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drerx7
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WN Looking At International From HOU

Fri Jan 27, 2012 3:06 am

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RE: WN Looking At International From HOU

Fri Jan 27, 2012 6:31 am

I'm sure WN will do some arm twisting to get FIS facilities at HOU. They can easily build some FIS gates at the terminal at HOU. They have space to build another concourse that will handle international flights. I wonder if Volaris or Interjet would be interested in starting flights at HOU if it does get FIS for commercial flights. Or Viva moving from IAH over to HOU.

Possible international routes WN/FL are probably looking to add from HOU are the same as in SAT, CUN and MEX. Houston-Mexico City is only flown by AM and UA. Houston-CUN only has UA.
 
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RE: WN Looking At International From HOU

Fri Jan 27, 2012 1:20 pm

Quoting drerx7 (Thread starter):
I wonder what UA's response will be...

Why anything?
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RE: WN Looking At International From HOU

Fri Jan 27, 2012 1:46 pm

Not surprising at all. It shouldn't be a big ordeal to get FIS into HOU, but it will probably be a few years before any such facility would be available for WN and other possible tenants (like Mexican LCCs). In the meantime WN will have to route int'l traffic via nearby AUS and SAT, perhaps even MSY.
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RE: WN Looking At International From HOU

Fri Jan 27, 2012 2:02 pm

Quoting Cubsrule (Reply 2):
Why anything?

Historically down here its been a gentleman's agreement between CO and WN - sort of a "stay on your side of town, we will stay on ours" deal. UA's IAH hub is lucrative and a fortress, as we all know; and with WN attempting to set up an international operation that will lower costs on their monopoly routes...   
I suppose they could just stand by and watch their market share decrease to some of those south of the border destinations.
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RE: WN Looking At International From HOU

Fri Jan 27, 2012 2:08 pm

Quoting drerx7 (Reply 4):
Historically down here its been a gentleman's agreement between CO and WN - sort of a "stay on your side of town, we will stay on ours" deal. UA's IAH hub is lucrative and a fortress, as we all know; and with WN attempting to set up an international operation that will lower costs on their monopoly routes...

I don't recall UA doing much of anything in "retaliation" for TZ's fairly robust international service from MDW, though.
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RE: WN Looking At International From HOU

Fri Jan 27, 2012 2:10 pm

Quoting Cubsrule (Reply 5):
on't recall UA doing much of anything in "retaliation" for TZ's fairly robust international service from MDW, though.

On what international routes did they compete though?
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RE: WN Looking At International From HOU

Fri Jan 27, 2012 2:12 pm

Quoting STT757 (Reply 6):
On what international routes did they compete though?

A handful of cities in Mexico as well as SJU and STT (if you want to count those as international - let's not have that debate here). I can't recall whether TZ did LIR.
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RE: WN Looking At International From HOU

Fri Jan 27, 2012 2:16 pm

This is bigger than you thinks folks....WN wants into C. and northern S. America badly....but it has to be from a Central Gulf Coast position to maximize connections and stage lengths
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RE: WN Looking At International From HOU

Fri Jan 27, 2012 2:25 pm

Quoting Cubsrule (Reply 7):
A handful of cities in Mexico as well as SJU and STT (if you want to count those as international - let's not have that debate here). I can't recall whether TZ did LIR.

I don't remember much except perhaps CUN and MEX from UA from ORD, maybe SJU and STT on the same plane on Saturdays. The new UA with CO's network is much more focused on Mexico and Central America than UA ever was previously.
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RE: WN Looking At International From HOU

Fri Jan 27, 2012 11:55 pm

Quoting yellowtail (Reply 8):
This is bigger than you thinks folks....WN wants into C. and northern S. America badly

They seem to be talking only about Mexico, not South America or Central America.
 
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RE: WN Looking At International From HOU

Sat Jan 28, 2012 1:09 am

Quoting Cubsrule (Reply 7):
A handful of cities in Mexico as well as SJU and STT (if you want to count those as international - let's not have that debate here). I can't recall whether TZ did LIR.
Quoting Cubsrule (Reply 5):
I don't recall UA doing much of anything in "retaliation" for TZ's fairly robust international service from MDW, though.

I didn't think their service was 'robust' enough to illicit a response from anybody. Even if every TZ flight went out full, it wouldn't amount to a 10th of the UA flyer base in Chicago. I don't even think TZ service was daily?
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RE: WN Looking At International From HOU

Sat Jan 28, 2012 11:35 am

Quoting Cubsrule (Reply 5):
I don't recall UA doing much of anything in "retaliation" for TZ's fairly robust international service from MDW, though.

TZ never had the name and brand recognition WN has, not to mention its loyalty base. For another thing, UA has a lot of competition from Chicago anyway, and therefore probably isn't as lucrative as IAH, where they are without doubt the dominant force.

Because CO and now UA has had little to no competition on these routes for years, they've been able to name their prices. In Chicago, it's more than likely that any routes TZ ran, UA and AA also ran, if not other carriers. Now that their extensive, very profitable and successful Central/South American route network is in danger of competition from the dominant force across town at HOU, they have good reason to be worried, because WN will flood the market and undercut their prices.

