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aaden
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Is southwest airlines struggling this decade?

Wed Jan 25, 2017 2:39 pm

Hello anet,

I was wondering what the consensus on this forum was as to why southwest airlines has gone from being one of the leading airlines to struggling these past years.
Perhaps my perception is wrong but they do not seem nearly as strong of a carrier as they used to be- feel free to correct this thought if it is off base.


AADEN
Last edited by SQ22 on Wed Jan 25, 2017 4:57 pm, edited 1 time in total.
Reason: Title updated
 
airliner371
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Re: why is southwest airlines struggling this decade?

Wed Jan 25, 2017 2:41 pm

Not sure what you're talking about, perhaps they are not as low-cost as they used to be but they are just as strong as they've ever been and they're doing great financially.
 
micstatic
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Re: why is southwest airlines struggling this decade?

Wed Jan 25, 2017 2:41 pm

They are still delivering with excellent numbers. I think if the perception is they are struggling it comes down to them having more labor issues these days as well as running out of abundant organic growth opportunities.
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Newbiepilot
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Re: why is southwest airlines struggling this decade?

Wed Jan 25, 2017 2:49 pm

Southwest was a young growing airline in the 1990s. They had a young inexpensive workforce to go with it. Growth always keeps costs down. They had a lower cost structure than pretty much anyone else.

Then all the legacy airlines started dropping some of the high costs offerings. They also went through bankruptcy and seriously reduced cost. In the 1990s airlines like Alaska and Southwest had some of the lowest pay. Today, they no longer have cheaper contracts.

I would not say that southwest is struggling but they are not the fast growing young company that they used to be.
 
ikramerica
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Re: why is southwest airlines struggling this decade?

Wed Jan 25, 2017 2:53 pm

WN was s fuel hedging company that flew passengers on the side in the 2000s. It was their profit center. Once that gravy train finally left the station, they were left to deal with high labor costs and lower yields
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usflyguy
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Re: why is southwest airlines struggling this decade?

Wed Jan 25, 2017 4:30 pm

Newbiepilot wrote:
Southwest was a young growing airline in the 1990s. They had a young inexpensive workforce to go with it. Growth always keeps costs down. They had a lower cost structure than pretty much anyone else.

Then all the legacy airlines started dropping some of the high costs offerings. They also went through bankruptcy and seriously reduced cost. In the 1990s airlines like Alaska and Southwest had some of the lowest pay. Today, they no longer have cheaper contracts.

I would not say that southwest is struggling but they are not the fast growing young company that they used to be.


and Southwest has not filed for bankruptcy and/or contracted out all of their ground staff like all of the other major airlines.

Good try at starting a contentious a.net thread though.
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lavalampluva
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Re: why is southwest airlines struggling this decade?

Wed Jan 25, 2017 4:32 pm

I don't think they're struggling per se. I think they have expanded a bit too fast and might be trying to catch up. But I still don't think they are struggling.
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UAL777UK
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Re: why is southwest airlines struggling this decade?

Wed Jan 25, 2017 4:36 pm

Jeez, if they are struggling then I am sure there are a few airlines out there that would love to struggle like them!
 
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enilria
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Re: Is southwest airlines struggling this decade?

Wed Jan 25, 2017 5:24 pm

They are definitely not struggling, but I would say they are living off the glories of the past while being a laggard on adapting their formula to the future. I don't think those problems have seriously bitten them yet, but in the next decade they may.
 
barney captain
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Re: why is southwest airlines struggling this decade?

Wed Jan 25, 2017 5:36 pm

Newbiepilot wrote:
Southwest was a young growing airline in the 1990s. They had a young inexpensive workforce to go with it. Growth always keeps costs down. They had a lower cost structure than pretty much anyone else.

Then all the legacy airlines started dropping some of the high costs offerings. They also went through bankruptcy and seriously reduced cost. In the 1990s airlines like Alaska and Southwest had some of the lowest pay. Today, they no longer have cheaper contracts.

I would not say that southwest is struggling but they are not the fast growing young company that they used to be.


In the "90's", Southwest had been in operation for twenty plus years. I'm not sure how that qualifies as a "young" company.
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TWAL1011
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Re: Is southwest airlines struggling this decade?

