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Demise of WN in the PNW

Posted: Thu Sep 13, 2018 3:25 pm
by USAirALB
My apologies if this has been discussed before (I'm sure it probably was already in some WN-related thread).

I seemed to recall that WN once had a somewhat robust intra-PNW network. I recall them flying:


GEG-PDX/SEA/SLC
SLC-BOI/RNO/SEA/PDX
PDX-BOI/RNO
BOI-SEA/RNO
RNO-SEA

What caused WN to discontinue these routes? Competition from AS/DL? I know within the last several years they seemed to distance themselves from shorter segments (some of the intra-Florida routes come to mind, like the discontinued TPA-PBI).

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 3:59 pm
by MIflyer12
USAirALB wrote:
Competition from AS/DL? I know within the last several years they seemed to distance themselves from shorter segments...


Those two factors probably explain a lot of it. AS rules on frequency in the PNW, and Delta brought 2-class planes (F cabins, Comfort+, wifi) to every route out of SEA.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 4:47 pm
by JBoy
I think WN left most of these markets (or reduced their frequencies) before DL moved in. Consistent AS pressure and pricing made it so WN went after bigger fish.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 4:49 pm
by Varsity1
Makes me wonder if AS is going to put a damp rag on WN's Hawaii ambitions. AS has a lower CASM on the -900ER's than anything WN owns.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 5:08 pm
by Chugach
USAirALB wrote:
My apologies if this has been discussed before (I'm sure it probably was already in some WN-related thread).

I seemed to recall that WN once had a somewhat robust intra-PNW network. I recall them flying:


GEG-PDX/SEA/SLC
SLC-BOI/RNO/SEA/PDX
PDX-BOI/RNO
BOI-SEA/RNO
RNO-SEA

What caused WN to discontinue these routes? Competition from AS/DL? I know within the last several years they seemed to distance themselves from shorter segments (some of the intra-Florida routes come to mind, like the discontinued TPA-PBI).


Not sure I’d qualify RNO as Pacific Northwest, but to answer your question WN inherited a robust PNW network from the Morris Air acquisition. AS ran them out of routes like GEG-SEA by using the Q400 (much cheaper to operate than a 737) and depressing fares.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 5:22 pm
by airzona11
Varsity1 wrote:
Makes me wonder if AS is going to put a damp rag on WN's Hawaii ambitions. AS has a lower CASM on the -900ER's than anything WN owns.


But WN isn't flying from PacNW to Hawaii. AS 739 seats 178, WN 738 seats 175. AS operates many 738s to the islands as well. Not sure that is a big factor, WN is going to fly to the islands where they have a strong FF base. If CASM was the key to beating WN, every airline moved up from 73G sized planes but WN, that is their bread and butter.

PacNW is dominated by Seattle, then PDX, and is out of the way from everywhere else. This turns it into a strong hub position for AS. WN seems relegated to the larger O/D stations into PacNW. In addition, the high frequency AS pulls connecting traffic from all the small outstations.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 5:37 pm
by ShinyAndChrome
Varsity1 wrote:
Makes me wonder if AS is going to put a damp rag on WN's Hawaii ambitions. AS has a lower CASM on the -900ER's than anything WN owns.


WN will start Hawaii service from their core California markets, where they have a stronger networrk and market penetration relative to AS.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 5:40 pm
by LAXBUR
WN left these routes before the DL expansion. UA actually flew some of these routes when they had a bigger presence in SEA. But I believe they ended much of that service before WN did.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 5:44 pm
by LotsaRunway
We are seeing similar things network wide. Flights are being trimmed everywhere to reflect O&D patterns. In general, flights between big cities are getting more connections as those with less ability to support nonstops on an O&D basis drop. This may be enhanced by WN's aircraft getting larger and needing even larger O&D to support their flights. The 122 and 137 seaters are all gone. The smallest is now 143 and virtually all the fleet growth is in 175 seaters. I could see the trend continue until the ripest markets are plucked. WN will either have to look internationally or figure out a way to serve smaller markets if they want to continue to grow.