In most other situations, UA couldn't object because they had nothing to object, like your example with TZ. In this case, it would require opening an FIS facility at HOU, which is an airport that has long been intended to be a national airport only -- IAH was built for the very purpose of replacing HOU, but once it reopened, IAH was still the international airport. So, if UA objects (which I'm guessing they will), they at least have a basis for the challenge.
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RE: WN Looking At International From HOU

Sat Jan 28, 2012 12:36 pm

Quoting reality (Reply 10):
They seem to be talking only about Mexico, not South America or Central America.

Not true. They are actively doing the groundwork on several C. and Northern South American destinations right now.

City pairs like HOU-SAL have the potential to be huge profit centers for WN, especially if you count the connecting traffic they can generate.
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RE: WN Looking At International From HOU

Sat Jan 28, 2012 12:58 pm

I could see UA attempting to leverage service at IAH against the City of Houston and H.A.S. to prevent an FIS from being opened at HOU. Hopefully, they will just fortify ops vs the political route.
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RE: WN Looking At International From HOU

Sat Jan 28, 2012 5:45 pm

According to HOU Master Plan, HOU could build FIS. Here's the quote I got from the brochure:

"Could also include a new FIS facility, if international flights be initiated"

You'll find this information on bottom part of first page (Under Terminal) at:

http://system.gocampaign.com/files/file.asp?f=11429

Read more detail of airport master plans, go to: http://www.fly2houston.com/about-master-plans
 
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RE: WN Looking At International From HOU

Sat Jan 28, 2012 7:09 pm

Quoting atcsundevil (Reply 12):
because WN will flood the market and undercut their prices.

Which markets will WN "flood" (i.e. offer many times the capacity that CO dies)? It's not like they are going to go triple daily to BJX or QRO.

Quoting atcsundevil (Reply 12):
So, if UA objects (which I'm guessing they will), they at least have a basis for the challenge.

. . . except that the exact same was true at MDW when MDW got the new FIS and UA didn't say a word.
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RE: WN Looking At International From HOU

Sat Jan 28, 2012 7:24 pm

Quoting yellowtail (Reply 8):
This is bigger than you thinks folks....WN wants into C. and northern S. America badly....but it has to be from a Central Gulf Coast position to maximize connections and stage lengths

Central America would be easily served through the Gulf Coast like you said but Northern South American cities such as BOG, PTY (not really but it's still pretty far), CCS (assuming they get rights), MDE and even GYE, CLO, MAO, and other Northern South American cities would be reached much easier from Florida. If WN wants those markets where they get the right O&D and connecting traffic mix, FLL and MCO are their best bets.
 
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RE: WN Looking At International From HOU

Sat Jan 28, 2012 11:03 pm

Quoting Cubsrule (Reply 16):
Which markets will WN "flood" (i.e. offer many times the capacity that CO dies)? It's not like they are going to go triple daily to BJX or QRO.

I'm talking about markets UA currently runs 1-2 daily 737s and has no competition. If WN also goes 1-2 daily, then there's 100% more seats running the route and no doubt at much deeper discounts. I believe that's the definition of flooding the market. Not only that, WN is known for going into markets very strong -- they never start with a weak presence.

Quoting Cubsrule (Reply 16):
except that the exact same was true at MDW when MDW got the new FIS and UA didn't say a word.

But again, UA would have likely had direct competition from AA at ORD. TZ running a once daily from a different airport was of far less concern than ORD because AA is their direct competitor in the Chicago market. Well, WN is UA's direct competitor in the Houston market. HOU was closed and moved to IAH for the explicit purpose of moving to an airport that could handle the large amount of traffic. HOU reopened to domestic flights because of its convenience to Houston, but opening a FIS is completely redundant. LGA could very easily have FIS and run international flights, but that's why JFK and EWR exist...also why IAH exists.
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RE: WN Looking At International From HOU

Sat Jan 28, 2012 11:11 pm

Quoting atcsundevil (Reply 18):
LGA could very easily have FIS and run international flights, but that's why JFK and EWR exist...also why IAH exists.

. . . also why ORD exists. What's different?

Quoting atcsundevil (Reply 18):
I'm talking about markets UA currently runs 1-2 daily 737s and has no competition.

That's a pretty small group. Which cities, specifically, are you thinking of?
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 1:54 am

Quoting Cubsrule (Reply 19):
That's a pretty small group. Which cities, specifically, are you thinking of?

lets see in Mexico and C. America (and using avg freq)...CZM, MID, GUA, BZE, RTB, SAP, TGU, MGA, SAL, and a few others..you add some other IAH-Caribbean destinations to that list...GCM, MBJ, AUA, BON, CUR, POS...you have quite an impact
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 2:14 am

Quoting yellowtail (Reply 20):
lets see in Mexico and C. America (and using avg freq)...CZM, MID, GUA, BZE, RTB, SAP, TGU, MGA, SAL, and a few others..

You really see WN in TGU or BZE?

