenience of a nonstop.

Agreed, and the most level headed post I've seen on this. It was even said once (by Herb maybe) that WN is opening this market at the request and for the benefit of existing WN pax. I just don't see what WN could offer to woo pax off of F9's local pax base especially. I might like the 737's vs the A319s, but it's not like it's a 737 vs a CRJ-200 here... I'll take the better in-flight service any day if the prices are nearly comparable... and DEN fares are already good... so if I was an established F9 customer there wouldn't be a question about it, and even now if I can fly direct to dozens of cities on F9... I'm stickin to it.
 
redflyer
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RE: WN In Denver According To A WSJ Article

Thu Dec 01, 2005 11:45 am

Quoting UAPremierGuy (Reply 18):
United does offer more legroom than any other domestic carrier with its Economy Plus section featuring up to 5 more inches of legroom than standard Economy.

This comment was already addressed by another poster but I'll address it again: the operative word is "SECTION". Meaning the typical "Joe" will not see the additional 5 inches of legroom.

Quoting LoneStarMike (Reply 29):
But passengers living in PHX, LAS and MDW



Quoting Tornado82 (Reply 30):
It was even said once (by Herb maybe) that WN is opening this market at the request and for the benefit of existing WN pax.

Ding! I'm a Phoenix boy and I fly to DEN about five or six times a year on business and the lack of DEN service has been a huge gap in WN's network.
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ScottB
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RE: WN In Denver According To A WSJ Article

Thu Dec 01, 2005 12:05 pm

Quoting Mariner (Reply 25):
When America West adopted the Low Fare Intiative (when they became LCC) fares on DEN/PHX and DEN/LAS dropped through the floor.

Not really. Market average DEN-PHX fares dropped by 12% year-over-year (2001Q2 vs. 2002Q2) and DEN-LAS fares dropped by 4% year-over-year in the same quarters. HP's average DEN-LAS fare actually went up 30%. America West announced their new fare structure in late March, 2002. It's also difficult to say if the decrease in fares was due more to deep discounting in the post-9/11 recessionary environment or HP's "LCC" strategy.

Fares have continued to trend downward on these routes, but it's difficult to say if this is due to a so-called LCC strategy or just increased competition. Still, the average fares in these two markets as of 2005Q1 were still 20-40% higher than most non-stop WN routes of similar length. The average DEN-PHX fare was $158, as compared to WN's average PHX-OAK fare of $113.

Southwest's strength will be its customer bases at PHX, LAS, and MDW, just as Frontier and United can count on their loyal customers in DEN. Don't doubt, however, that the established players will feel pressure on their yields on competitive routes.

Southwest is more than willing to stick it out in new markets until they build a presence. And I would imagine than DEN has been one of the most-requested destinations for Southwest's customer base.
 
redflyer
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RE: WN In Denver According To A WSJ Article

Thu Dec 01, 2005 12:12 pm

Good post, ScottB...

Quoting ScottB (Reply 32):
The average DEN-PHX fare was $158, as compared to WN's average PHX-OAK fare of $113.

But this wasn't the best example to use given that OAK has two competing airports; SFO and SJC.

Quoting ScottB (Reply 32):
And I would imagine than DEN has been one of the most-requested destinations for Southwest's customer base.

Exactly since I fly WN often and have always wondered why DEN was never on their route structure.
My other home is a Piper Cherokee 180C
 
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mariner
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RE: WN In Denver According To A WSJ Article

Thu Dec 01, 2005 12:58 pm

Quoting ScottB (Reply 32):
Not really. Market average DEN-PHX fares dropped by 12% year-over-year (2001Q2 vs. 2002Q2) and DEN-LAS fares dropped by 4% year-over-year in the same quarters.

Sorry, but when AWA adopted the Low Fare Initiative, fares from PHX and LAS to DEN dropped through the floor. They may have been promotional fares, but many of Southwest's "introductory fares" are promotional too.

Quoting ScottB (Reply 32):
Don't doubt, however, that the established players will feel pressure on their yields on competitive routes.

No one is doubting that. Or - no one that I know.