In the Northwest, the war between AS and DL has probably reduced the O&D choosing to fly WN at the fares they are willing to offer. I think BOS is starting to face the same thing, and there will be more.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 6:55 pm
by MCIRNO
USAirALB wrote:
My apologies if this has been discussed before (I'm sure it probably was already in some WN-related thread).
GEG-PDX/SEA/SLC
SLC-BOI/RNO/SEA/PDX
PDX-BOI/RNO
BOI-SEA/RNO
RNO-SEA

What caused WN to discontinue these routes? Competition from AS/DL? I know within the last several years they seemed to distance themselves from shorter segments (some of the intra-Florida routes come to mind, like the discontinued TPA-PBI).


I don't know about all of them but it could be as simple as demand versus the number of seats. The RNO examples that are shown, the SEA are now generally flown by E175s while the PDX and BOI are generally Q400s (though PDX does get the E175 too). Nevertheless, that's 70-75 seats per flight versus a single 737 with 140+ seat per flight.

It seems that some in RNO expect DL to connect SEA eventually and their monopoly flights to/from SLC always seem to be 100% full but SLC isn't a WN focus city so I would doubt they'd reenter that route.

Maybe F9 can setup shop!

As for the comments about AS vs WN in the California to/from Hawaii markets...WN is adding those flights from airports where they are the super-majority carrier. For example, OAK has 135+ daily WN flights, AS has fewer than 15.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 7:45 pm
by usxguy
I think WN realized early that the PNW business travel is locked up with AS/UA (and now DL). Seattle is home to some VERY large companies, and Alaska already has a tight grip on those corporations (one of the first realizations to VX was an uptick in corp travel due to the contracts that came to the table). Many people in the PNW aren't quite in tune with WN's quirkiness and business model.

WN normally is able to come in to markets and garner the business traffic because of their fares, flight times, and of course big jets. Some markets are harder to penetrate than others, and I think maybe WN over-estimated the PacNW a bit.... I mean, Morris Air *did* sell for a reason....

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 8:06 pm
by slcdeltarumd11
Combination of AS and DL. Most of these don't have the O&D southwest needs for their model to work. Would have been easy to chase them off these routes.

Also WN use to connect alot of people thru SLC that traffic now all goes thru DEN. Some of these flights moved to DEN as that is where the connection power is now.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 8:30 pm
by ridgid727
DL had not entered the SEA market as a hub and spoke operator at the time that WN retrenched. It had more to Southwest placing emphasis on and building up Denver than anything.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 8:42 pm
by slcdeltarumd11
ridgid727 wrote:
DL had not entered the SEA market as a hub and spoke operator at the time that WN retrenched. It had more to Southwest placing emphasis on and building up Denver than anything.


No but delta was on all of those SLC routes mentioned. It was both AS and DL that made those routes less attractive in addition to alot moving to DEN for connections.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 8:42 pm
by Bobloblaw
USAirALB wrote:
My apologies if this has been discussed before (I'm sure it probably was already in some WN-related thread).

I seemed to recall that WN once had a somewhat robust intra-PNW network. I recall them flying:


GEG-PDX/SEA/SLC
SLC-BOI/RNO/SEA/PDX
PDX-BOI/RNO
BOI-SEA/RNO
RNO-SEA

What caused WN to discontinue these routes? Competition from AS/DL? I know within the last several years they seemed to distance themselves from shorter segments (some of the intra-Florida routes come to mind, like the discontinued TPA-PBI).


WN cant be big everywhere and fight battles everywhere. They have a lot of opportunities elsewhere. In 2015-16 DAL was a top priority. Also Intra-CA and before that DEN. STL is a big opportunity for WN as is BNA.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 8:49 pm
by BoeingGuy
airzona11 wrote:
Varsity1 wrote:
Makes me wonder if AS is going to put a damp rag on WN's Hawaii ambitions. AS has a lower CASM on the -900ER's than anything WN owns.


But WN isn't flying from PacNW to Hawaii. AS 739 seats 178, WN 738 seats 175. AS operates many 738s to the islands as well. Not sure that is a big factor, WN is going to fly to the islands where they have a strong FF base. If CASM was the key to beating WN, every airline moved up from 73G sized planes but WN, that is their bread and butter.

PacNW is dominated by Seattle, then PDX, and is out of the way from everywhere else. This turns it into a strong hub position for AS. WN seems relegated to the larger O/D stations into PacNW. In addition, the high frequency AS pulls connecting traffic from all the small outstations.


You are aware that AS flies to Hawaii from 7 California airports too?