By the way, I think TA flies IAH-RTB (but it may be seasonal).
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 2:19 am

Quoting yellowtail (Reply 20):
lets see in Mexico and C. America (and using avg freq)...CZM, MID, GUA, BZE, RTB, SAP, TGU, MGA, SAL, and a few others..you add some other IAH-Caribbean destinations to that list...GCM, MBJ, AUA, BON, CUR, POS...you have quite an impact

Your idea of what WN will end up with assuming they can fly internationally from HOU is quite grandiose. I dont see that at all.

Whats more realistic is a few major cities in Mexico and the Caribbean.
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 2:44 am

Quoting yellowtail (Reply 20):
lets see in Mexico and C. America (and using avg freq)...CZM, MID, GUA, BZE, RTB, SAP, TGU, MGA, SAL, and a few others..you add some other IAH-Caribbean destinations to that list...GCM, MBJ, AUA, BON, CUR, POS...you have quite an impact

Well....while these may seem far fetched today, 10 years from now, I could arguably see WN in a fair number of these destinations. Ten years ago, no one ever thought WN would fly to LGA, EWR, BOS or fly to international destinations.

WN already carries the most domestic passengers of any carrier, so they have a good base to draw from to support many of these Central American / Caribbean destinations. Furthermore, many of these destinations focus on tourists or are VFR destinations (which is WN's bread and butter).

[Edited 2012-01-28 18:46:50]
 
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 3:45 am

Quoting EricR (Reply 23):
Furthermore, many of these destinations focus on tourists or are VFR destinations (which is WN's bread and butter).

How is VFR "WN's bread and butter?" For that matter, on what do you base the assertion that tourists are WN's bread and butter?
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 4:11 am

Quoting Cubsrule (Reply 24):

WN grew by bringing affordable fares to the average person. They did not grow to where they are due to business travelers (though they have been getting a larger share of the business market over the past few years). As a side note, VFR need not be limited to international flights.
 
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 4:38 am

Quoting atcsundevil (Reply 18):
HOU was closed and moved to IAH for the explicit purpose of moving to an airport that could handle the large amount of traffic. HOU reopened to domestic flights because of its convenience to Houston, but opening a FIS is completely redundant.

And you're basically rehashing the reasons why ORD replaced MDW as Chicago's primary airport. One could easily argue that the FIS at MDW is "completely redundant" for the same reason, and that this would also be true at SNA, OAK, or FLL.

Quoting drerx7 (Reply 14):
I could see UA attempting to leverage service at IAH against the City of Houston and H.A.S. to prevent an FIS from being opened at HOU. Hopefully, they will just fortify ops vs the political route.

Perhaps, but moving the corporate HQ from Houston almost certainly lost them political capital with the City. And threats to reduce service at IAH are somewhat hollow given the strong local market, relatively low costs, and long-term leases on facilities. IAH is the best hub for serving Mexico from the U.S. and it is very well-situated to capture traffic to Central & South America. And the oil industry provides a substantial flow of international premium traffic.

Quoting EricR (Reply 25):
WN grew by bringing affordable fares to the average person. They did not grow to where they are due to business travelers

That's simply not true. They weren't flying 30+ times per day between DAL & HOU for the benefit of leisure passengers. ABQ-PHX or BOI-OAK or OMA-DEN or CLE-MDW aren't flown for the leisure traffic. Southwest's marketing in the '80s referred to themselves as "The Company Plane" and the frequent flyer program was called "The Company Club" before being renamed to "Rapid Rewards." The fare structure with reasonable walk-up/refundable fares has always been aimed at price-sensitive business traffic.
 
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 8:46 am

Quoting Cubsrule (Reply 19):
. . . also why ORD exists. What's different?
Quoting ScottB (Reply 26):
And you're basically rehashing the reasons why ORD replaced MDW as Chicago's primary airport. One could easily argue that the FIS at MDW is "completely redundant" for the same reason, and that this would also be true at SNA, OAK, or FLL.

It's different because ORD is already incredibly busy and very delay-prone. It only made sense to allow Central American and North American int'l destinations from MDW as a reliever for ORD. IAH is not very delay-prone, has more than enough infrastructure and growing room to accommodate an increase in international tradfic. Building another FIS and hiring more CBP officers to do a job that is already more than adequately served at IAH just makes no sense, particularly when it is one airline that is requesting it-- an airline that has never run international flights. Why should an FIS be built and CBP officers hired for what equates to an experiment?

Yes, MDW went int'l, but LGA hasn't and neither has DCA. If we start giving all of the reliever airports FIS facilities for the likes of Southwest or other LCCs who specifically choose not to use the airport with existing facilities, then why not build one at DAL when the Wright Amendment ends? Because it doesn't make sense.

WN could run int'l routes from IAH and probably get just as much traffic as HOU, because I'd be wiling to bet that a majority of the traffic will be O&D. Connections could go through somewhere like SAT, AUS, etc. Even routes from PHX, LAS, and LAX to Central America would make sense.
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 12:37 pm

Quoting Cubsrule (Reply 21):
You really see WN in TGU or BZE?

