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planecane
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Wed May 27, 2020 4:03 am

United1 wrote:
Midwestindy wrote:
hiflyeras wrote:
Great post. Anyone thinking that WN is going to escape the carnage coming in October is not paying attention. And even if they DO operate more departures in comparison to their competitors that just means they're operating more money-losing flights. Even at load factors of 60-70% no one would be making money unless the fares were outrageously expensive.


Every airline has said capping capacity is a very near-term solution, but even if it does get extended out, WN is the best positioned to compete in a low LF world.

Remember even though yield is down, Fuel/CapEX/Labor/Food is also down significantly, therefore WN could theoretically get fairly close to break even on their flights (at least compared to the US3)
Image


Yield is not just down it's utterly in the gutter...a few anecdotal points about that were even in this thread. A WN flyer was bragging about how he picked WN over UA on DAL-MDW because WNs fare was $90 roundtrip. The actual revenue to WN will be less if that fare includes taxes and fees but let's assume it's all revenue. That works out to 5.6 cents a mile. Do you think WN can generate a profit at that yield even flying 100% load factors?


I just flew FLL-MDW for $90 RT including taxes and fees. I'm pretty sure that's the cheapest RT I've flown in my adult life. I think the previous low was $98 RT FLL-TPA somewhere around 2003.

The flight to MDW had about 40 people on a 73G and the return was around 90 on a 738 (pretty close to the no middle seat capacity they are selling). No way those flights can be close to profitable.
 
Jetport
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Wed May 27, 2020 4:59 am

DarkSnowyNight wrote:

Have done. And very easily. And as for items requiring hands on for that, hiring locally and temporarily makes a lot more sense than utilizing roving personnel. In my experience, these things generally get easier, in terms of finding the most productive work-arounds as time goes by.

What a lot of travelers are not seeing here —likely and not unreasonably for reasons of personal interest— is that your employer really does not care about your concerns there. They will see that what ever "difficulties" people have with remote work are likely resulting more from user adaptation issues than anything structural to the system itself. What they do care about is the three to five times an average salary it costs to maintain an active traveling staff per capita.

There is already enough pressure to reduce those costs as it is. But when a company starts losing clients because they think clients value handshakes more than saving 20 -25% of a given cost, well, you see where this is going. FWIW, I do not see this as something caused by the current events so much as catalyzed by them. These advancements were inevitable.

And even with all that, there is still as much potential for productivity loss with in-person travel as well. That was fine in the past, but trying to justify that in the future will present a challenge.

I am certain there will still be an amount of business travel after this. After all, horses still remain in an age dominated by auto-traffic. But it will not be what it was.


I guess we will agree to disagree on the need for travel. There is an issue that has been festering for 2 months for me that I am sure if I could have traveled to Europe from the US I could have solved it and already saved over $100k in claims.

As for your "three to five times an average salary it costs to maintain an active traveling staff per capita" figures all I can say is either the salaries are really low or the folks in this study must travel first class and stay at only the finest hotels. I have traveled from 50% - 75% for over 20 years and most years my travel costs are 30% to 40% of my salary. I think my highest year was about 50%. Even assuming my salary is far above average and I traveled 100%, I would really have to try hard to get to 3X to 5X an average salary in my industry with travel costs, though it would be fun trying.
 
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Midwestindy
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 3:35 pm

So much for those saying WN isn't planning on being aggressive:

https://www.swamedia.com/releases/relea ... jan-4-2021

"Never before has Southwest been more primed to emerge as the preferred choice of corporate travel as the business climate across America begins its recovery"
"We're rounding out our plan for this unprecedented year with our business travelers in mind with a fourth quarter schedule that brings them new routes across the country. We're also offering more flights for all of our Customers in places such as Denver, Las Vegas, Nashville, and Phoenix"
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
incitatus
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 8:22 pm

Midwestindy wrote:
So much for those saying WN isn't planning on being aggressive:

https://www.swamedia.com/releases/relea ... jan-4-2021

"Never before has Southwest been more primed to emerge as the preferred choice of corporate travel as the business climate across America begins its recovery"
"We're rounding out our plan for this unprecedented year with our business travelers in mind with a fourth quarter schedule that brings them new routes across the country. We're also offering more flights for all of our Customers in places such as Denver, Las Vegas, Nashville, and Phoenix"


Not sure. They have relative financial strength. But Southwest's limitations and it success as a simpler/profitable business are closely related. Compared to other airlines, Southwest's offering lacks some attractive features. For flights that are longer than 3 hours, their seats are quite uncomfortable. In these longer markets they often lack frequency to compete with DL/UA/AA. First class and seat assignments are also more important for longer flights. Then there is its network limitations. Their presence abroad is small, and they do not have small aircraft to serve smaller markets. The inability to offer red-eyes is a small handicap (Try HNL-HOU on Southwest).

Then there is how COVID will impact Southwest. A significant portion of Southwest's strength is derived from short-haul markets (e.g., intra-Texas & intra-California) in which driving is a real alternative. If people keep on avoiding air travel to lessen their exposure, shorter haul markets will be more impacted because of the substitute.

Let's not forget: History does not repeat itself. Southwest is used to winning and many that already posted here see a sense of invincibility. Confidence on past success may lead to Southwest missing the target in the future. The present is unlike anything Southwest has seen before.
I do not consume Murdoch products including the Wall Street Journal
 
CRJ5000
Posts: 146
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 8:44 pm

Bold move, but fortune favors the bold. Glad to see some positive news.
Heres another article from TPG. Full schedule... I like it and hope it works out for them.
Non legacies definitely seem to have the upper hand right now.

https://thepointsguy.com/news/southwest ... -schedule/
 
strfyr51
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 9:09 pm

tphuang wrote:
Isn't this kind of obvious? WN got a huge war chest and very little debt. They can sustain a money losing competition for a while to capture market share and build new fortress hubs. Many easy moves for them to make:
- Acquire smaller airlines to either eliminate competitor (NK), add slots (B6) or get gates at relevant airports (AS/F9/B6)
- build back up and then expand in DEN while UA is slowly adding back capacity. That's gotta be there number 1 priority in their domestic work.
- Add gates at LAX to take advantage of AA/UA cuts there
- Acquire/lease more slots at LGA/DCA from financially weak carriers of AA/UA
- If AA cuts back significantly at PHX, take advantage of that to become largest carrier at PHX
- Expand in SFO if UA cuts back there

I would be very worried about WN if I am one of their competitors. They will be close to their pre-COVID capacity by next summer imo.

And it's not just WN that can take advantage of legacy carriers cutting back.
Things are wide open for B6 in NYC. JFK will have more slots, EWR will have more gates open and LGA will most likely have some slots available. BOS will be wide open.
AS will be able to expand at SFO if they want.
NK is going to look to grow at LGA and EWR. It will grow at South Florida where everyone else is cutting back.
All the ULCCs will capture more of the leisure market.

DL management has told their employees that yield will be trash until 2022. High yielding international and corporate stuff will be slow to return. The stuff that will come back first are the leisure stuff. All of which favors non-legacy carriers.

add gates at LAX? Where? and where do you propose they get all this extra capacity and gate space? Unless you think other carriers are just going to shrink back just because WN is coming, Have they Been running from WN? the LCC's will get what they get, Were UA or AA or even DL to try and muscle them out? You and I both Know there'd be Lawsuits all over the place talking about "Predatory" tactics. WN can't do anything you espouse.. You're wishing!
 
strfyr51
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 9:14 pm

the VP of flight ops? If he was stupid enough to say that out loud? He could set WN up for anything they did or caused at the smaller carriers. A businessman NEVER divulges strategy like that! And a VP? A dime a Dozen! An SVP or EVP? I might listen, But a VP? Isn't even a good director.
 
tphuang
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 9:38 pm

strfyr51 wrote:
tphuang wrote:
Isn't this kind of obvious? WN got a huge war chest and very little debt. They can sustain a money losing competition for a while to capture market share and build new fortress hubs. Many easy moves for them to make:
- Acquire smaller airlines to either eliminate competitor (NK), add slots (B6) or get gates at relevant airports (AS/F9/B6)
- build back up and then expand in DEN while UA is slowly adding back capacity. That's gotta be there number 1 priority in their domestic work.
- Add gates at LAX to take advantage of AA/UA cuts there
- Acquire/lease more slots at LGA/DCA from financially weak carriers of AA/UA
- If AA cuts back significantly at PHX, take advantage of that to become largest carrier at PHX
- Expand in SFO if UA cuts back there

I would be very worried about WN if I am one of their competitors. They will be close to their pre-COVID capacity by next summer imo.