Quoting RedFlyer (Reply 33):
and have always wondered why DEN was never on their route structure.

Southwest used to serve Denver - Stapleton. When they left, Mr. Kelleher swore that pigs would fly before Southwest returned to Denver.

But Mr Kelly is in charge now.

cheers

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redflyer
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RE: WN In Denver According To A WSJ Article

Thu Dec 01, 2005 1:13 pm

Quoting Mariner (Reply 34):
When they left, Mr. Kelleher swore that pigs would fly before Southwest returned to Denver.

I could've sworn I saw a flying pig the other day but my wife says it was just a holiday turkey fleeing the butcher's axe.
My other home is a Piper Cherokee 180C
 
JayinKitsap
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RE: WN In Denver According To A WSJ Article

Thu Dec 01, 2005 1:37 pm

From Seattle, my preferred airlines are Alaska, Frontier, and Southwest. Yes I think Frontier will easily hold their own vs WN, but UA/Ted will be affected most. No F9 and WN don't always have the cheapest fares for a given flight, but I have yet been faced with an outrageous fare from either of them.

I'm glad to see WN starting DEN, the F9-WN competition will be good for both of them.

I like F9's IFE, yes it is $5 but it is a known commodity. F9's fare was usually many fold cheaper than the alternate, so just add it in when comparing before buying.
 
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RE: WN In Denver According To A WSJ Article

Thu Dec 01, 2005 5:14 pm

Quoting Mariner (Reply 34):
Sorry, but when AWA adopted the Low Fare Initiative, fares from PHX and LAS to DEN dropped through the floor.

Sorry, but DOT's fare data simply do not support this statement. AWA's average fare between DEN and LAS increased year-over-year in the quarter following their announcement of the change in their pricing strategy. Go look up the archival numbers yourself. "Through the floor" to me is dropping fares by 25%, 50%, or more. 12% is nice, but it's not clear that the recession and post-9/11 aversion to air travel didn't have more of an effect than AWA's announcement in these two markets specifically.
 
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RE: WN In Denver According To A WSJ Article

Thu Dec 01, 2005 6:56 pm

Quoting ScottB (Reply 37):
Sorry, but DOT's fare data simply do not support this statement.

Sorry, again, but I was there. It was a source of considerable consternation to a group of us who had shares in Frontier - especially coming at the time that it did, six months after 9/11, before there were too many hints of recovery and before the disastrous summer of '02.

I should point that I am not talking about average fares for the month or the year.

I am talking about the promotional fares used to advertize the new initatiative. This is the springboard of my posts in response to:

Quoting RedFlyer (Reply 22):
However, don't you find it interesting that F9 has managed to lower their fares since WN's announcement?

I cannot say if Frontier has matched across the entire range of fares - I assume they would, has Redlfyer checked every fare? But the hoo-haa in Denver is because both United and Frontier have matched the the Southwest "introductory fares".

It even attracted an editorial in a Denver paper, but the fares they nominated as proof of The Southwest Effect were those introductory fares.

They are not the only fares that Southwest charges, and, like Ryanair's €1 fares throughout their system, I doubt they are the fares on which an airline makes money. Nor does the DOT - to my knowledge - record them, although I assume they become an element of the "average".

But as such, I stand by my statement that Denver has had the Southwest Effect before, however temporarily.

And in some cases, not temporarily.

The "Northwest Effect" continues on DEN/MSP, a route which Southwest has not announced. I just checked and I can still get a round trip on several days next week for $120 - on some days less.

In the case of Ted, the "introductory" fares - which came soem time after the introduction - for DEN/ONT lasted so long that Frontier, who were flying high CASM RJ's on the route, simply threw in the towel.

Immediately Frontier did so, of course, the fares shot straight back up.

mariner
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redflyer
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RE: WN In Denver According To A WSJ Article

Fri Dec 02, 2005 2:02 am

Quoting Mariner (Reply 38):
has Redlfyer checked every fare?