Yes.

Quoting LAXdude1023 (Reply 22):
Your idea of what WN will end up with assuming they can fly internationally from HOU is quite grandiose. I dont see that at all.

Whats more realistic is a few major cities in Mexico and the Caribbean.

They have to grow somewhere. Remember there international model will be different that their domestic model. 1Xdaily flights will be the norm and these flight will rely on feed, not just VFR....thought something like IAH-SAL has a good bit of VFR

Quoting EricR (Reply 23):
WN already carries the most domestic passengers of any carrier, so they have a good base to draw from to support many of these Central American / Caribbean destinations. Furthermore, many of these destinations focus on tourists or are VFR destinations (which is WN's bread and butter).

Bingo!

Quoting atcsundevil (Reply 27):
WN could run int'l routes from IAH and probably get just as much traffic as HOU, because I'd be wiling to bet that a majority of the traffic will be O&D.

See above.
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 1:45 pm

Quote:
"I love Southwest’s service,” said Brittany Boynton. “They never cancel a flight."

"International flights are more expensive,” said Carlos Flores. “But if it's at an affordable price, yes, it'd be very convenient."

This is a testament to how incredible Southwest's marketing department is. They cancel plenty of flights, and new international destinations won't come cheap. Keep drinking the kool-aid!
Airports 2012: IXE HYD DEL BLR BOM CCU KNU KTM BKK SIN ICN LAX BUR SFO PHX IAH ORD EWR PHL PVD BOS FRA MUC IST
 
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 5:14 pm

Quoting ScottB (Reply 26):
Quoting EricR (Reply 25):
WN grew by bringing affordable fares to the average person. They did not grow to where they are due to business travelers

That's simply not true. They weren't flying 30+ times per day between DAL & HOU for the benefit of leisure passengers. ABQ-PHX or BOI-OAK or OMA-DEN or CLE-MDW aren't flown for the leisure traffic. Southwest's marketing in the '80s referred to themselves as "The Company Plane" and the frequent flyer program was called "The Company Club" before being renamed to "Rapid Rewards." The fare structure with reasonable walk-up/refundable fares has always been aimed at price-sensitive business traffic.

Then you and I will have to disagree on this point.

Calling out one of their original routes and using this as their standard is misleading. There is no doubt that WN has some routes directed to business travelers (such as DAL/HOU). However, WN's large gains in share across the country were built on providing affordable airfare to the average person.

Prior to the Internet becoming mainstream (middle 1990's), business customers used travel agencies to book their airfare (or had to call directly into the airline). WN had no relationship with travel agencies since they did not want to pay the fees and had very little corporate travel contracts. In fact, many companies did not allow or want you to book with WN because they had no arrangement with the airline, so they were handicapped by these limitations.

Also, if business required a person to fly to a particular location, they did so whether it was on WN or another carrier. Business travelers are less price sensitive than business customers. Combine this with the fact that WN offered little incentives for business travelers until recently and it is easy to see that much more of the gains in share for WN came from consumer rather than business passengers. I think WN's affordable fares for the average person helped the airline build up loyalty that eventually flowed into the business market, but I think the average consumer is responsible for WN's growth and not the business passenger.

WN did little until recently to market to business customers (calling your FF program the "Company Club" does little to attract business customers). WN admits that they are trying to attract more business travelers by introducing things such as Business Select Fares, Priority Boarding, contemplating assigned seating, etc., but this is a recent occurrence.

There are many studies that show that air travel increased considerably in markets once WN entered. The reason is because your typical non-business traveler now had a much more affordable & faster option than driving. Business travelers were much less impacted because if business demanded them to fly to a certain location, they did so whether it was on WN or another carrier.

On the other hand, consumers have a choice of staying home (because legacy fares were too high), driving, or taking WN. As the time went on, more and more consumers started flying WN.

[Edited 2012-01-29 09:18:47]
 
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 6:33 pm

Quoting atcsundevil (Reply 27):
It only made sense to allow Central American and North American int'l destinations from MDW as a reliever for ORD.

So 8 flights a day at MDW make an enormous difference in ORD delays? Sorry, this still doesn't add up.

Quoting EricR (Reply 30):
However, WN's large gains in share across the country were built on providing affordable airfare to the average person.

Much of your post - including this point - uses the past tense. That's telling. This isn't the WN of 1995 we are talking about anymore. As you seemingly admit, WN may well be more dependent on business travel than it has ever been. Why is the international expansion suddenly all about leisure travelers?
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 6:38 pm

Quoting Cubsrule (Reply 31):

Much of your post - including this point - uses the past tense. That's telling. This isn't the WN of 1995 we are talking about anymore. As you seemingly admit, WN may well be more dependent on business travel than it has ever been.

The point that you are taking out of context is that what got WN to where they are today is the consumer, not the business traveler.

Quoting Cubsrule (Reply 31):
Why is the international expansion suddenly all about leisure travelers?

The list of destinations that you specifically called out and that we are discussing are not business meccas. They are mostly leisure or VFR.