And it's not just WN that can take advantage of legacy carriers cutting back.
Things are wide open for B6 in NYC. JFK will have more slots, EWR will have more gates open and LGA will most likely have some slots available. BOS will be wide open.
AS will be able to expand at SFO if they want.
NK is going to look to grow at LGA and EWR. It will grow at South Florida where everyone else is cutting back.
All the ULCCs will capture more of the leisure market.

DL management has told their employees that yield will be trash until 2022. High yielding international and corporate stuff will be slow to return. The stuff that will come back first are the leisure stuff. All of which favors non-legacy carriers.

add gates at LAX? Where? and where do you propose they get all this extra capacity and gate space? Unless you think other carriers are just going to shrink back just because WN is coming, Have they Been running from WN? the LCC's will get what they get, Were UA or AA or even DL to try and muscle them out? You and I both Know there'd be Lawsuits all over the place talking about "Predatory" tactics. WN can't do anything you espouse.. You're wishing!


UA/AA will both shrink at LAX coming out of this. Gates are going to become available. Amongst major carriers at LAX, who do you think will likely get back to pre-COVID capacity the soonest? LAWA looks at gate utilization next summer and the WN is using theirs 10x daily and AA/UA are using their 4x daily. What do you think will happen there?

btw, I'm not a WN fanboy. I just think they will do really well coming out of this.
 
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Midwestindy
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 9:49 pm

strfyr51 wrote:
the VP of flight ops? If he was stupid enough to say that out loud? He could set WN up for anything they did or caused at the smaller carriers. A businessman NEVER divulges strategy like that! And a VP? A dime a Dozen! An SVP or EVP? I might listen, But a VP? Isn't even a good director.


I mean they aren't really trying to hide anything, they even announced growing capacity by 10% in DEN, PHX, & LAS today
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
tphuang
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 9:50 pm

Midwestindy wrote:
strfyr51 wrote:
the VP of flight ops? If he was stupid enough to say that out loud? He could set WN up for anything they did or caused at the smaller carriers. A businessman NEVER divulges strategy like that! And a VP? A dime a Dozen! An SVP or EVP? I might listen, But a VP? Isn't even a good director.


I mean they aren't really trying to hide anything, they even announced growing capacity by 10% in DEN, PHX, & LAS today


Do you have any link on this?
 
SWADawg
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 9:53 pm

tphuang wrote:
Midwestindy wrote:
strfyr51 wrote:
the VP of flight ops? If he was stupid enough to say that out loud? He could set WN up for anything they did or caused at the smaller carriers. A businessman NEVER divulges strategy like that! And a VP? A dime a Dozen! An SVP or EVP? I might listen, But a VP? Isn't even a good director.


I mean they aren't really trying to hide anything, they even announced growing capacity by 10% in DEN, PHX, & LAS today


Do you have any link on this?

New schedule release through January 4, 2021. Full schedule planned by December.
My posts are my opinion only and do not reflect the views of Southwest Airlines
 
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Midwestindy
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 10:01 pm

SWADawg wrote:
tphuang wrote:
Midwestindy wrote:

I mean they aren't really trying to hide anything, they even announced growing capacity by 10% in DEN, PHX, & LAS today


Do you have any link on this?

New schedule release through January 4, 2021. Full schedule planned by December.


Yeah,

"On Thursday, the Dallas-based carrier extended its schedule through Jan. 4, 2021. The plans call for about as many flights as it flew at the end of 2019 by the end of this year. That includes growing the number of available seats for sale by 10% or more at its bases in Denver (DEN), Las Vegas (LAS), Nashville (BNA) and Phoenix (PHX)."

https://thepointsguy.com/news/southwest ... -schedule/

Now will they run all these flights? That remains to be seen, but the fact that they are announcing it at all shows they have some guts.
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
ShinyAndChrome
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 10:08 pm

Midwestindy wrote:
SWADawg wrote:
tphuang wrote:

Do you have any link on this?

New schedule release through January 4, 2021. Full schedule planned by December.


Yeah,

"On Thursday, the Dallas-based carrier extended its schedule through Jan. 4, 2021. The plans call for about as many flights as it flew at the end of 2019 by the end of this year. That includes growing the number of available seats for sale by 10% or more at its bases in Denver (DEN), Las Vegas (LAS), Nashville (BNA) and Phoenix (PHX)."

https://thepointsguy.com/news/southwest ... -schedule/

Now will they run all these flights? That remains to be seen, but the fact that they are announcing it at all shows they have some guts.


That last part will be key. We're not even in June yet, so December schedules are far from gospel at this point.

I get that WN is very well run and they're structurally the best-suited carrier to handle a situation like this but actually expecting to run their full 2019 schedule seems insane at this point.
 
0newair0
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Thu May 28, 2020 10:25 pm

Personally, I think everyone is putting way to much effort into analyzing any of this. Basically what they are doing is putting a normal demand schedule "out for sale" in for Q4 and seeing where the chips fall. If the flights start filling up as we move towards winter then great... but if they don't, don't bet for one second that they won't start pulling flights left and right.
That's not how this works! That's not how any of this works!
 
gaystudpilot
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sat May 30, 2020 7:43 pm

0newair0 wrote:
Personally, I think everyone is putting way to much effort into analyzing any of this. Basically what they are doing is putting a normal demand schedule "out for sale" in for Q4 and seeing where the chips fall. If the flights start filling up as we move towards winter then great... but if they don't, don't bet for one second that they won't start pulling flights left and right.


This.
 
onwFan
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sat May 30, 2020 11:12 pm

tphuang wrote:
strfyr51 wrote:
tphuang wrote:
Isn't this kind of obvious? WN got a huge war chest and very little debt. They can sustain a money losing competition for a while to capture market share and build new fortress hubs. Many easy moves for them to make:
- Acquire smaller airlines to either eliminate competitor (NK), add slots (B6) or get gates at relevant airports (AS/F9/B6)
- build back up and then expand in DEN while UA is slowly adding back capacity. That's gotta be there number 1 priority in their domestic work.
- Add gates at LAX to take advantage of AA/UA cuts there
- Acquire/lease more slots at LGA/DCA from financially weak carriers of AA/UA
- If AA cuts back significantly at PHX, take advantage of that to become largest carrier at PHX
- Expand in SFO if UA cuts back there

I would be very worried about WN if I am one of their competitors. They will be close to their pre-COVID capacity by next summer imo.

And it's not just WN that can take advantage of legacy carriers cutting back.
Things are wide open for B6 in NYC. JFK will have more slots, EWR will have more gates open and LGA will most likely have some slots available. BOS will be wide open.
AS will be able to expand at SFO if they want.
NK is going to look to grow at LGA and EWR. It will grow at South Florida where everyone else is cutting back.
All the ULCCs will capture more of the leisure market.