Wed Jan 25, 2017 5:50 pm

The struggle is real for Southwest. I pulled the following facts on Southwest (LUV) to demonstrate (final 2016 figures not released until later today).

Operating Revenue
2009: $10.3 Billion
2010: $12.1 Billion
2011: $15.7 Billion
2012: $17.0 Billion
2013: $17.7 Billion
2014: $18.6 Billion
2015: $19.8 Billion

Net Income
2009: $ 99 Million
2010: $ 459 Million
2011: $ 178 Million
2012: $ 421 Million
2013: $ 754 Million
2014: $1.136 Billion
2015: $2.181 Billion

Net Margin:
2009: 1.0%
2010: 3.8%
2011: 1.1%
2012: 2.5%
2013: 4.3%
2014: 6.1%
2015: 11.0%

Year-end Fleet Size:
2009: 537
2010: 548
2011: 698
2012: 694
2013: 681
2014: 665
2015: 704
 
barney captain
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Re: Is southwest airlines struggling this decade?

Wed Jan 25, 2017 5:52 pm

TWAL1011 wrote:
The struggle is real for Southwest. ;) I pulled the following facts on Southwest (LUV) to demonstrate (final 2016 figures not released until later today).

Operating Revenue
2009: $10.3 Billion
2010: $12.1 Billion
2011: $15.7 Billion
2012: $17.0 Billion
2013: $17.7 Billion
2014: $18.6 Billion
2015: $19.8 Billion

Net Income
2009: $ 99 Million
2010: $ 459 Million
2011: $ 178 Million
2012: $ 421 Million
2013: $ 754 Million
2014: $1.136 Billion
2015: $2.181 Billion

Net Margin:
2009: 1.0%
2010: 3.8%
2011: 1.1%
2012: 2.5%
2013: 4.3%
2014: 6.1%
2015: 11.0%

Year-end Fleet Size:
2009: 537
2010: 548
2011: 698
2012: 694
2013: 681
2014: 665
2015: 704


One can assume you forgot to add a ;) to that post......:)

Fixed it for ya' ;) ;)
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aviationjunky
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Re: Is southwest airlines struggling this decade?

Wed Jan 25, 2017 5:57 pm

I would say that they have definitely dropped a little since the economy downfall back in 07-08. Their service has gone down, that's for sure. They are trying span their destinations to international markets, so they have to be doing well financially. As someone stated above, they are one of the only major US carriers that hasn't filed for bankruptcy. The other thing is they have over 700 737s spanning a few decades.

As a side question, does anyone know if they have an exclusive contract with Boeing for their planes or is that just the preference of the airline?
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compensateme
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Re: Is southwest airlines struggling this decade?

Wed Jan 25, 2017 6:00 pm

enilria wrote:
They are definitely not struggling, but I would say they are living off the glories of the past while being a laggard on adapting their formula to the future. I don't think those problems have seriously bitten them yet, but in the next decade they may.


Other airlines have adapted to WN, just as legacy retailers have adapted to Walmart, but let's not pretend that WN is not an 800 lb. gorilla in setting fares.

WN has expanded to most major markets, so people take the airline for granted, but it's not a coincidence people in CVG pay an average of 40% more to travel to Chicago than those in DTW, CLE and PIT.

aviationjunky wrote:
I would say that they have definitely dropped a little since the economy downfall back in 07-08. Their service has gone down, that's for sure. They are trying span their destinations to international markets, so they have to be doing well financially. As someone stated above, they are one of the only major US carriers that hasn't filed for bankruptcy. The other thing is they have over 700 737s spanning a few decades.

As a side question, does anyone know if they have an exclusive contract with Boeing for their planes or is that just the preference of the airline?


How has WN's service decreased in the past decade? They've added IFE, including streaming live TV. They still offer snacks and a full beverage service even on the their shortest flights -- granted selection has decreased but they're the only airline on short flights that offers it on every flight.
We don’t care what your next flight is.
 
commavia
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Re: why is southwest airlines struggling this decade?

Wed Jan 25, 2017 6:12 pm

airliner371 wrote:
Not sure what you're talking about, perhaps they are not as low-cost as they used to be but they are just as strong as they've ever been and they're doing great financially.