[Edited 2012-01-29 10:41:51]
 
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 6:42 pm

Quoting EricR (Reply 32):
The point that you are taking out of context is that what got WN to where they are today is the consumer, not the business traveler.

But the "consumer" isn't why WN opened BOS, EWR and MSP, is he?
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 7:09 pm

Quoting Cubsrule (Reply 33):
Quoting EricR (Reply 32):
The point that you are taking out of context is that what got WN to where they are today is the consumer, not the business traveler.

But the "consumer" isn't why WN opened BOS, EWR and MSP, is he?

Considering BOS, EWR, MSP have a combined catchment area exceeding 15 million people - yes - it is absolutely about the consumer (though business customers play a factor).

It should be an indication about WN and their business model when cities such as TUS, MCO, RNO, JAN, MSY, TPA, etc. were served years before service was started to "business" destinations such as EWR, BOS, LGA, and MSP (though MSP is more due to NW's hardball practices).

As I mentioned above, WN's affordable fares for the average person helped the airline build up loyalty that eventually flowed into the business market, but I think the average consumer is responsible for WN's growth and not the business passenger. WN would not have the appeal and mass it has today without focusing on the consumer several years ago.
 
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RE: WN Looking At International From HOU

Sun Jan 29, 2012 7:11 pm

Quoting EricR (Reply 34):
It should be an indication about WN and their business model when cities such as TUS, MCO, RNO, JAN, MSY, TPA, etc. were served years before service was started to "business" destinations such as EWR, BOS, LGA, and MSP

Absolutely (though JAN doesn't belong on your list). It is an indication of how much WN's business model has changed. You apparently agree on that point, so I'm not sure why we are arguing.
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RE: WN Looking At International From HOU

Mon Jan 30, 2012 11:14 am

Quoting Cubsrule (Reply 31):
So 8 flights a day at MDW make an enormous difference in ORD delays? Sorry, this still doesn't add up.

Neither does the rationale of having the city spend millions to construct an FIS facility and international arrivals gates, as well as have the federal government staff it with a dozen or more CBP officers during a time of financial hardship in the US.

I don't feel arguments add up either; just because MDW got FIS doesn't mean HOU should, or will, for that matter. WN hasn't yet proven themselves to be an international carrier, and to go through all of this trouble to what equates to an experiment seems illogical. Even if they do construct an FIS, it isn't like WN can run some spectacular international hub there -- HOU can't handle the traffic. Running these routes from AUS or SAT and grow them into small focus cities makes more sense to me because they both have room to grow and they're both int'l. Even running them from LAX, PHX, DEN, LAS, SAN, or MCO would be a good start -- they're large hubs that are existing int'l airports. PHX in particular, as it is fairly limited in its Central America routes, despite the fact there's a large market for it.

If WN can prove themselves to have a successful Latin America network, then I'd be in favor of them building an FIS at HOU. I have no doubt that they will be successful, but I still don't feel that a first move from HOU is a good for the airport/city, particularly in a tough economy.
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Cubsrule
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RE: WN Looking At International From HOU

Mon Jan 30, 2012 2:16 pm

Quoting atcsundevil (Reply 36):
WN hasn't yet proven themselves to be an international carrier, and to go through all of this trouble to what equates to an experiment seems illogical.

Wasn't the whole point of the FL purchase that FL is a proven international carrier?
I can't decide whether I miss the tulip or the bowling shoe more
 
hohd
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RE: WN Looking At International From HOU

Mon Jan 30, 2012 2:34 pm

The economy in Houston is good and needs the competition. The fares to Central America are consistently high and WN can provide good competition. A small FIS facility can be constructed and I am sure City of Houston will go along with it. WN will unlikely start many flights from AUS and SAT as they also rely on a good O&D traffic, which these cities do not have much, plus they do not have much connecting traffic either.
 
ScottB
Posts: 5504
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RE: WN Looking At International From HOU

Mon Jan 30, 2012 3:55 pm

Quoting atcsundevil (Reply 27):
Building another FIS and hiring more CBP officers to do a job that is already more than adequately served at IAH just makes no sense, particularly when it is one airline that is requesting it

So then you would agree that it would make no sense to build another FIS at IAH in Terminal B, since it would serve only one airline and that job is "already more than adequately served" by the Terminal E FIS.

Quoting EricR (Reply 30):
Prior to the Internet becoming mainstream (middle 1990's), business customers used travel agencies to book their airfare (or had to call directly into the airline). WN had no relationship with travel agencies since they did not want to pay the fees and had very little corporate travel contracts.

That's simply untrue. Travel agents booked WN for their clients just as they booked the other carriers. WN was actually on the CRS's run by their competitors (Apollo & System One) until 1994 when those competitors disabled ticketing for WN. WN's response was to give the largest agencies with which they did business direct access to their reservations system and to use overnight delivery for tickets to other agencies. Southwest was one of the last carriers to reduce the standard commission paid to agents from 10%, and they were one of the last carriers which continued to pay a percentage commission to agents not tied to an incentive.