DL management has told their employees that yield will be trash until 2022. High yielding international and corporate stuff will be slow to return. The stuff that will come back first are the leisure stuff. All of which favors non-legacy carriers.

add gates at LAX? Where? and where do you propose they get all this extra capacity and gate space? Unless you think other carriers are just going to shrink back just because WN is coming, Have they Been running from WN? the LCC's will get what they get, Were UA or AA or even DL to try and muscle them out? You and I both Know there'd be Lawsuits all over the place talking about "Predatory" tactics. WN can't do anything you espouse.. You're wishing!


UA/AA will both shrink at LAX coming out of this. Gates are going to become available. Amongst major carriers at LAX, who do you think will likely get back to pre-COVID capacity the soonest? LAWA looks at gate utilization next summer and the WN is using theirs 10x daily and AA/UA are using their 4x daily. What do you think will happen there?

btw, I'm not a WN fanboy. I just think they will do really well coming out of this.

I am not convinced that the schedules this month or next month are in any way indicative of airlines’ plans for the future. As for LAX, most airlines are going to hesitate giving up their presence. For AA, they might think about extending some cuts till the MSC is open, when they will have the entire T5 to themselves; so that they don’t have to operate the Eagle’s nest. It makes little sense for them to forgo that opportunity, even if it means shrinking PHX. Because that is their only chance of a West Coast hub. DL and UA already have SEA and SFO. UA’s LAX operation is already mostly O&D.

Also, I don’t see Southwest wanting to suddenly jump on the opportunity and run an operation from 4 gates in T4 and 4 gates in T8, especially when there is no guarantee that there will be enough demand for all flights from T1 itself. Also, no airlines are going to move at this time to help WN consolidate. AA has the most to lose giving up LAX, then DL, then UA.
 
tphuang
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sun May 31, 2020 1:07 am

onwFan wrote:
tphuang wrote:
strfyr51 wrote:
add gates at LAX? Where? and where do you propose they get all this extra capacity and gate space? Unless you think other carriers are just going to shrink back just because WN is coming, Have they Been running from WN? the LCC's will get what they get, Were UA or AA or even DL to try and muscle them out? You and I both Know there'd be Lawsuits all over the place talking about "Predatory" tactics. WN can't do anything you espouse.. You're wishing!


UA/AA will both shrink at LAX coming out of this. Gates are going to become available. Amongst major carriers at LAX, who do you think will likely get back to pre-COVID capacity the soonest? LAWA looks at gate utilization next summer and the WN is using theirs 10x daily and AA/UA are using their 4x daily. What do you think will happen there?

btw, I'm not a WN fanboy. I just think they will do really well coming out of this.

I am not convinced that the schedules this month or next month are in any way indicative of airlines’ plans for the future. As for LAX, most airlines are going to hesitate giving up their presence. For AA, they might think about extending some cuts till the MSC is open, when they will have the entire T5 to themselves; so that they don’t have to operate the Eagle’s nest. It makes little sense for them to forgo that opportunity, even if it means shrinking PHX. Because that is their only chance of a West Coast hub. DL and UA already have SEA and SFO. UA’s LAX operation is already mostly O&D.

Also, I don’t see Southwest wanting to suddenly jump on the opportunity and run an operation from 4 gates in T4 and 4 gates in T8, especially when there is no guarantee that there will be enough demand for all flights from T1 itself. Also, no airlines are going to move at this time to help WN consolidate. AA has the most to lose giving up LAX, then DL, then UA.


You are thinking of things in terms of pre-COVID environment. Post-COVID is going to change a lot o things. AA will bring back DFW/CLT rather quickly and possibly expand DFW to 900 to 1000 flights a day before bringing other hubs to even 75% of their pre-COVID schedule. Stations like LAX, LGA, JFK and MIA that depend on international stuff and/or were already underperforming pre-COVID are going to take long time to come back if at all.

We are already seeing WN applying pressure on AA at PHX.

As for LAX itself, AA is not bringing back PEK/PVG imo. What's the point of having TPAC hub when it only flies to HND/SYD? AA simply doesn't have the resources to maintain a huge money draining west coast hub like DL does. UA is going to consolidate to SFO.

LAX just isn't going to be as crowded for a while.
 
tphuang
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Joined: Tue Mar 14, 2017 2:04 pm

Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sun May 31, 2020 1:07 am

onwFan wrote:
tphuang wrote:
strfyr51 wrote:
add gates at LAX? Where? and where do you propose they get all this extra capacity and gate space? Unless you think other carriers are just going to shrink back just because WN is coming, Have they Been running from WN? the LCC's will get what they get, Were UA or AA or even DL to try and muscle them out? You and I both Know there'd be Lawsuits all over the place talking about "Predatory" tactics. WN can't do anything you espouse.. You're wishing!


UA/AA will both shrink at LAX coming out of this. Gates are going to become available. Amongst major carriers at LAX, who do you think will likely get back to pre-COVID capacity the soonest? LAWA looks at gate utilization next summer and the WN is using theirs 10x daily and AA/UA are using their 4x daily. What do you think will happen there?

btw, I'm not a WN fanboy. I just think they will do really well coming out of this.

I am not convinced that the schedules this month or next month are in any way indicative of airlines’ plans for the future. As for LAX, most airlines are going to hesitate giving up their presence. For AA, they might think about extending some cuts till the MSC is open, when they will have the entire T5 to themselves; so that they don’t have to operate the Eagle’s nest. It makes little sense for them to forgo that opportunity, even if it means shrinking PHX. Because that is their only chance of a West Coast hub. DL and UA already have SEA and SFO. UA’s LAX operation is already mostly O&D.

Also, I don’t see Southwest wanting to suddenly jump on the opportunity and run an operation from 4 gates in T4 and 4 gates in T8, especially when there is no guarantee that there will be enough demand for all flights from T1 itself. Also, no airlines are going to move at this time to help WN consolidate. AA has the most to lose giving up LAX, then DL, then UA.


You are thinking of things in terms of pre-COVID environment. Post-COVID is going to change a lot o things. AA will bring back DFW/CLT rather quickly and possibly expand DFW to 900 to 1000 flights a day before bringing other hubs to even 75% of their pre-COVID schedule. Stations like LAX, LGA, JFK and MIA that depend on international stuff and/or were already underperforming pre-COVID are going to take long time to come back if at all.

We are already seeing WN applying pressure on AA at PHX.

As for LAX itself, AA is not bringing back PEK/PVG imo. What's the point of having TPAC hub when it only flies to HND/SYD? AA simply doesn't have the resources to maintain a huge money draining west coast hub like DL does. UA is going to consolidate to SFO.

LAX just isn't going to be as crowded for a while.

btw, I'm surprised WN cut as much as it did from LAX for their full schedule extension.
 
onwFan
Posts: 438
Joined: Wed Feb 03, 2016 4:02 am

Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sun May 31, 2020 3:30 am

tphuang wrote:
onwFan wrote:
tphuang wrote:

UA/AA will both shrink at LAX coming out of this. Gates are going to become available. Amongst major carriers at LAX, who do you think will likely get back to pre-COVID capacity the soonest? LAWA looks at gate utilization next summer and the WN is using theirs 10x daily and AA/UA are using their 4x daily. What do you think will happen there?

btw, I'm not a WN fanboy. I just think they will do really well coming out of this.

I am not convinced that the schedules this month or next month are in any way indicative of airlines’ plans for the future. As for LAX, most airlines are going to hesitate giving up their presence. For AA, they might think about extending some cuts till the MSC is open, when they will have the entire T5 to themselves; so that they don’t have to operate the Eagle’s nest. It makes little sense for them to forgo that opportunity, even if it means shrinking PHX. Because that is their only chance of a West Coast hub. DL and UA already have SEA and SFO. UA’s LAX operation is already mostly O&D.