I would disagree with the assertion that Southwest is "as strong as [it's] ever been." While I agree that in absolute terms, Southwest is hardly struggling. It's still a massive, profitable, well-run company with smart people. That said, I think the perception of weakness stems from the fact that it's advantage relative to the industry has, objectively, shrunk considerably from where it once was. Southwest is still immensely profitable, but it's hard to argue today that Southwest is materially more profitable, on average, than many of its competitors. Additionally, I think it's pretty obvious that Southwest isn't the competitive force it once was. It's clearly still a disruptive, low-cost competitor, but the vaunted "Southwest effect" of 1990s fame is hardly what it used to be.

micstatic wrote:
They are still delivering with excellent numbers. I think if the perception is they are struggling it comes down to them having more labor issues these days as well as running out of abundant organic growth opportunities.


"What got you here won't get you there."

That's the bottom line. Southwest is perceived as having long some ground - in terms of its relative competitive edge versus the industry - because it's in the process of reinventing itself to be competitive in a totally different world. Southwest's cost advantage versus network carriers has shrunk, and it faces significant lower-cost competition itself. Things have to change, and they are changing. But it isn't easy, and it takes time.

Newbiepilot wrote:
Southwest was a young growing airline in the 1990s. They had a young inexpensive workforce to go with it. Growth always keeps costs down. They had a lower cost structure than pretty much anyone else.

Then all the legacy airlines started dropping some of the high costs offerings. They also went through bankruptcy and seriously reduced cost. In the 1990s airlines like Alaska and Southwest had some of the lowest pay. Today, they no longer have cheaper contracts.

I would not say that southwest is struggling but they are not the fast growing young company that they used to be.


This.

usflyguy wrote:
and Southwest has not filed for bankruptcy and/or contracted out all of their ground staff like all of the other major airlines.


Not quite. Southwest was outsourcing plenty of stuff - overhauls immediately come to mind - long before its network/legacy rivals.

barney captain wrote:
In the "90's", Southwest had been in operation for twenty plus years. I'm not sure how that qualifies as a "young" company.


In the airline industry at that time, 20+ years was, indeed, quite "young."
 
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BobPatterson
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Re: Is southwest airlines struggling this decade?

Wed Jan 25, 2017 6:18 pm

aviationjunky wrote:
I would say that they have definitely dropped a little since the economy downfall back in 07-08. Their service has gone down, that's for sure. They are trying span their destinations to international markets, so they have to be doing well financially. As someone stated above, they are one of the only major US carriers that hasn't filed for bankruptcy. The other thing is they have over 700 737s spanning a few decades.

As a side question, does anyone know if they have an exclusive contract with Boeing for their planes or is that just the preference of the airline?


I'm left to wonder what you are talking about in your first paragraph. Can you cite any financial metrics that have suffered since 07-08? Seems to me that the service I experienced in 2016 was the same that I experienced during 1998-2004 when I flew frequently with Southwest.

Many WN aircraft were acquired used, so they definitely have a preference for Boeing products. It's pretty obvious that the reason is primarily to simplify maintenance operations and keep costs as low as possible.
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DFW789ER
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Re: Is southwest airlines struggling this decade?

Wed Jan 25, 2017 8:54 pm

aviationjunky wrote:
I would say that they have definitely dropped a little since the economy downfall back in 07-08. Their service has gone down, that's for sure. They are trying span their destinations to international markets, so they have to be doing well financially. As someone stated above, they are one of the only major US carriers that hasn't filed for bankruptcy. The other thing is they have over 700 737s spanning a few decades.

As a side question, does anyone know if they have an exclusive contract with Boeing for their planes or is that just the preference of the airline?


I don't know which flights you were on. I fly WN 20x a year minimum and the level of service is as good if not better than 20 years ago.
 
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Re: Is southwest airlines struggling this decade?

Wed Jan 25, 2017 9:22 pm

DFW789ER wrote:
aviationjunky wrote:
I would say that they have definitely dropped a little since the economy downfall back in 07-08. Their service has gone down, that's for sure. They are trying span their destinations to international markets, so they have to be doing well financially. As someone stated above, they are one of the only major US carriers that hasn't filed for bankruptcy. The other thing is they have over 700 737s spanning a few decades.