Quoting EricR (Reply 30):
However, WN's large gains in share across the country were built on providing affordable airfare to the average person.

Southwest said the following in 2000 about their business:

Quote:
Southwest focuses principally on point-to-point, rather than hub-and-spoke, service in shorthaul markets with frequent, conveniently timed flights, and low fares.

That business model focuses primarily on price-sensitive business customers in short-haul markets who might otherwise drive. Leisure passengers aren't as sensitive to how flights are timed. Ten years ago, over 30% of Southwest's customers were purchasing full-fare tickets.

Quoting EricR (Reply 30):
Business travelers are less price sensitive than business customers. Combine this with the fact that WN offered little incentives for business travelers until recently and it is easy to see that much more of the gains in share for WN came from consumer rather than business passengers.

WN had great rewards for frequent customers! If you were flying short-haul on business, you could rack up a free round-trip anywhere in the system with 8 round-trips -- so 8 HOU-DAL round-trips would get you a free round-trip anywhere WN flew. And they gave you a coupon book for free drinks with the ticket. If you took 50 round-trips in a year, you got a free companion pass. But again, one of the key features of their product was offering a schedule which would be attractive to business travelers; that's why they entered markets like MHT and PVD with 8 round-trips to BWI (and increased frequency shortly thereafter).

Quoting EricR (Reply 30):
There are many studies that show that air travel increased considerably in markets once WN entered. The reason is because your typical non-business traveler now had a much more affordable & faster option than driving. Business travelers were much less impacted because if business demanded them to fly to a certain location, they did so whether it was on WN or another carrier.

Some business travel really is price-elastic. Small business owners, sole proprietors, contractors, etc. absolutely do make the decision of whether or not to fly based on cost vs. time. When your business or cost center has a fixed travel budget, higher airfares mean fewer trips even if the overall spend stays flat.

Quoting atcsundevil (Reply 27):
WN could run int'l routes from IAH and probably get just as much traffic as HOU, because I'd be wiling to bet that a majority of the traffic will be O&D.

In order for them to "run int'l routes from IAH and probably get just as much traffic as HOU," 100% of their traffic would have to be O&D, and that's simply unrealistic. In a business where 10% margins are well above average, giving up even 25% connecting feed would be the difference between good profits and deep losses.

Quoting atcsundevil (Reply 36):
If WN can prove themselves to have a successful Latin America network, then I'd be in favor of them building an FIS at HOU. I have no doubt that they will be successful, but I still don't feel that a first move from HOU is a good for the airport/city, particularly in a tough economy.

If WN is willing to back the costs of construction (which would likely be a prerequisite for the construction of an FIS at HOU), I don't see how this is a bad move for the city or airport. It's not as if WN would leave HOU, and the CBP officers would be federal employees. It seems like a win for the city with construction and CBP jobs created.
 
EricR
Posts: 1223
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RE: WN Looking At International From HOU

Mon Jan 30, 2012 4:44 pm

Quoting ScottB (Reply 39):
Some business travel really is price-elastic. Small business owners, sole proprietors, contractors, etc. absolutely do make the decision of whether or not to fly based on cost vs. time. When your business or cost center has a fixed travel budget, higher airfares mean fewer trips even if the overall spend stays flat.

I am not doubting that WN serves business travelers, and I agree that business travelers like WN's frequency. However, that is not my point. My point is that "WN grew by bringing affordable fares to the average person. They did not grow to where they are today due to business travelers (though they have been getting a larger share of the business market over the past few years)."

WN grew into more of a business focused airline, but they built loyalty and share by bringing affordable fares to the average person. If WN original business model was heavily focused around the business travelers, then we would have seen them enter business centers such as SFO, LGA, EWR, BOS, etc. long before they entered leisure destinations such as TUS, RNO, TPA, MCO, etc.

Quoting ScottB (Reply 39):
Leisure passengers aren't as sensitive to how flights are timed.

I completely disagree. I think the importance frequency for leisure passengers is greatly underestimated. If I am traveling on personal time and on my own dime, I am going to look for flights that maximize my time in that destination, thus the reason why an airline such as WN has great appeal to leisure passengers just as much as business passengers.
 
WNCrew
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RE: WN Looking At International From HOU

Mon Jan 30, 2012 4:52 pm

Quoting EricR (Reply 40):
If WN original business model was heavily focused around the business travelers, then we would have seen them enter business centers such as SFO, LGA, EWR, BOS, etc. long before they entered leisure destinations such as TUS, RNO, TPA, MCO, etc.

WN was developed around the needs of the short-haul business traveller. As a WN employee I can assure you that's where the focus WAS and IS in many ways, despite what you might "think". Ask any of our "original" employees and they'll tell you about the business travelers before you hear anything about leisure travelers. Our marketing was directed at business travelers, our cabin decor/seating, inflight service etc; it was all meant to attract the business traveler. Why weren't we in EWR, LGA etc? Because back then we weren't very big and focused mainly on the regional short-haul business traveller. DO we fly to MCO? Yes. Is that probably more a leisure market? Sure, but so does DL, AA, UA etc.