Also, I don’t see Southwest wanting to suddenly jump on the opportunity and run an operation from 4 gates in T4 and 4 gates in T8, especially when there is no guarantee that there will be enough demand for all flights from T1 itself. Also, no airlines are going to move at this time to help WN consolidate. AA has the most to lose giving up LAX, then DL, then UA.


You are thinking of things in terms of pre-COVID environment. Post-COVID is going to change a lot o things. AA will bring back DFW/CLT rather quickly and possibly expand DFW to 900 to 1000 flights a day before bringing other hubs to even 75% of their pre-COVID schedule. Stations like LAX, LGA, JFK and MIA that depend on international stuff and/or were already underperforming pre-COVID are going to take long time to come back if at all.

We are already seeing WN applying pressure on AA at PHX.

As for LAX itself, AA is not bringing back PEK/PVG imo. What's the point of having TPAC hub when it only flies to HND/SYD? AA simply doesn't have the resources to maintain a huge money draining west coast hub like DL does. UA is going to consolidate to SFO.

LAX just isn't going to be as crowded for a while.

btw, I'm surprised WN cut as much as it did from LAX for their full schedule extension.

I believe the reason is the other angle of the post-COVID world: the extremely low demand is affecting all the carriers equally - with carriers not even being able to sustain their own networks, it is not exactly easy to take advantage of the situation & squeeze out other carriers.

That being said, I do see that WN is (and will most probably continue) trying to squeeze AA in PHX; since they know that is a safe move that will result in the least retaliation: because they know that PHX is AA’s least strategically important hub... Interestingly, AA has over the last two years been gradually replicating almost the entire PHX network from DFW (whatever the intention was). So I doubt AA is going to worry much about WN’s moves in PHX.

Another important angle to the same situation is that if the AA/AS partnership kicks off, that will provide short haul from the west coast (to places west of DFW and ORD) through non-stop AS options, diminishing the need for PHX: things like west coast to DEN/SLC/PHX/LAS/ABQ/RNO, etc. (not that PH was strategically located like DEN or SLC to capture this traffic anyway).

As for LAX, it is not there just for the AA flights. Their feed for the 2 daily flights to China is minor when compared to all their JV and oneworld flights: 5x daily to TYO/KIX, 4x daily to HKG, 2x daily flights to CAN, and all the 5-6x daily flights to SYD, MEL, BNE and AKL. On top of that, they codeshare and feed the 2-3 daily flights offered by FJ and TN. LAX has a strategic meaning in AA’s network and cutting LAX will significantly weaken the relevance of both their transpacific JVs.
 
jayunited
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sun May 31, 2020 1:20 pm

Several people have pointed to The Points Guy article which just a few days ago boldly stated WN would fly their FULL schedule this winter and WN expected to fly the same number of flights as they did in winter 2019. Yesterday The Points Guy posted a revision to their original article. Yesterdays article is titled Southwest Cuts more than 100 routes from it "FULL" Winter Schedule.

In the article TPG points out 35 international routes are gone, which means 65 domestic routes will be suspended as well. According to the updated TPG article stations that might see the biggest cuts are FLL, where WN will end some international service but also suspend nonstop service to several domestic destinations (please see the article for the list). A few of WN's transcontinental routes out of LAX will be axed in favor of more connections (again see article for full list). Stay out on the West Coast the article stated WN will end some nonstop service on the West coast an example of SAN-PDX was given. Instead of flying nonstop SAN-PDX passengers will now have to make a connection at OAK. It isn't all bad news but as a result of WN cutting 65 domestic nonstop routes the article pointed out WN plans to increase flights at both PDX and DEN this coming winter. Denver should see a modest 16% increase this winter verses 2019 as WN plans to force more passengers to make connections at these airports.

Although no airlines has finalized their winter 2020 schedule it does seem as though WN is not as immune to COVID-19 as many people would have us believe. I applaud WN they put on a united front this past week and for a moment it did seem like WN would be back to full strength later this year. I'm sure WN was hoping those 100 missing routes would go unnoticed. The truth is no matter what airline people work for or what airline they fly everyone will feel the pain of COVID-19 for for years to come.

https://thepointsguy.com/news/southwest ... -schedule/
 
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Midwestindy
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sun May 31, 2020 1:42 pm

jayunited wrote:
Several people have pointed to The Points Guy article which just a few days ago boldly stated WN would fly their FULL schedule this winter and WN expected to fly the same number of flights as they did in winter 2019. Yesterday The Points Guy posted a revision to their original article. Yesterdays article is titled Southwest Cuts more than 100 routes from it "FULL" Winter Schedule.

In the article TPG points out 35 international routes are gone, which means 65 domestic routes will be suspended as well. According to the updated TPG article stations that might see the biggest cuts are FLL, where WN will end some international service but also suspend nonstop service to several domestic destinations (please see the article for the list). A few of WN's transcontinental routes out of LAX will be axed in favor of more connections (again see article for full list). Stay out on the West Coast the article stated WN will end some nonstop service on the West coast an example of SAN-PDX was given. Instead of flying nonstop SAN-PDX passengers will now have to make a connection at OAK. It isn't all bad news but as a result of WN cutting 65 domestic nonstop routes the article pointed out WN plans to increase flights at both PDX and DEN this coming winter. Denver should see a modest 16% increase this winter verses 2019 as WN plans to force more passengers to make connections at these airports.

Although no airlines has finalized their winter 2020 schedule it does seem as though WN is not as immune to COVID-19 as many people would have us believe. I applaud WN they put on a united front this past week and for a moment it did seem like WN would be back to full strength later this year. I'm sure WN was hoping those 100 missing routes would go unnoticed. The truth is no matter what airline people work for or what airline they fly everyone will feel the pain of COVID-19 for for years to come.

https://thepointsguy.com/news/southwest ... -schedule/


Well the article says that its only a 1.5% drop in flights, so that is pretty much a full schedule

They also added a number of flights that weren't reported, IND-STL, DEN-CLT, and likely more.

A lot of those cuts have been announced already: PIT-LAX, OKC-DAL, e.t.c, or they were international so not that many cuts altogether

They also said this a couple days ago:

“It’s a reasonable proposition that even if demand as an industry is not fully back, we can still have enough demand for Southwest to be the same size airline,” Watterson said.
https://skift.com/2020/05/29/a-mostly-d ... s-for-now/
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tphuang
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sun May 31, 2020 6:13 pm

I've read some estimates that demand will be back to more like 50% level for Q4 of this year. Hard to imagine WN can run this "full schedule" at that time. If we don't get to at least 70% of pre-COVID demand, I think WN will have to continue to trim their schedule.
 
jayunited
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sun May 31, 2020 6:31 pm

Midwestindy wrote:

Well the article says that its only a 1.5% drop in flights, so that is pretty much a full schedule

They also added a number of flights that weren't reported, IND-STL, DEN-CLT, and likely more.

A lot of those cuts have been announced already: PIT-LAX, OKC-DAL, e.t.c, or they were international so not that many cuts altogether

They also said this a couple days ago:

“It’s a reasonable proposition that even if demand as an industry is not fully back, we can still have enough demand for Southwest to be the same size airline,” Watterson said.
https://skift.com/2020/05/29/a-mostly-d ... s-for-now/


The TPG article is focusing on routes 100 routes we have to still wait and see how many flight that translates into. The article shows WN is vulnerable as well, they are suspending routes out of FLL both domestic and international we will have to wait and see if NK can capitalize there, WN is also suspending a few nonstop transcon routes out of LAX instead WN passengers will now have to connect at either PHX or DEN, now an airline like DL has a advantage at LAX. Take for example the article highlighted WN will suspend nonstop service LAX-ATL. For passengers who have become accustom to nonstop flights WN will no longer be an option the question is will DL be able to to capitalize on WN's suspension.