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 9:59 pm
by airzona11
BoeingGuy wrote:
airzona11 wrote:
Varsity1 wrote:
Makes me wonder if AS is going to put a damp rag on WN's Hawaii ambitions. AS has a lower CASM on the -900ER's than anything WN owns.


But WN isn't flying from PacNW to Hawaii. AS 739 seats 178, WN 738 seats 175. AS operates many 738s to the islands as well. Not sure that is a big factor, WN is going to fly to the islands where they have a strong FF base. If CASM was the key to beating WN, every airline moved up from 73G sized planes but WN, that is their bread and butter.

PacNW is dominated by Seattle, then PDX, and is out of the way from everywhere else. This turns it into a strong hub position for AS. WN seems relegated to the larger O/D stations into PacNW. In addition, the high frequency AS pulls connecting traffic from all the small outstations.


You are aware that AS flies to Hawaii from 7 California airports too?


This thread was specifically referencing the PacNW. If you are addressing CA market, in all but SFO, WN is larger than AS, the AS vs WN dynamic is much different in those locations.

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 10:24 pm
by BravoOne
Or........it could be that both AS, and DL have a superior product for about the same cost?

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 10:35 pm
by seat1a
BoeingGuy wrote:
airzona11 wrote:
Varsity1 wrote:
Makes me wonder if AS is going to put a damp rag on WN's Hawaii ambitions. AS has a lower CASM on the -900ER's than anything WN owns.


But WN isn't flying from PacNW to Hawaii. AS 739 seats 178, WN 738 seats 175. AS operates many 738s to the islands as well. Not sure that is a big factor, WN is going to fly to the islands where they have a strong FF base. If CASM was the key to beating WN, every airline moved up from 73G sized planes but WN, that is their bread and butter.

PacNW is dominated by Seattle, then PDX, and is out of the way from everywhere else. This turns it into a strong hub position for AS. WN seems relegated to the larger O/D stations into PacNW. In addition, the high frequency AS pulls connecting traffic from all the small outstations.


You are aware that AS flies to Hawaii from 7 California airports too?


Not to be too picky, but what's the seventh airport? I count six (SFO, SJC, OAK, SMF, LAX, and SAN).

Re: Demise of WN in the PNW

Posted: Thu Sep 13, 2018 10:59 pm
by jagraham
Hawaii flying is not primarily O&D. Perhaps LA and Vegas could be made that way, but . .
As WN gets started in Hawaii, they need to fly from the places that have the most connections (OAK) or the most O&D (LAX). A case could be made for flying from ONT, but it doesn't make sense to fly from 2 airports in the LA area right now, so LAX is the better choice to start with.

Re: Demise of WN in the PNW

Posted: Fri Sep 14, 2018 12:22 am
by clickhappy
WN wanted to fly out of BFI, when the county told them no they started to downsize KSEA. This was 04-05 if my memory is correct.

Re: Demise of WN in the PNW

Posted: Fri Sep 14, 2018 2:18 am
by FA9295
USAirALB wrote:
My apologies if this has been discussed before (I'm sure it probably was already in some WN-related thread).

I seemed to recall that WN once had a somewhat robust intra-PNW network. I recall them flying:


GEG-PDX/SEA/SLC
SLC-BOI/RNO/SEA/PDX
PDX-BOI/RNO
BOI-SEA/RNO
RNO-SEA

What caused WN to discontinue these routes? Competition from AS/DL? I know within the last several years they seemed to distance themselves from shorter segments (some of the intra-Florida routes come to mind, like the discontinued TPA-PBI).

RNO-PDX was also flown at this time.

Re: Demise of WN in the PNW

Posted: Fri Sep 14, 2018 2:38 am
by n7371f
The cessation of intra-PNW flying coincided with spikes in oil and while WN was hedged mostly, the airline began pulling out of many 250 miles and under markets - not just in the Pac NW. WN's costs simply crept too high for the flying to work. Alaska was also a factor and their frequent flier pull in the markets.

Re: Demise of WN in the PNW

Posted: Fri Sep 14, 2018 3:15 am
by PlanesNTrains
n7371f wrote:
The cessation of intra-PNW flying coincided with spikes in oil and while WN was hedged mostly, the airline began pulling out of many 250 miles and under markets - not just in the Pac NW. WN's costs simply crept too high for the flying to work. Alaska was also a factor and their frequent flier pull in the markets.