The point is that WN built it's business on and around the traveling needs/habits of the business traveler.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
atrude777
Posts: 4258
Joined: Wed Aug 13, 2003 11:23 pm

RE: WN Looking At International From HOU

Mon Jan 30, 2012 4:54 pm

Quoting EricR (Reply 40):
If WN original business model was heavily focused around the business travelers, then we would have seen them enter business centers such as SFO

Southwest was already at SFO years before hand before they pulled out in 2001, only to re- enter in 2007.

Also, if you're going to include SFO, why do you ignore the many big cities that SWA also served in their early days, PHX, LAX, STL, LAS, MCI, DEN/DIA, IAH it goes on and on. All of these are also big business cities/stations feeding the business travelers.

PS-SWA started service to PHX 30 years ago today, I'd say that's def one of the "early days" you are talking about.

Alex
Good things come to those who wait, better things come to those who go AFTER it!
 
EricR
Posts: 1223
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RE: WN Looking At International From HOU

Mon Jan 30, 2012 5:12 pm

Quoting Atrude777 (Reply 42):
Quoting EricR (Reply 40):
If WN original business model was heavily focused around the business travelers, then we would have seen them enter business centers such as SFO

Southwest was already at SFO years before hand before they pulled out in 2001, only to re- enter in 2007.

Also, if you're going to include SFO, why do you ignore the many big cities that SWA also served in their early days, PHX, LAX, STL, LAS, MCI, DEN/DIA, IAH it goes on and on. All of these are also big business cities/stations feeding the business travelers.

PS-SWA started service to PHX 30 years ago today, I'd say that's def one of the "early days" you are talking about.

The same principle holds true for most of the cities you listed.......if business customers were the true target, why did WN serve PHX, STL, LAS, DEN, MCI, etc. before serving major destinations such as NYC, BOS, SFO.

Also, SFO had very limited service when WN was there the first time around. I believe they only served two or three destinations at most with about 10-15 daily flights.
 
atrude777
Posts: 4258
Joined: Wed Aug 13, 2003 11:23 pm

RE: WN Looking At International From HOU

Mon Jan 30, 2012 5:28 pm

Quoting EricR (Reply 43):

The same principle holds true for most of the cities you listed.......if business customers were the true target, why did WN serve PHX, STL, LAS, DEN, MCI, etc. before serving major destinations such as NYC, BOS, SFO.

LAS is a HUGE convention center where millions of people all over the world fly to Vegas to hold meetings and business trips.

How can you ignore LAS and claim it is not a business city, much less a huge one. LAS holds its own right on being a big business city and should be comparable to BOS, NYC etc.

Quoting EricR (Reply 43):

Also, SFO had very limited service when WN was there the first time around. I believe they only served two or three destinations at most with about 10-15 daily flights.

As for SFO, they either serve it or they don't. You claimed WN need to serve SFO earlier, I point out that they did, then you chime in well, WN wasn't so big there. So what are you saying, they need to serve it, or do they need to serve it in a big way?

Southwest no doubt can thank their growing business from the leisure customers, but they can thank their business customers for having an even bigger part in making them successful.

All the cities I mentioned are big business cities, bigger then NYC, BOS and so forth? No, but they each hold their own, and you're going to tell me that LAX which they started long time ago, is much smaller then BOS and NYC?

Some would argue OAK was closer to downtown San Francisco back in the day (I don't live there I cannot say).
Good things come to those who wait, better things come to those who go AFTER it!
 
ScottB
Posts: 5504
Joined: Fri Jul 28, 2000 1:25 am

RE: WN Looking At International From HOU

Mon Jan 30, 2012 5:48 pm

Quoting EricR (Reply 43):
The same principle holds true for most of the cities you listed.......if business customers were the true target, why did WN serve PHX, STL, LAS, DEN, MCI, etc. before serving major destinations such as NYC, BOS, SFO.

WN originally started service to SFO in 1982. They dropped SFO in 2001 because the delays were out of control. If you want to cite major business destinations, then why are you leaving out HOU, DAL, MDW, LAX, and SEA? PHX, DEN, STL, and MCI are all important business centers as well. I'd argue that NYC, SFO, and BOS see a heck of a lot more inbound leisure than STL or MCI. They entered cities like PHX, STL, MCI, and LAS long before NYC & BOS because they were primarily a short-haul carrier, and these cities were closer to their original Texas intrastate network prior to deregulation.

Additionally, getting into NYC and BOS has historically been a problem for new entrants. In the 1990's, the inn was proverbially full at BOS and Massport was encouraging the development of PVD, MHT, & ORH as alternatives to BOS. Massport really only because interested in LCC service development after the legacy carriers' post 9/11 cutbacks at BOS. Slots and gates have long been an issue at NYC airports; B6 likely would not have been able to start up at JFK without several dozen peak-time slot exemptions and the Port Authority's help in getting gate space.
 