What I took from the second TPG article was WN will increase the number of connecting flights will reducing the number of nonstop flights. Reducing nonstop options does create an opening for airlines like DL, AA, UA, NK, and TPG even points out on the West Coast AS now has opportunity with WN wanting more passengers to connect at OAK.

What is clear is every airline will need to strategic moving forward if they are to survive. WN can take on everyone at every location and win, they are cutting routes we still don't know how many flights it equates into.
 
onwFan
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sun May 31, 2020 7:29 pm

jayunited wrote:
Midwestindy wrote:

Well the article says that its only a 1.5% drop in flights, so that is pretty much a full schedule

They also added a number of flights that weren't reported, IND-STL, DEN-CLT, and likely more.

A lot of those cuts have been announced already: PIT-LAX, OKC-DAL, e.t.c, or they were international so not that many cuts altogether

They also said this a couple days ago:

“It’s a reasonable proposition that even if demand as an industry is not fully back, we can still have enough demand for Southwest to be the same size airline,” Watterson said.
https://skift.com/2020/05/29/a-mostly-d ... s-for-now/


The TPG article is focusing on routes 100 routes we have to still wait and see how many flight that translates into. The article shows WN is vulnerable as well, they are suspending routes out of FLL both domestic and international we will have to wait and see if NK can capitalize there, WN is also suspending a few nonstop transcon routes out of LAX instead WN passengers will now have to connect at either PHX or DEN, now an airline like DL has a advantage at LAX. Take for example the article highlighted WN will suspend nonstop service LAX-ATL. For passengers who have become accustom to nonstop flights WN will no longer be an option the question is will DL be able to to capitalize on WN's suspension.

What I took from the second TPG article was WN will increase the number of connecting flights will reducing the number of nonstop flights. Reducing nonstop options does create an opening for airlines like DL, AA, UA, NK, and TPG even points out on the West Coast AS now has opportunity with WN wanting more passengers to connect at OAK.

What is clear is every airline will need to strategic moving forward if they are to survive. WN can take on everyone at every location and win, they are cutting routes we still don't know how many flights it equates into.

I guess that means we shouldn’t expect to hear news about Concourse 0 at LAX anytime in the near future?
 
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sun May 31, 2020 8:10 pm

jayunited wrote:
Midwestindy wrote:

Well the article says that its only a 1.5% drop in flights, so that is pretty much a full schedule

They also added a number of flights that weren't reported, IND-STL, DEN-CLT, and likely more.

A lot of those cuts have been announced already: PIT-LAX, OKC-DAL, e.t.c, or they were international so not that many cuts altogether

They also said this a couple days ago:

“It’s a reasonable proposition that even if demand as an industry is not fully back, we can still have enough demand for Southwest to be the same size airline,” Watterson said.
https://skift.com/2020/05/29/a-mostly-d ... s-for-now/


The TPG article is focusing on routes 100 routes we have to still wait and see how many flight that translates into. The article shows WN is vulnerable as well, they are suspending routes out of FLL both domestic and international we will have to wait and see if NK can capitalize there, WN is also suspending a few nonstop transcon routes out of LAX instead WN passengers will now have to connect at either PHX or DEN, now an airline like DL has a advantage at LAX. Take for example the article highlighted WN will suspend nonstop service LAX-ATL. For passengers who have become accustom to nonstop flights WN will no longer be an option the question is will DL be able to to capitalize on WN's suspension.

What I took from the second TPG article was WN will increase the number of connecting flights will reducing the number of nonstop flights. Reducing nonstop options does create an opening for airlines like DL, AA, UA, NK, and TPG even points out on the West Coast AS now has opportunity with WN wanting more passengers to connect at OAK.

What is clear is every airline will need to strategic moving forward if they are to survive. WN can take on everyone at every location and win, they are cutting routes we still don't know how many flights it equates into.


No they explicitly say its 1.5% less flights

Image

FLL is being cut for obvious reasons, cruise traffic is expected to be way down

The openings created by WN are relatively small compared to what others carriers have done (and likely will do) with their network
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FLALEFTY
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Sun May 31, 2020 11:48 pm

A few observations about WN's route map in the near future:

1) Keep an eye on STL. Operationally WN is maxed out at MDW, but they do need a bigger midwest hub east of Denver & north of Texas. STL has all the infrastructure to support a full WN hub.
2) FLL's route cuts are likely permanent. They are pulling back from their Carribean and Central American routes and probably won't restore them. The other FLL routes cut were designed to feed those international flights. Strategically, WN works best as a domestic airline.
3) The trimming of some of the transcon routes will allow WN to ease away from having too many 5/6 hour flight legs that mess with their crew productivity goals. It appears that most remaining transcon routes will be "hub to hub".
4) Not sure what is going to happen to their Hawaiian operations. The long ETOPS legs back to LAX and OAK are low-yield routes with many FF's flying their families on cashed-in points they have accumulated.
5) Keep an eye on WN starting to move away from competing directly with AS on the west coast. Could we be seeing the seeds of a strategy to eventually merge with AS in the near future?
 
jayunited
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 01, 2020 12:41 am

Midwestindy wrote:

No they explicitly say its 1.5% less flights
FLL is being cut for obvious reasons, cruise traffic is expected to be way down

The openings created by WN are relatively small compared to what others carriers have done (and likely will do) with their network


All airlines are currently selling their "full" schedule but I know UA has no intention of flying our FULL schedule. It is obvious WN is looking to take on UA at DEN and AA at PHX which is to be expected but there is no way WN can take on the entire US aviation industry and win. No airline has completely finalized their winter 2020 schedule we will just have just wait and see which flights actually operate verses what they expect to operate.

One thing UA's Kirby talks about is the unemployment rate and how a high unemployment rate is not good for airlines. We know from the latest numbers 40 million Americans are currently out of work. However there are many more we don't know about because they haven't been able to get through to file for unemployment insurance. I get what WN is saying and their executives are experts while I'm nothing more than a armchair observer whose opinion doesn't matter . But if you believe WN will operate nearly the same number of flights during winter 2020 as they did during winter 2019 with 40+ million Americans out of work then I don't know what to say except I don't see it.

WN will recover faster than AA, DL and UA that is not my argument but a FULL recovery by winter 2020 I don't see it especially when the entire industry (worldwide) is saying it will take years to recover.
 
tphuang
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 01, 2020 12:46 am

Even if Southwest is operating a 80% schedule by December, they will be recovering much faster than all other airlines. It's too early to know the demand at least nd of the year. Without that, it's hard to say how much Southwest will really fly
 
ytib
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 01, 2020 1:36 am

FLALEFTY wrote:
A few observations about WN's route map in the near future:

4) Not sure what is going to happen to their Hawaiian operations. The long ETOPS legs back to LAX and OAK are low-yield routes with many FF's flying their families on cashed-in points they have accumulated.


The redemption of points to Hawaii is not really a hit to them as the way Southwest handles the values. The points required to obtain a ticket is tied directly to the cost of the ticket, thus when a person redeems they are just consuming the available fare bucket which takes away from other consumers who would be purchasing with cash or points as well. Upon the flight being take the cost is then removed as a liability on the balance sheet and added as revenue on their income statement. Of course there is no impact to their cash statement since the money was obtained for those points either from an external purchaser (e.g. credit card company) or it is a small part of prior flights where you are accruing points.

In the end if revenue management has done their job the revenue booked for the flight will be the same if it is 100% point redemption or 100% cash purchases. What they do want is 15 people on each of those flights to purchase business select as it will give them the most revenue.

This accounting is explained in their annual reports. (http://www.southwestairlinesinvestorrelations.com/)
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Justapax
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 01, 2020 1:48 am

Cranky Concierge is saying that December 17th is when Southwest is planning on adding the 737 Max to the schedule, Maybe that has something to do with the additional flights?
 