As a side question, does anyone know if they have an exclusive contract with Boeing for their planes or is that just the preference of the airline?


I don't know which flights you were on. I fly WN 20x a year minimum and the level of service is as good if not better than 20 years ago.


I fly WN probably once a month from LAS to LAX, and typically use them or DL when I need to back East. Their flights are almost 30min late pretty much every time. The flight attendants are rude and act like its an inconvenience for them to be there, even the gate agents as well. Maybe it's just the LAS base, but everytime I fly WN, I get nothing but attitude and issues.
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Jshank83
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Re: Is southwest airlines struggling this decade?

Wed Jan 25, 2017 9:33 pm

aviationjunky wrote:

I fly WN probably once a month from LAS to LAX, and typically use them or DL when I need to back East. Their flights are almost 30min late pretty much every time. The flight attendants are rude and act like its an inconvenience for them to be there, even the gate agents as well. Maybe it's just the LAS base, but everytime I fly WN, I get nothing but attitude and issues.


Being in STL, I pretty much only fly WN. I rarely have any issues. Once in awhile they do weird plane change things that lead to delays but for the most part I haven't had any issues. I rarely have a service issue besides their corny jokes.
 
airzona11
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Re: Is southwest airlines struggling this decade?

Wed Jan 25, 2017 11:13 pm

The one thing that I enjoy most about flying WN is the consistency. From the staff, to the service, to the IFE. Most of my other flying the past 5 or so years has been WN + either AA or UA. The roulette between planes, service, FAs, staff, IFE etc while understandable is / was comical at times. To me it adds up, especially when giving the airlines thousands of dollars and many hours of patronage every year.

Something as simple as drink tickets. Unless I am Exec Plat on AA flying in economy, the only thing AA gives me is a "How am I doing ticket" to give kudos for good service. It was always been something that sticks out in my mind. Why is a beer $5 on WN yet $8 on the legacy carriers? Come on man.

I remember the "young Southwest"... Getting the plastic boarding cards, the 20 min turns, the no A-list, etc. The service was awesome then as it is now, they have added nearly ubiquitous WIFI and Live TV, Priority Boarding, the easiest/ straight forward rewards program,etc to really close the gap on the "business traveler" conveniences that legacy airlines have. And that is all in the past 5-10 years, so I see them continuing to evolve and excel.

Across the board putting the customer first is where WN leads the pack. Full disclosure bc of where my travel takes me I fly about 60/40 WN/AA. This past year it was more AA vs WN. But on a head to head route, I have a hard time not choosing WN.
 
DCA-ROCguy
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 12:20 am

As much noted above, much of the perception of 'weakness' about Southwest has to do with the changes to their business model primarily in response to age and consolidation. They had to buy out AirTran to maintain comparable mass to the consolidating legacies, and moved into congested East Coast airports at the behest of their business travelers. The hedges of the 2000's ran out, and their workforce became more senior. Oil prices rose for them like for everyone else. The legacies cut their costs in bankruptcy and narrowed the CASM gap even more. I have to wonder what adding international flights is doing to their cost structure. They got away with keeping a dinosaur res system much longer than they should have by staying domestic.

Southwest's major mistake of the 90's was not getting into JFK; imagine what is now JetBlue being part of Southwest. Southwest's major mistake of the 00's was not using the time bought by oil hedges to deal with their costs and upgrade their res system. Now, WN might discipline fares, but they no longer are out front leading. When Southwest could set the fare floor wherever they went, they could grow more and stimulate more new traffic--profiting by getting new fliers in the air.

If Southwest wants to lead again, they need to widen the CASM gap with legacies more. It won't ever be what it was, because of the legacy bankruptcies, but it could be better. And then they'd have more 'organic' growth opportunities again.

Jim
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LAX772LR
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 1:19 am

aviationjunky wrote:
As a side question, does anyone know if they have an exclusive contract with Boeing for their planes or is that just the preference of the airline?

I'm not sure WN ever had an exclusivity agreement with Boeing, as opposed to just preferring them as an OEM.