Exactly.

Re: Demise of WN in the PNW

Posted: Fri Sep 14, 2018 4:52 am
by AirFiero
airzona11 wrote:
Varsity1 wrote:
Makes me wonder if AS is going to put a damp rag on WN's Hawaii ambitions. AS has a lower CASM on the -900ER's than anything WN owns.


But WN isn't flying from PacNW to Hawaii. AS 739 seats 178, WN 738 seats 175. AS operates many 738s to the islands as well. Not sure that is a big factor, WN is going to fly to the islands where they have a strong FF base. If CASM was the key to beating WN, every airline moved up from 73G sized planes but WN, that is their bread and butter.

PacNW is dominated by Seattle, then PDX, and is out of the way from everywhere else. This turns it into a strong hub position for AS. WN seems relegated to the larger O/D stations into PacNW. In addition, the high frequency AS pulls connecting traffic from all the small outstations.


I’ve been thinking for some time that for WN to continue growing, they will need another type other than the 737. An RJ/E jet type, to smaller markets. Work a deal with its pilots union that the regional jets are where the new pilots come online, then move up to 737s. Imagine how many new markets they’d be able to serve, and connecting them with their larger stations.

Single type is nice in many ways, but terribly limiting in many other ways.

Re: Demise of WN in the PNW

Posted: Fri Sep 14, 2018 4:55 am
by seabosdca
WN has certainly not been putting much effort into the market. I fly often out of SEA, and I always check WN when flying to a market where they're strong. It's been a long time since I found them price-competitive with either AS or US3 carriers for my flights.

Re: Demise of WN in the PNW

Posted: Fri Sep 14, 2018 5:06 am
by LAX772LR
Varsity1 wrote:
AS has a lower CASM on the -900ER's than anything WN owns.

How do you arrive at that conclusion?

Re: Demise of WN in the PNW

Posted: Fri Sep 14, 2018 6:02 am
by flyingclrs727
AirFiero wrote:
airzona11 wrote:
Varsity1 wrote:
Makes me wonder if AS is going to put a damp rag on WN's Hawaii ambitions. AS has a lower CASM on the -900ER's than anything WN owns.


But WN isn't flying from PacNW to Hawaii. AS 739 seats 178, WN 738 seats 175. AS operates many 738s to the islands as well. Not sure that is a big factor, WN is going to fly to the islands where they have a strong FF base. If CASM was the key to beating WN, every airline moved up from 73G sized planes but WN, that is their bread and butter.

PacNW is dominated by Seattle, then PDX, and is out of the way from everywhere else. This turns it into a strong hub position for AS. WN seems relegated to the larger O/D stations into PacNW. In addition, the high frequency AS pulls connecting traffic from all the small outstations.


I’ve been thinking for some time that for WN to continue growing, they will need another type other than the 737. An RJ/E jet type, to smaller markets. Work a deal with its pilots union that the regional jets are where the new pilots come online, then move up to 737s. Imagine how many new markets they’d be able to serve, and connecting them with their larger stations.

Single type is nice in many ways, but terribly limiting in many other ways.


Why not pick up E-jets for short range flying when lots airlines trade in for E2's? With Boeing now merging with Embraer, it would still have an all Boeing fleet.

Back when WN started up lots of airlines had very heterogeneous fleets, so having an extreme one type operational model was pretty revolutionary at the time. Today many airlines have subfleets larger than WN's 737 fleet prior to the 737-300. It's possible to operate several subfleets economically.

Re: Demise of WN in the PNW

Posted: Fri Sep 14, 2018 12:18 pm
by wedgetail737
Don't forget that WN and AS will be duking it out at PAE when that ever opens.

Re: Demise of WN in the PNW

Posted: Fri Sep 14, 2018 9:23 pm
by USAirKid
wedgetail737 wrote:
Don't forget that WN and AS will be duking it out at PAE when that ever opens.


Don't forget UA! (And its really a WN, QX, and UA slugfest.)

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 12:31 am
by ytib
USAirKid wrote:
wedgetail737 wrote:
Don't forget that WN and AS will be duking it out at PAE when that ever opens.


Don't forget UA! (And its really a WN, QX, and UA slugfest.)