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Midwestindy
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 01, 2020 12:53 pm

jayunited wrote:
Midwestindy wrote:

No they explicitly say its 1.5% less flights
FLL is being cut for obvious reasons, cruise traffic is expected to be way down

The openings created by WN are relatively small compared to what others carriers have done (and likely will do) with their network


All airlines are currently selling their "full" schedule but I know UA has no intention of flying our FULL schedule. It is obvious WN is looking to take on UA at DEN and AA at PHX which is to be expected but there is no way WN can take on the entire US aviation industry and win. No airline has completely finalized their winter 2020 schedule we will just have just wait and see which flights actually operate verses what they expect to operate.

One thing UA's Kirby talks about is the unemployment rate and how a high unemployment rate is not good for airlines. We know from the latest numbers 40 million Americans are currently out of work. However there are many more we don't know about because they haven't been able to get through to file for unemployment insurance. I get what WN is saying and their executives are experts while I'm nothing more than a armchair observer whose opinion doesn't matter . But if you believe WN will operate nearly the same number of flights during winter 2020 as they did during winter 2019 with 40+ million Americans out of work then I don't know what to say except I don't see it.

WN will recover faster than AA, DL and UA that is not my argument but a FULL recovery by winter 2020 I don't see it especially when the entire industry (worldwide) is saying it will take years to recover.


The difference is UA, AA, & DL haven't edited their schedules at all past July, WN has. But, just like before the pandemic anything outside of a few months can very easily change (as I said earlier in this thread)

I have no idea what WN will run, I have just simply stated that they currently scheduled their flights at almost their 2019 level, and they have stated that even if demand doesn't return as quickly they can still operate a nearly full schedule (likely do to other airlines being significantly smaller).

Regardless this is really arguing semantics as even if they don't operate a full schedule it doesn't really matter, as whatever they offer will be a significantly higher % of their network than any of the US3.
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FLALEFTY
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 01, 2020 3:16 pm

ytib wrote:
FLALEFTY wrote:
A few observations about WN's route map in the near future:

4) Not sure what is going to happen to their Hawaiian operations. The long ETOPS legs back to LAX and OAK are low-yield routes with many FF's flying their families on cashed-in points they have accumulated.


The redemption of points to Hawaii is not really a hit to them as the way Southwest handles the values. The points required to obtain a ticket is tied directly to the cost of the ticket, thus when a person redeems they are just consuming the available fare bucket which takes away from other consumers who would be purchasing with cash or points as well. Upon the flight being take the cost is then removed as a liability on the balance sheet and added as revenue on their income statement. Of course there is no impact to their cash statement since the money was obtained for those points either from an external purchaser (e.g. credit card company) or it is a small part of prior flights where you are accruing points.

In the end if revenue management has done their job the revenue booked for the flight will be the same if it is 100% point redemption or 100% cash purchases. What they do want is 15 people on each of those flights to purchase business select as it will give them the most revenue.

This accounting is explained in their annual reports. (http://www.southwestairlinesinvestorrelations.com/)


Good point! WN has one of the best-designed FF programs in the industry.

However, setting aside the yield question, there are also unique expenses and operational issues to deal with flying ETOPS routes:

1) Maintenance requirements are stricter for their ETOPS sub-fleet and more expensive. A subset of their flight crews also have to be trained in ETOPS, biting into scheduling flexibility.
2) The six-hour ETOPS legs reduce WN's traditional crew productivity goals where crews flying multiple legs and having fast turns at stations are at the core of their operational strategy.
3) WN does not have an operating base in HNL. Crews have to be constantly rotated back to OAK and LAX, which is expensive. And any maintenance required at HNL would require a TDY crew with a rented facility, or it would have to be farmed-out to a local maintenance subcontractor.
 
jayunited
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 01, 2020 4:45 pm

Midwestindy wrote:
I have no idea what WN will run, I have just simply stated that they currently scheduled their flights at almost their 2019 level, and they have stated that even if demand doesn't return as quickly they can still operate a nearly full schedule (likely do to other airlines being significantly smaller).



Okay instead of looking 6 months into the future and trying to predict the future lets look at the present and recent past, in fact let us look at this past Wednesday May 27th. According to the TSA on Wednesday May 27th they processed 261,170 passengers through security checkpoints nationwide. On Thursday May 28th United's CEO is on the recorded saying UA on Wednesday flew 50,000 passengers. So for the sake of argument lets just surmise on Wednesday out of 261,170 passengers, UA flew 50,000 of those passengers. Its no secret that of the US3 UA has the fewest airplanes in the air we are only flying 10% of our schedule. Both AA and DL are operating either 15% or 20% or their normal schedule. With all airlines saying they are seeing a rise in traffic lets say AA actually flew 53,000 and Delta flew 56,000 (since both airlines are flying more of their schedule it's probably safe to assume they flew more passengers than UA). We then have airlines like NK, F9, B6, SY, AS, HA, for the sake of argument lets say all those airlines combined flew 38,000 passengers on Wednesday May 27th. If my estimates for AA, DL and the remaining US airlines are even close to being correct it means WN flew a little more than 66,000 passengers on Wednesday May27th. (If anyone has actual number for AA and/or DL for Wednesday May 27th please feel free to correct me).

The reason I posted the TSA's and UA's actual numbers is because it shows that even with UA operating only a hand full of international flights this past Wednesday UA still carried 50,000 passengers out of 261,170 passengers the TSA processed. Even without knowing any other airlines actual numbers it shows even though currently WN is operating the MOST flights out of all the US carriers the other carriers are still pulling their own weight. Although AA, DL and UA plan on being smaller and currently all of these airlines are smaller than WN, WN only has a slight advantage. At the end of the day isn't about the total number of flights an airline operates it is about profitability. Can WN operate a nearly full pre-COVID schedule for winter 2020 sure they can. However can WN operate a full schedule profitably in 2020 is a total different story.
 
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Midwestindy
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 01, 2020 5:08 pm

jayunited wrote:
Midwestindy wrote:
I have no idea what WN will run, I have just simply stated that they currently scheduled their flights at almost their 2019 level, and they have stated that even if demand doesn't return as quickly they can still operate a nearly full schedule (likely do to other airlines being significantly smaller).



Okay instead of looking 6 months into the future and trying to predict the future lets look at the present and recent past, in fact let us look at this past Wednesday May 27th. According to the TSA on Wednesday May 27th they processed 261,170 passengers through security checkpoints nationwide. On Thursday May 28th United's CEO is on the recorded saying UA on Wednesday flew 50,000 passengers. So for the sake of argument lets just surmise on Wednesday out of 261,170 passengers, UA flew 50,000 of those passengers. Its no secret that of the US3 UA has the fewest airplanes in the air we are only flying 10% of our schedule. Both AA and DL are operating either 15% or 20% or their normal schedule. With all airlines saying they are seeing a rise in traffic lets say AA actually flew 53,000 and Delta flew 56,000 (since both airlines are flying more of their schedule it's probably safe to assume they flew more passengers than UA). We then have airlines like NK, F9, B6, SY, AS, HA, for the sake of argument lets say all those airlines combined flew 38,000 passengers on Wednesday May 27th. If my estimates for AA, DL and the remaining US airlines are even close to being correct it means WN flew a little more than 66,000 passengers on Wednesday May27th. (If anyone has actual number for AA and/or DL for Wednesday May 27th please feel free to correct me).

The reason I posted the TSA's and UA's actual numbers is because it shows that even with UA operating only a hand full of international flights this past Wednesday UA still carried 50,000 passengers out of 261,170 passengers the TSA processed. Even without knowing any other airlines actual numbers it shows even though currently WN is operating the MOST flights out of all the US carriers the other carriers are still pulling their own weight. Although AA, DL and UA plan on being smaller and currently all of these airlines are smaller than WN, WN only has a slight advantage. At the end of the day isn't about the total number of flights an airline operates it is about profitability. Can WN operate a nearly full pre-COVID schedule for winter 2020 sure they can. However can WN operate a full schedule profitably in 2020 is a total different story.