Though it's moot, considering that even if there were such an agreement, it would've been dissolved in 1997 along with DL/AA/CO's.
I myself, suspect a more prosaic motive... ~Thranduil
 
ikramerica
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 2:26 am

I'm pretty sure everyone had a great 2015 because of low fuel prices. How did WN fare relative to the industry.
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southwest1675
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 2:36 am

WN is doing fine, and still a great company, hope they can get something working for their labor issues. I'll say the Herb days were better in my honest opinion. At least from a culture point of view.
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cledaybuck
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 3:08 am

ikramerica wrote:
I'm pretty sure everyone had a great 2015 because of low fuel prices. How did WN fare relative to the industry.

Assuming I did the math right, here are the operating margins for 2015:
AA-15.1%
DL-19.2%
UA-13.6%
WN-20.8%
B6-18.7%
AS-23.1%
HA-18.6%
NK-23.8%
F9-17.2%
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michman
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 3:43 am

Clearly they are not "struggling" as indicated by their financials. I think it's fair to say they've been able to leverage the legacy consolidations to continue to grow and increase market share over the last decade. That said, their growth rates are beginning to flatten (largely to be expected as they approach saturation) and they are likely to face increased headwinds now that legacy consolidations are over and with continued ULCC growth.

WN RPM growth over last 3 decades
1985 6.0 mil
1995 23.3 mil 388%
2005 60.2 mil 258%
2015 117.5 mil 195%

In comparison, NK went from 6.6 mil to 18 mil (273%) in just the 5 year period from 2010 - 2015.
Meanwhile, DL only grew from 193.2 mil to 209.6 mil (8.5%) from 2010 - 2015.
 
slcdeltarumd11
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 3:57 am

This is the easiest question ever put on a.net:
NO

This is the one airline that can consistantly make money in good and bad times. With high oil or low oil prices they can make money.

TWAL1011 wrote:
The struggle is real for Southwest. I pulled the following facts on Southwest (LUV) to demonstrate (final 2016 figures not released until later today).

Operating Revenue
2009: $10.3 Billion
2010: $12.1 Billion
2011: $15.7 Billion
2012: $17.0 Billion
2013: $17.7 Billion
2014: $18.6 Billion
2015: $19.8 Billion

Net Income
2009: $ 99 Million
2010: $ 459 Million
2011: $ 178 Million
2012: $ 421 Million
2013: $ 754 Million
2014: $1.136 Billion
2015: $2.181 Billion
 
kabq737
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 3:59 am

Here in ABQ WN is one of the only options. I fly them many times a year and I must say they're stIll great from a passenger perspective but they have some serious timeliness issues. Honestly someone needs to buy them a pocket watch because it seems like no matter what they do they cannot leave on time. A little while back I was flying to San Diego and we pushed back on time but then had to wait an hour to be de iced because WN only has 1 de ice truck here in ABQ. AA flights were leaving like crazy because they have adequate equipment but because WN was short on equipment we left an hour late. I know this was just one time but this kind of issue is becoming really common when I fly them and I'm getting tired of it.

So short answer is no they're by no means struggling however, I would personally choose DL or AA over WN any day of the week. That's coming from someone who used to be an extremely loyal customer to WN.
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IPFreely
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Re: why is southwest airlines struggling this decade?

Thu Jan 26, 2017 4:40 am

commavia wrote:
Southwest is still immensely profitable, but it's hard to argue today that Southwest is materially more profitable, on average, than many of its competitors.


Only if you ignore the facts.

Most recent year EBIT results:

Allegiant 37.1%
Alaska 31.1%
Spirit 26.8%
Southwest 26.0%
JetBlue 25.3 %
Hawaiian 25.0%
Delta 22.7%
American 20.6%
United 19.0%
Skywest 18.2%

Southwest is more profitable than most of their competitors, and the most profitable of the "big four".
 
commavia
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Re: why is southwest airlines struggling this decade?

Thu Jan 26, 2017 5:03 am

IPFreely wrote:
Only if you ignore the facts.

Most recent year EBIT results:

Allegiant 37.1%
Alaska 31.1%
Spirit 26.8%
Southwest 26.0%
JetBlue 25.3 %
Hawaiian 25.0%
Delta 22.7%
American 20.6%
United 19.0%
Skywest 18.2%

Southwest is more profitable than most of their competitors, and the most profitable of the "big four".