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totesen
Posts: 74
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RE: WN Looking At International From HOU

Mon Jan 30, 2012 7:30 pm

Quoting yellowtail (Reply 20):
ets see in Mexico and C. America

Southwest Airlines parthner Volaris could beneffit from this. it would be great to be able to fly to Houston from MEX on Y4 and they offer a lot of conections (say SAT), since Air Tran,Aeromexico and Interjet already fly to SAT from MEX. i think HOU could really work for Y4
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EricR
Posts: 1223
Joined: Mon Jul 26, 2010 4:15 pm

RE: WN Looking At International From HOU

Mon Jan 30, 2012 10:27 pm

Quoting Atrude777 (Reply 44):
LAS is a HUGE convention center where millions of people all over the world fly to Vegas to hold meetings and business trips.

How can you ignore LAS and claim it is not a business city, much less a huge one. LAS holds its own right on being a big business city and should be comparable to BOS, NYC etc.

Where did I say LAS has no business sector? I did not say this anywhere. You are jumping to conclusions that I did not say or insinuate in any way, shape, or form. Every city has a business sector associated with it. I suggest reading what I said instead of drawing unreasonable conclusions. Not once did I say any city was exclusively business or leisure.

Quoting Atrude777 (Reply 44):
As for SFO, they either serve it or they don't. You claimed WN need to serve SFO earlier, I point out that they did, then you chime in well, WN wasn't so big there. So what are you saying, they need to serve it, or do they need to serve it in a big way?

Because if WN was serious about business customers, then they would not have served an important business destination like SFO with minimal service and then drop it a few years later. That does not show commitment to the business traveler.

Quoting ScottB (Reply 45):
They entered cities like PHX, STL, MCI, and LAS long before NYC & BOS because they were primarily a short-haul carrier, and these cities were closer to their original Texas intrastate network prior to deregulation.

Please.....SFO, PDX, SEA is no closer to IAH/HOU than EWR.

Quoting ScottB (Reply 45):
They dropped SFO in 2001 because the delays were out of control.

And this was not limited to WN, yet WN was the only one to exit the market. AA, UA, CO, DL, NW, AS, etc. etc. stayed.

Quoting ScottB (Reply 45):
PHX, DEN, STL, and MCI are all important business centers as well. I'd argue that NYC, SFO, and BOS see a heck of a lot more inbound leisure than STL or MCI. They entered cities like PHX, STL, MCI, and LAS long before NYC & BOS because they were primarily a short-haul carrier, and these cities were closer to their original Texas intrastate network prior to deregulation.

I find it interesting how you flip flop your definition of cities to support your arguement. In some threads you claim PHX and LAS are leisure destinations yet now, to support this argument, you are claiming these are cities business meccas. Furthermore, you are claiming that NYC, SFO, and BOS are more leisure destinations and PHX and LAS have become top business destinations. Please, stop the insanity.

[Edited 2012-01-30 14:27:56]
 
atrude777
Posts: 4258
Joined: Wed Aug 13, 2003 11:23 pm

RE: WN Looking At International From HOU

Mon Jan 30, 2012 10:34 pm

Quoting EricR (Reply 47):

Where did I say LAS has no business sector? I did not say this anywhere. You are jumping to conclusions that I did not say or insinuate in any way, shape, or form. Every city has a business sector associated with it. I suggest reading what I said instead of drawing unreasonable conclusions. Not once did I say any city was exclusively business or leisure.

That's the point, you totally ignored LAS. You cherry picked cities you felt were strong business cities or stations that WN was late to the game in operating to, yet LAS just as equally if not a bigger part of the business spectrum you didn't mention even though Southwest had been serving LAS for many, many years. That's why I brought it up.

Quoting EricR (Reply 43):
if business customers were the true target, why did WN serve PHX, STL, LAS, DEN, MCI, etc. before serving major destinations such as NYC, BOS, SFO.

By Mentioning LAS as a "not major business customer destination" is where you mention LAS is not a true business city.

Alex
Good things come to those who wait, better things come to those who go AFTER it!
 
EricR
Posts: 1223
Joined: Mon Jul 26, 2010 4:15 pm

RE: WN Looking At International From HOU

Mon Jan 30, 2012 10:58 pm

Quoting Atrude777 (Reply 48):
That's the point, you totally ignored LAS. You cherry picked cities you felt were strong business cities or stations that WN was late to the game in operating to, yet LAS just as equally if not a bigger part of the business spectrum you didn't mention even though Southwest had been serving LAS for many, many years. That's why I brought it up.

No, you are missing the point. WN did not enter many major business destinations until recently. That is fact, and I listed several locations as examples. Never once did I say that WN doesn't serve any business destinations, though you are somehow coming up with this conclusion. My point is that if WN built up it mass today on the back of the business traveler, then they would have served some very important business destinations long before they served other destinations.

Quoting Atrude777 (Reply 48):
Quoting EricR (Reply 43):
if business customers were the true target, why did WN serve PHX, STL, LAS, DEN, MCI, etc. before serving major destinations such as NYC, BOS, SFO.


By Mentioning LAS as a "not major business customer destination" is where you mention LAS is not a true business city.

Compared to NYC, BOS, SFO, it isn't.......which is my point.

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