You can't use TSA numbers to extrapolate how many passengers each airline is flying, and WN & AA are under estimated.

Example: AA flew 100,000 passengers on May 15th, but total TSA throughput was only 250k. Yesterday they only reported being down 80% yoy
https://twitter.com/RossFeinstein/statu ... 49344?s=20
https://twitter.com/RossFeinstein/statu ... 97889?s=20

If a passenger makes a connection that passenger is counted twice by the airline, but was only screened once by TSA.

Regardless the differences will be exacerbated in June, as WN is running 50% of its schedule while UA runs 10 or 15%
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Jshank83
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 01, 2020 6:44 pm

Midwestindy wrote:


If a passenger makes a connection that passenger is counted twice by the airline, but was only screened once by TSA.


And I would expect connecting passengers probably are up since there are less flights than normal to give people nonstop options.
 
jplatts
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 08, 2020 8:01 pm

WN could add a few more nonstop routes out of CVG once demand for additional flights out of CVG returns with F9, DL, AA, and UA all having already made some cuts at CVG and with DL expected to make some additional cuts at CVG.

There are also some additional within-DCA perimeter destinations that might be able to support nonstop service out of DCA on WN if AA significantly downsizes its DCA hub and if WN acquires extra slots at DCA.

WN re-adding BWI-LGA nonstop service is also a possibility if WN acquires extra slots at LGA since WN re-adding BWI-LGA nonstop service would provide easier connectivity to LGA from the eastern half of the Midwest and the Southeast on WN.
 
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IrishAyes
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 08, 2020 8:05 pm

jplatts wrote:
WN could add a few more nonstop routes out of CVG once demand for additional flights out of CVG returns with F9, DL, AA, and UA all having already made some cuts at CVG and with DL expected to make some additional cuts at CVG.

There are also some additional within-DCA perimeter destinations that might be able to support nonstop service out of DCA on WN if AA significantly downsizes its DCA hub and if WN acquires extra slots at DCA.

WN re-adding BWI-LGA nonstop service is also a possibility if WN acquires extra slots at LGA since WN re-adding BWI-LGA nonstop service would provide easier connectivity to LGA from the eastern half of the Midwest and the Southeast on WN.


AA is not divesting any DCA slots to WN. that would be a very poor move.
 
tphuang
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 08, 2020 8:05 pm

WN just close $1.8 billion in unsecured debt. And I must say at good interest rates of 4.75 to 5.125% (at least compared to what DL got). This is just going to bode well for them in building their operations back.
 
jplatts
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 08, 2020 8:20 pm

IrishAyes wrote:
AA is not divesting any DCA slots to WN. that would be a very poor move.


I agree with your point, even though there are some additional within-DCA perimeter destinations that could support nonstop service to DCA on WN if AA did divest slots at DCA.
 
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 08, 2020 8:22 pm

tphuang wrote:
WN just close $1.8 billion in unsecured debt. And I must say at good interest rates of 4.75 to 5.125% (at least compared to what DL got). This is just going to bode well for them in building their operations back.


I believe they are using this to pay off their short term debt they took on at the beginning of this, which is smart considering they have plenty of cash right now and can access capital fairly cheaply and easily.
 
usa330300
Posts: 69
Joined: Thu Dec 17, 2009 2:29 pm

Re: Southwest Airlines planning on squeezing competitors in weaker positions

Mon Jun 08, 2020 8:49 pm

questions wrote:
IrishAyes wrote:
If this came from GK or other senior leaders at WN, I would be a bit more shocked to see this. VP of Flight Ops, on the other hand, don't resonate to me with the same levels of cred. This smells of #FakeNews, and seeing that it came from the DMN, which has truly lost of ton of respectable writing over the decades (quite sad), I'm not surprised.


For the most part, walking into the HQ of WN is like walking into the Shady Rest Hotel in Petticoat Junction.

There are some pockets of sophisticated, smart thinkers but it’s not widely prevalent. There are a ton of folks holding onto the legacy culture and folklore of the past, as if it’s the inspiration for the future. While certain aspects of the company's culture should carry forward, how that’s defined is widely misunderstood. The airline is quite different today. I wouldn’t bet on a lot of VP’s being in a position to correctly articulate the company’s strategy, especially during a crisis — even in terms that are appropriate to share with the media.



VP's what?
 
ctrabs0114
Posts: 1080
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Tue Jun 09, 2020 12:45 am

planecane wrote:
I just flew FLL-MDW for $90 RT including taxes and fees. I'm pretty sure that's the cheapest RT I've flown in my adult life. I think the previous low was $98 RT FLL-TPA somewhere around 2003.

The flight to MDW had about 40 people on a 73G and the return was around 90 on a 738 (pretty close to the no middle seat capacity they are selling). No way those flights can be close to profitable.


It also depends on how much cargo they're carrying. I would think the Chicago-South Florida cargo market is strong enough that it could at least mitigate, though not necessarily eliminate, the financial loss from lower passenger capacity/revenue.
2019: DAL, MCI, PHX, LAS, DFW, SAT, ORD, SLC, SEA, DTW, PHL, MIA, LAX; B73G (WN x3), B738 (WN, AA, DL), A20N (NK), MD83 (AA), B788 (AA x2), CS1 (DL), B739 (DL), B712 (DL), B752 (AA), B763 (AA), B77W (AA), B789 (AA)
Next: TBA
 
ctrabs0114
Posts: 1080
Joined: Mon Oct 09, 2017 8:09 am

Re: Southwest Airlines planning on squeezing competitors in weaker positions

Tue Jun 09, 2020 12:50 am

Justapax wrote:
Cranky Concierge is saying that December 17th is when Southwest is planning on adding the 737 Max to the schedule, Maybe that has something to do with the additional flights?


Somebody must know something that the rest of the aviation community doesn't. I know I had been hearing reports that Boeing was making progress on getting the MAX re-certified, though I haven't heard anything official.
2019: DAL, MCI, PHX, LAS, DFW, SAT, ORD, SLC, SEA, DTW, PHL, MIA, LAX; B73G (WN x3), B738 (WN, AA, DL), A20N (NK), MD83 (AA), B788 (AA x2), CS1 (DL), B739 (DL), B712 (DL), B752 (AA), B763 (AA), B77W (AA), B789 (AA)
Next: TBA
 
Flflyer83
Posts: 69
Joined: Tue Apr 14, 2020 4:40 pm

Re: Southwest Airlines planning on squeezing competitors in weaker positions

Tue Jun 09, 2020 3:25 am

FLALEFTY wrote:
ytib wrote:
FLALEFTY wrote:
A few observations about WN's route map in the near future:

4) Not sure what is going to happen to their Hawaiian operations. The long ETOPS legs back to LAX and OAK are low-yield routes with many FF's flying their families on cashed-in points they have accumulated.


The redemption of points to Hawaii is not really a hit to them as the way Southwest handles the values. The points required to obtain a ticket is tied directly to the cost of the ticket, thus when a person redeems they are just consuming the available fare bucket which takes away from other consumers who would be purchasing with cash or points as well. Upon the flight being take the cost is then removed as a liability on the balance sheet and added as revenue on their income statement. Of course there is no impact to their cash statement since the money was obtained for those points either from an external purchaser (e.g. credit card company) or it is a small part of prior flights where you are accruing points.

In the end if revenue management has done their job the revenue booked for the flight will be the same if it is 100% point redemption or 100% cash purchases. What they do want is 15 people on each of those flights to purchase business select as it will give them the most revenue.