Technically it is a WN, QX and UX slugfest, as the United flights will be E175's as well which like the AS flights are flown under a different certificate.

https://www.seattletimes.com/business/b ... aa-review/

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 1:00 am
by LotsaRunway
jagraham wrote:
Hawaii flying is not primarily O&D. Perhaps LA and Vegas could be made that way, but . .
As WN gets started in Hawaii, they need to fly from the places that have the most connections (OAK) or the most O&D (LAX). A case could be made for flying from ONT, but it doesn't make sense to fly from 2 airports in the LA area right now, so LAX is the better choice to start with.

In my opinion, it will be targeting O&D with some connecting traffic. Maybe I should call it “connection enhanced O&D.”

It will be interesting to see how much effort WN puts into scheduling connections. The margins have got to be pretty thin.

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 3:12 am
by jagraham
The reason for the emphasis on connections is Rapid Rewards. The greatest value any US based frequent flyer program can offer is a reward trip to Hawaii. The US3 does this and about half of Hawaii passengers are on reward trips. WN has known of this effect for some time and invested in American Trans Air to offer a way to Hawaii. Unfortunately American Trans Air went bankrupt shortly after the WN investment.

Most of the paid trips are vacationers from around the country. Perhaps 10% of travelers to Hawaii are military. About 100,000 passengers per year each way travel to Guam. There is a small amount of connecting traffic to Asia. The nature of Hawaii as an aspirational trip means that individuals and families around the country travel to Hawaii as they can arrange the trip, as opposed to travelers in a particular metro area traveling to Hawaii repeatedly because it is convenient.

These traffic patterns dictate that no area of the US dominates Hawaii travel and connections are critical.

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 4:40 am
by hiflyeras
I’d dispute the theory that half of Hawaii passengers are on miles. The airlines have total control over how many seats are available for redemption. Now WN on the other hand supposedly does NOT limit the number of redemptions per flight. They could be looking at their new Hawaii flights being a huge money loser if they’re carrying big percentages of non-paying passengers. It’s not like their rewards program offers very many exciting/exotic destinations.

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 5:58 am
by AirFiero
hiflyeras wrote:
I’d dispute the theory that half of Hawaii passengers are on miles. The airlines have total control over how many seats are available for redemption. Now WN on the other hand supposedly does NOT limit the number of redemptions per flight. They could be looking at their new Hawaii flights being a huge money loser if they’re carrying big percentages of non-paying passengers. It’s not like their rewards program offers very many exciting/exotic destinations.


This is what I’ve been wondering. Why invest significant resources into what would be a loss leader? Is the lure of Hawaii that much value to the rest of their system?

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 6:58 am
by ScottB
jagraham wrote:
WN has known of this effect for some time and invested in American Trans Air to offer a way to Hawaii. Unfortunately American Trans Air went bankrupt shortly after the WN investment.


Nope. WN partnered with ATA and invested in ATA in order to get some of ATA's gates at MDW and keep AirTran from getting those gates. AirTran had made an offer for all of ATA's MDW gates but WN offered a better deal which would have let ATA keep 8 of its 14 gates in conjunction with a codeshare with WN.

At the end, WN purchased some of ATA's assets in order to gain ATA's slots at LGA; this was how WN initially entered LGA with its own metal. Had the Hawaii service been so critical, WN could have chosen to restart those operations on the ATA certificate and ultimately merge those into their own.

jagraham wrote:
These traffic patterns dictate that no area of the US dominates Hawaii travel and connections are critical.


Again, nope. California alone accounts for over one-third of domestic visitors to O'ahu; California & Washington combined send about as many visitors to O'ahu as the entire Eastern & Central time zones in the U.S. More visitors come from Washington State than from Texas. More come from Arizona than from the entire state of New York. The West absolutely dominates demand to Hawaii.

USAirALB wrote:
Demise of WN in the PNW


At the risk of triggering some, is this "fake news?"

WN's domestic market share at PDX for the 12 months ending June 2007 was 18.42%, carrying just over 2.5 million passengers. For the 12 months ending June 2018, WN carried 3.44 million passengers at PDX with 18.69% domestic market share. WN's market share at both BOI and GEG dropped from 30% to 25% over the same period. At RNO, their share dropped from 50% to 44%. And while WN's share at SEA has dropped from 9.7% to 7.6%, they actually carry about 460K more passengers annually compared to 11 years ago.