No, I haven't. But your point is well taken. I think we'll need to revisit this issue in about three or four months time and see where the DEN players are at that point with regards to pricing and, most important of all, profitability.
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Tornado82
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RE: WN In Denver According To A WSJ Article

Fri Dec 02, 2005 2:47 am

Quoting RedFlyer (Reply 35):
I could've sworn I saw a flying pig the other day

It was just an A380 doing tests.  duck 
 
CO767FA
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RE: WN In Denver According To A WSJ Article

Fri Dec 02, 2005 3:23 am

WN will draw people based on their instinct to be followers (lemmings), rather than doing their homework. Once they realize that all other factors (price and schedule) are even for WN, F9 and UA, they will then look toward FF programs, employee attitude, on-time performance and IFE.

In the end, when the music stops, it will be the carrier who has the best resource/revenue management (WN and UA) to weather the battle; hence, the announcement earlier this week by F9 that it is facing a possible cash crunch. The LCC edge is beginning to weaken and a shake-out is underway for both traditional and non-traditional carriers.

Also, DIA is a very costly airport to operate from (someone has to pay the building/operational costs) and F9 has been trying to find footing in another location, but being "land" locked, it will have the toughest time absorbing the lower fares the competition is bringing.

The next worse scenario is if WN make DEN a bigger part of their overall operations (remember the old days of the Frontier, Continental and United hubs).
 
ScottB
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RE: WN In Denver According To A WSJ Article

Fri Dec 02, 2005 3:27 am

Quoting Mariner (Reply 38):
I am talking about the promotional fares used to advertize the new initatiative.

Then you ought to be more precise and state "promotional fares on DEN/PHX and DEN/LAS dropped through the floor." When you don't qualify your statement, it is inaccurate.

And, in any case, I've been looking at Frontier's sale fares as announced in 2002. As background, AWA announced their simplified everyday fare structure on March 25, 2002. In January and February of that year, F9 offered DEN-LAS fares of $109 and $89 each way, respectively. DEN-LAS was $92 in the sale announced on March 20. In April and June, DEN-LAS was $99. The least expensive DEN-LAS fare I could find was $63 each way for the Colorado's 126th Birthday Sale, but the fare of $98 each way to PHX in the same sale was consistent with prior sales. The promo fares in late 2002 were comparable to fares in early 2001.

America West's historical promotional fare info is more limited, but the promotional fares will factor into the average fares, since DOT's data is based on what the airlines report.

When people (like DOT) speak of the "Southwest Effect," it is precisely the effect on average fares in the market that is the focus. Traffic increased on PHL-MHT from 2004Q1 to 2005Q1 by 1010% because the average fare fell by over 80%. Even a market that already had low-fare competition, PHL-MCO, increased by over 1100 daily passengers (about 50%) when average fares fell by about 15%; PHL-TPA saw an increase in traffic of about 45% with a decrease in average fare of about 20%.

Promotional fares are not the real focus of the Southwest Effect, nor are they going to be the true measure of Southwest's impact on UA, F9, and (less so) US/HP in the DEN market. The broader impact will come from the lower unrestricted fares which are Southwest's bread-and-butter. It will be more difficult to get people to buy $296.20 DEN-PHX tickets when Southwest's maximum price is $189.20.
 
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RE: WN In Denver According To A WSJ Article

Fri Dec 02, 2005 3:39 am

Quoting EA CO AS (Reply 7):
The folks at DEN haven't been "gouged" or anything like it.

Nope.

You want to see gouged? Fly to/from COS.

N
 
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mariner
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RE: WN In Denver According To A WSJ Article

Fri Dec 02, 2005 4:13 am

Quoting ScottB (Reply 42):
Then you ought to be more precise and state "promotional fares on DEN/PHX and DEN/LAS dropped through the floor." When you don't qualify your statement, it is inaccurate.

I am sorry, but you bought into a debate I was having with RedFlyer about United and Frontier having dropped fares to match Southwest:

Quoting RedFlyer (Reply 22):
However, don't you find it interesting that F9 has managed to lower their fares since WN's announcement?

Please explain to me how we could be discussing anything other than "promotional fares" since no one - not even those with access to Southwest's yield management programs - can know what the average fare will be.

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