This accounting is explained in their annual reports. (http://www.southwestairlinesinvestorrelations.com/)


Good point! WN has one of the best-designed FF programs in the industry.

However, setting aside the yield question, there are also unique expenses and operational issues to deal with flying ETOPS routes:

1) Maintenance requirements are stricter for their ETOPS sub-fleet and more expensive. A subset of their flight crews also have to be trained in ETOPS, biting into scheduling flexibility.
2) The six-hour ETOPS legs reduce WN's traditional crew productivity goals where crews flying multiple legs and having fast turns at stations are at the core of their operational strategy.
3) WN does not have an operating base in HNL. Crews have to be constantly rotated back to OAK and LAX, which is expensive. And any maintenance required at HNL would require a TDY crew with a rented facility, or it would have to be farmed-out to a local maintenance subcontractor.


Caribbean , Mexico and other international destinations are returning. Hawaii is going to grow with service to OAK, SMF, SJC, SAN, and more mainland service points soon. Hawaii still has a 14 day quarantine for all arrivals from the mainland and it is unknown for how long that’s going to last.
 
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Veigar
Posts: 528
Joined: Sat Jun 27, 2015 4:09 pm

Re: Southwest Airlines planning on squeezing competitors in weaker positions

Tue Jun 09, 2020 4:04 am

I flew a LAX-LAS hop on WN last week and it was at max capacity (besides the middle seat blockage). Was quite interesting.
 
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IrishAyes
Posts: 2430
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Re: Southwest Airlines planning on squeezing competitors in weaker positions

Tue Jun 09, 2020 6:36 pm

ctrabs0114 wrote:
planecane wrote:
I just flew FLL-MDW for $90 RT including taxes and fees. I'm pretty sure that's the cheapest RT I've flown in my adult life. I think the previous low was $98 RT FLL-TPA somewhere around 2003.

The flight to MDW had about 40 people on a 73G and the return was around 90 on a 738 (pretty close to the no middle seat capacity they are selling). No way those flights can be close to profitable.


It also depends on how much cargo they're carrying. I would think the Chicago-South Florida cargo market is strong enough that it could at least mitigate, though not necessarily eliminate, the financial loss from lower passenger capacity/revenue.


Cargo represents a very small portion of the overall revenue pie. I think the industry average from 2010-2019 was 12%. Even if that figure is stable, or even increases a few percentage points, being in a demand environment with a 50% decrease YoY, particularly during Q2/Q3, will only do just that as you mentioned....mitigate the blow, but not by much.

https://centreforaviation.com/analysis/ ... ugh-520283
 
Flflyer83
Posts: 69
Joined: Tue Apr 14, 2020 4:40 pm

Re: Southwest Airlines planning on squeezing competitors in weaker positions

Wed Jun 10, 2020 12:16 am

Veigar wrote:
I flew a LAX-LAS hop on WN last week and it was at max capacity (besides the middle seat blockage). Was quite interesting.


Quite a few of the flights are at max capacity with additional flights being added close in to accommodate more passengers. Of course, there are quite a few routes that still have 40-50 passengers on each flight and a couple with less than that.
 
jetawayusa
Posts: 19
Joined: Mon Nov 11, 2019 5:00 pm

Re: Southwest Airlines planning on squeezing competitors in weaker positions

Wed Jun 10, 2020 6:12 am

tphuang wrote:
Isn't this kind of obvious? WN got a huge war chest and very little debt. They can sustain a money losing competition for a while to capture market share and build new fortress hubs. Many easy moves for them to make:
- Acquire smaller airlines to either eliminate competitor (NK), add slots (B6) or get gates at relevant airports (AS/F9/B6)
- build back up and then expand in DEN while UA is slowly adding back capacity. That's gotta be there number 1 priority in their domestic work.
- Add gates at LAX to take advantage of AA/UA cuts there
- Acquire/lease more slots at LGA/DCA from financially weak carriers of AA/UA
- If AA cuts back significantly at PHX, take advantage of that to become largest carrier at PHX
- Expand in SFO if UA cuts back there

I would be very worried about WN if I am one of their competitors. They will be close to their pre-COVID capacity by next summer imo.

And it's not just WN that can take advantage of legacy carriers cutting back.
Things are wide open for B6 in NYC. JFK will have more slots, EWR will have more gates open and LGA will most likely have some slots available. BOS will be wide open.
AS will be able to expand at SFO if they want.
NK is going to look to grow at LGA and EWR. It will grow at South Florida where everyone else is cutting back.
All the ULCCs will capture more of the leisure market.

DL management has told their employees that yield will be trash until 2022. High yielding international and corporate stuff will be slow to return. The stuff that will come back first are the leisure stuff. All of which favors non-legacy carriers.


So...tphuang...you are expecting WN to expand gates at LAX...where do you propose they get these gates? Have you been to LAX? WN is in Terminal one.... Northside of the "horseshoe" airport in which they have just spent millions refurbishing...pigeonholed in the corner! Delta is in T-2 and T-3 is in the process of a complete teardown! THERE IS NO ROOM for WN to EXPAND right now...and Terminal ZERO is on hold indefinitely!! WN can not add too much in LA to take advantage of UA and AA downsizing!!!
 
737MAX7
Posts: 145
Joined: Mon Nov 13, 2017 7:26 pm

Re: Southwest Airlines planning on squeezing competitors in weaker positions

Wed Jun 10, 2020 2:18 pm

IrishAyes wrote:
ctrabs0114 wrote:
planecane wrote:
I just flew FLL-MDW for $90 RT including taxes and fees. I'm pretty sure that's the cheapest RT I've flown in my adult life. I think the previous low was $98 RT FLL-TPA somewhere around 2003.

The flight to MDW had about 40 people on a 73G and the return was around 90 on a 738 (pretty close to the no middle seat capacity they are selling). No way those flights can be close to profitable.


It also depends on how much cargo they're carrying. I would think the Chicago-South Florida cargo market is strong enough that it could at least mitigate, though not necessarily eliminate, the financial loss from lower passenger capacity/revenue.


Cargo represents a very small portion of the overall revenue pie. I think the industry average from 2010-2019 was 12%. Even if that figure is stable, or even increases a few percentage points, being in a demand environment with a 50% decrease YoY, particularly during Q2/Q3, will only do just that as you mentioned....mitigate the blow, but not by much.

https://centreforaviation.com/analysis/ ... ugh-520283

Exactly! As long as the freight slows the bleeding to a trickle we’ll be alright, which it seems to be doing on some of these routes.
 
tphuang
Posts: 5212
Joined: Tue Mar 14, 2017 2:04 pm

Re: Southwest Airlines planning on squeezing competitors in weaker positions

Wed Jun 10, 2020 2:22 pm

https://www.forbes.com/sites/danielreed ... -airlines/
another article on this topic. WN is digging in for a long fare war to take advantage of legacy weakness with a lot of cash in hand. I still don't expect them to operate "full schedule" at end of the year, but who knows. It looks like they are going to operate 65% schedule in the fall, which is already quite impressive for an airline of their size.

WN is seeing that if they don't bring flights back fast, ULCCs will take over those market share.

I still think WN will make a buyout bid on either NK or F9 to take out competition.

jetawayusa wrote:
So...tphuang...you are expecting WN to expand gates at LAX...where do you propose they get these gates? Have you been to LAX? WN is in Terminal one.... Northside of the "horseshoe" airport in which they have just spent millions refurbishing...pigeonholed in the corner! Delta is in T-2 and T-3 is in the process of a complete teardown! THERE IS NO ROOM for WN to EXPAND right now...and Terminal ZERO is on hold indefinitely!! WN can not add too much in LA to take advantage of UA and AA downsizing!!!

Yes, I've been to LAX a few times. No need to get so excited. It looks like they are not making LAX a priority and postponing T0 work. So onto other markets.

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