A key problem is that the point-to-point markets in the PNW that don't touch SEA have always been very thin. Back in the old days, WN could do just fine with 60% load factors in those markets but that's just not true anymore. Much of the point-to-point QX flying is gone as well. And especially in SEA, it really hasn't been worth WN's while to fight AS for passengers given the County's response to WN's desire to move service to BFI.

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 1:10 pm
by wnflyguy
ScottB wrote:
jagraham wrote:
WN has known of this effect for some time and invested in American Trans Air to offer a way to Hawaii. Unfortunately American Trans Air went bankrupt shortly after the WN investment.


Nope. WN partnered with ATA and invested in ATA in order to get some of ATA's gates at MDW and keep AirTran from getting those gates. AirTran had made an offer for all of ATA's MDW gates but WN offered a better deal which would have let ATA keep 8 of its 14 gates in conjunction with a codeshare with WN.

At the end, WN purchased some of ATA's assets in order to gain ATA's slots at LGA; this was how WN initially entered LGA with its own metal. Had the Hawaii service been so critical, WN could have chosen to restart those operations on the ATA certificate and ultimately merge those into their own.

jagraham wrote:
These traffic patterns dictate that no area of the US dominates Hawaii travel and connections are critical.


Again, nope. California alone accounts for over one-third of domestic visitors to O'ahu; California & Washington combined send about as many visitors to O'ahu as the entire Eastern & Central time zones in the U.S. More visitors come from Washington State than from Texas. More come from Arizona than from the entire state of New York. The West absolutely dominates demand to Hawaii.

USAirALB wrote:
Demise of WN in the PNW


At the risk of triggering some, is this "fake news?"

WN's domestic market share at PDX for the 12 months ending June 2007 was 18.42%, carrying just over 2.5 million passengers. For the 12 months ending June 2018, WN carried 3.44 million passengers at PDX with 18.69% domestic market share. WN's market share at both BOI and GEG dropped from 30% to 25% over the same period. At RNO, their share dropped from 50% to 44%. And while WN's share at SEA has dropped from 9.7% to 7.6%, they actually carry about 460K more passengers annually compared to 11 years ago.

A key problem is that the point-to-point markets in the PNW that don't touch SEA have always been very thin. Back in the old days, WN could do just fine with 60% load factors in those markets but that's just not true anymore. Much of the point-to-point QX flying is gone as well. And especially in SEA, it really hasn't been worth WN's while to fight AS for passengers given the County's response to WN's desire to move service to BFI.


At the Time of ATA shut down WN was already in Future planning stages of get the 737-800NG ETOPS. Folding ATA non charter service into WN would have probably happened eventually. But once ATA Lost their huge Government military charter contract it was the end of the line for ATA. The shareholders saw more value in a fire sale vs another bailout from WN.
When The economy started to stall WN put a lot of things on hold and did cuts that were required to keep in the Black. The WN system started get a complete reset focused on profitable flying. Weaker markets like the short hop PNW got eliminated.
Turn out to be a better business move because now WN hold a good revenue standpoint in the markets it serves from PDX,GEG,SEA and BOI.

Flyguy

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 2:15 pm
by frmrCapCadet
hiflyeras wrote:
I’d dispute the theory that half of Hawaii passengers are on miles. The airlines have total control over how many seats are available for redemption. Now WN on the other hand supposedly does NOT limit the number of redemptions per flight. They could be looking at their new Hawaii flights being a huge money loser if they’re carrying big percentages of non-paying passengers. It’s not like their rewards program offers very many exciting/exotic destinations.


I believe that FF miles are carried on airlines books as a liability, and that liability is wiped out as FF miles are used. An accountant can explain it more accurately. WN expects all FF miles to be used, and strictly accounts for them. Flying to Hawaii will not be a money loser. They likely revamped their FF awards from how many trips your flew to how much you spent on those trips with Hawaii in mind. I have mentioned earlier that I expect WN occasionally make sure every passenger aboard was flying on FF miles - and publicize it to the hilt.

Here is my accounting explanation: When you fly and earn FF miles, the airline owes you some money. When you fly lots and lots they owe you a big bunch of money. So you fly your family to Hawaii with all those FF miles, and wipe out that pile of money the airline owed you. If flying your family to Hawaii costs less than what that pile of money was, then the airline made a profit flying all of you to Hawaii.

ps - some airlines don't want you to use those FF miles and keep changing the rules and the points needed, and make it hard to use the miles. WN expects and wants you to use your miles.