I'd argue that the most meaningful income statement measure, over the long-run, is net and not EBIT margin, but setting that aside, perhaps I'm missing the "facts" that I'm supposed to ignore, because I fail to see how the above numbers - if accurate - negate my point. As said, it's hard to argue that Southwest is "materially more profitable" (key word: "materially") than "many" (key word: "many," not "most") of its competitors. Seeing as more than half of Southwest's competitors above are listed as having EBIT margins either above Southwest, or within 100 basis points of Southwest, I stand by my earlier point. Southwest's margins are not materially better than JetBlue or Hawaiian (or, I'd argue, even Delta) and they're lower than Allegiant, Alaska and Spirit. Thus, my earlier point: Southwest today is pretty much middle of the pack in the industry - solidly profitable, for sure, but not dramatically more profitable, or seemingly more consistently profitable, than its peers.
 
Chemist
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 5:17 am

aviationjunky wrote:

I fly WN probably once a month from LAS to LAX, and typically use them or DL when I need to back East. Their flights are almost 30min late pretty much every time. The flight attendants are rude and act like its an inconvenience for them to be there, even the gate agents as well. Maybe it's just the LAS base, but everytime I fly WN, I get nothing but attitude and issues.


I flew WN over 60 flights last year, and 50 the year prior.
I have to say that the one thing that I don't think I've EVER had happen is anything other than a friendly and helpful crew on all the flights I've taken.

They can be late, but I've never seen anything but good service. That is a huge differentiator as compared to other airlines.

You typically see late flights later in the day, as any issues during the day will cascade through the later flights that plane makes. Since they have so many shorter haul flights, this can happen.
 
frmrCapCadet
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 3:18 pm

WN makes an effort to make flying Y as comfortable as possible.

My last RT with them did involve a plane replacement and late segments. But final destination times were relatively on time, and agents took the responsibility for paging and rebooking some passengers. This meant no stress on our part.

Incidentally while my hearing has deteriorated over the decades, the public announcement systems were easier to hear than 30 years ago. Anyone know how this improvement came about.
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hOMSaR
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 4:17 pm

frmrCapCadet wrote:
Incidentally while my hearing has deteriorated over the decades, the public announcement systems were easier to hear than 30 years ago. Anyone know how this improvement came about.


If you're talking about on-board announcements, planes are quieter so announcements would be easier to hear over aircraft noise.
I was raised by a cup of coffee.
 
Vulindlela
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 4:37 pm

I think whenever a company goes through a transition where the founder, who is the leader of the company, steps down or retires, there is always the feeling that a company has started to lose it's way. Apple went through this twice when Steve Jobs left. Now that Herb Kelleher and Colleen Barrett are both gone, people perceive that the magic of Southwest has gone with them and that people that didn't start the company could never be trusted to fully understand what made it the success it became.
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frmrCapCadet
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Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 5:38 pm

hOMSaR wrote:
frmrCapCadet wrote:
Incidentally while my hearing has deteriorated over the decades, the public announcement systems were easier to hear than 30 years ago. Anyone know how this improvement came about.


If you're talking about on-board announcements, planes are quieter so announcements would be easier to hear over aircraft noise.


Actually it is the airport PA system which I have noticed is far better.
Buffet: the airline business...has eaten up capital...like..no other (business)
 
barney captain
Posts: 2356
Joined: Tue Nov 06, 2001 5:47 pm

Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 6:19 pm

LAX772LR wrote:
aviationjunky wrote:
As a side question, does anyone know if they have an exclusive contract with Boeing for their planes or is that just the preference of the airline?

I'm not sure WN ever had an exclusivity agreement with Boeing, as opposed to just preferring them as an OEM.

Though it's moot, considering that even if there were such an agreement, it would've been dissolved in 1997 along with DL/AA/CO's.


There's a famous story of when Herb was up at Boeing negotiating the price of the upcoming NG. At some point during the discussions, he nonchalantly took a pen out of his pocket and casually tapped it on the table.

A pen that read AIRBUS.

I miss that man.
Southeast Of Disorder
 
jetwet1
Posts: 3243
Joined: Thu Jun 14, 2007 4:42 am

Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 6:53 pm

aviationjunky wrote:
I fly WN probably once a month from LAS to LAX, and typically use them or DL when I need to back East. Their flights are almost 30min late pretty much every time. The flight attendants are rude and act like its an inconvenience for them to be there, even the gate agents as well. Maybe it's just the LAS base, but everytime I fly WN, I get nothing but attitude and issues.