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 2:35 pm
by joeblow10
frmrCapCadet wrote:
hiflyeras wrote:
I’d dispute the theory that half of Hawaii passengers are on miles. The airlines have total control over how many seats are available for redemption. Now WN on the other hand supposedly does NOT limit the number of redemptions per flight. They could be looking at their new Hawaii flights being a huge money loser if they’re carrying big percentages of non-paying passengers. It’s not like their rewards program offers very many exciting/exotic destinations.


I believe that FF miles are carried on airlines books as a liability, and that liability is wiped out as FF miles are used. An accountant can explain it more accurately. WN expects all FF miles to be used, and strictly accounts for them. Flying to Hawaii will not be a money loser. They likely revamped their FF awards from how many trips your flew to how much you spent on those trips with Hawaii in mind. I have mentioned earlier that I expect WN occasionally make sure every passenger aboard was flying on FF miles - and publicize it to the hilt.


Frequent flyer miles are a bit unique: as a finance guy I'd probably call them "deferred revenue" (a current liability as you said), but even that's a bit odd. Deferred revenue generally refers to services you have paid for that the company must give you in the future such as subscriptions and gift cards. For example: you buy a 12 month subscription to a service. While the cash transaction on the sale is recognized for the entire period, the company must also acknowledge it owes you the services going forward, so the transaction also gets classified as a liability that gradually decreases until the service is completely used. Most of the time companies have some inherent value assigned to the potentially deferred revenue, like gift card balances or the ability to divide subscription price by its length.

Miles don't do that: sure the airline has some value they assign per mile, but in reality the potential use for them is much harder to estimate. And have you actually paid the company for them? Sure you "earned" them by flying, but its not like the airlines have to give them to you nor do you "have to" ever use them. All makes it very hard to quantify. One person may blow all their miles on a business select ticket for a short-haul flight, while others may use a bunch going on an international vacation of different value. Southwest probably has an easier time than other airlines because of the strict "$1 per XX amount of miles" formula Rapid Rewards uses, but I can't imagine trying to quantify it at Alaska for example where 40k miles can get you a one-way economy ticket on Qantas or a last minute First Class ticket from SEA-LAX.

Honestly I would imagine the companion pass to be more of a money "loser" on these routes than miles just because of the way the accounting works.

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 2:49 pm
by AirFiero
frmrCapCadet wrote:
hiflyeras wrote:
I’d dispute the theory that half of Hawaii passengers are on miles. The airlines have total control over how many seats are available for redemption. Now WN on the other hand supposedly does NOT limit the number of redemptions per flight. They could be looking at their new Hawaii flights being a huge money loser if they’re carrying big percentages of non-paying passengers. It’s not like their rewards program offers very many exciting/exotic destinations.


I believe that FF miles are carried on airlines books as a liability, and that liability is wiped out as FF miles are used. An accountant can explain it more accurately. WN expects all FF miles to be used, and strictly accounts for them. Flying to Hawaii will not be a money loser. They likely revamped their FF awards from how many trips your flew to how much you spent on those trips with Hawaii in mind. I have mentioned earlier that I expect WN occasionally make sure every passenger aboard was flying on FF miles - and publicize it to the hilt.

Here is my accounting explanation: When you fly and earn FF miles, the airline owes you some money. When you fly lots and lots they owe you a big bunch of money. So you fly your family to Hawaii with all those FF miles, and wipe out that pile of money the airline owed you. If flying your family to Hawaii costs less than what that pile of money was, then the airline made a profit flying all of you to Hawaii.

ps - some airlines don't want you to use those FF miles and keep changing the rules and the points needed, and make it hard to use the miles. WN expects and wants you to use your miles.


You have a point, but are you taking into account that FF miles almost always expire if not used? What is the redemption rate of FF at WN?

Re: Demise of WN in the PNW

Posted: Sat Sep 15, 2018 3:44 pm
by frmrCapCadet
Joe - thanks for that discussion. FF miles are complicated and I don't try to understand them. A friend who flies a lot out of Seattle quit Alaska and switched to Delta likely and largely because of FF complications and differences. I have observed that WN works at simplifying things, and tries to avoid complications that encourage 'gaming' the system.