I fly them a couple of times a month either to SMF or LAX, I can't say that in the 20 odd years of flying WN, I have ever come across a rude FA or gate agent, yes sometimes the later flights in the day can run late, honestly, I have gotten more attitude from AA FA's (and even then it's only just being cold, not happy and bubbly ) so no idea how you manage to run into them.

barney captain wrote:
There's a famous story of when Herb was up at Boeing negotiating the price of the upcoming NG. At some point during the discussions, he nonchalantly took a pen out of his pocket and casually tapped it on the table.

A pen that read AIRBUS.

I miss that man.


I have to remember that move next time I am negotiating with a vendor....
 
cumulushumilis
Posts: 230
Joined: Wed Jul 27, 2016 8:49 pm

Re: Is southwest airlines struggling this decade?

Thu Jan 26, 2017 7:13 pm

DCA-ROCguy wrote:
As much noted above, much of the perception of 'weakness' about Southwest has to do with the changes to their business model primarily in response to age and consolidation. They had to buy out AirTran to maintain comparable mass to the consolidating legacies, and moved into congested East Coast airports at the behest of their business travelers. The hedges of the 2000's ran out, and their workforce became more senior. Oil prices rose for them like for everyone else. The legacies cut their costs in bankruptcy and narrowed the CASM gap even more. I have to wonder what adding international flights is doing to their cost structure. They got away with keeping a dinosaur res system much longer than they should have by staying domestic.

Southwest's major mistake of the 90's was not getting into JFK; imagine what is now JetBlue being part of Southwest. Southwest's major mistake of the 00's was not using the time bought by oil hedges to deal with their costs and upgrade their res system. Now, WN might discipline fares, but they no longer are out front leading. When Southwest could set the fare floor wherever they went, they could grow more and stimulate more new traffic--profiting by getting new fliers in the air.

If Southwest wants to lead again, they need to widen the CASM gap with legacies more. It won't ever be what it was, because of the legacy bankruptcies, but it could be better. And then they'd have more 'organic' growth opportunities again.

Jim


I would agree with above assessment. WN is behind the eight ball implementing new technology, something they should have done years ago. WNs potential to generate ancillary revenue is largely untapped due to a legacy reservation system. Also not having the ability to optimize your revenue management system is a huge barrier to growth and lowering costs. As WN implements their new reservation system I suspect an increase in growth opportunities and increased revenue.
 
d8s
Posts: 134
Joined: Thu Feb 23, 2012 6:45 pm

Re: Is southwest airlines struggling this decade?

Sat Feb 11, 2017 9:26 pm

aviationjunky wrote:
"I fly WN probably once a month from LAS to LAX, and typically use them or DL when I need to back East. Their flights are almost 30min late pretty much every time. The flight attendants are rude and act like its an inconvenience for them to be there, even the gate agents as well. Maybe it's just the LAS base, but everytime I fly WN, I get nothing but attitude and issues."[/quote]

--> Is it the airline that has the issues or is it the passenger that is the issue?
 
User avatar
atypical
Posts: 797
Joined: Mon Aug 18, 2014 12:28 am

Re: Is southwest airlines struggling this decade?

Mon Feb 13, 2017 8:17 pm

Interesting post. I think the perception as indicated in the title is more salient than whether it is factually true or not. I have heard this kind of opinion expressed in a few different ways and I think I understand where it is coming from. Simply put I think a lot of this perception comes from the fall of Superman. Two events in the last 10 years or so I think play largely into this: the first fatality in an aircraft incident (WN1248) and their first quarterly loss in 2008 since becoming a major airline player. Even though the fatality was not on-board and the loss was due to a write-down the average person is likely just to remember "fatality" and "loss (of money)." These kinds of terms were reserved for other airlines and were never applied to Southwest. Superman as the best athlete in the world is still struggling for Superman. Southwest enjoyed a long period where the problems every other airline suffered Southwest was immune to. In the last decade Southwest has shown it is just as susceptible to those same forces that affect the other airlines. The perception of struggling I think is largely as a result of the phenomenal success Southwest enjoyed for so long.

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