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juanchie
Topic Author
Posts: 188
Joined: Thu Jan 29, 2004 7:17 am

Next BIG Thing

Sat Jan 31, 2004 2:21 pm

As we have all seen, low cost airlines are the big thing of today. Airlines like southwest and jetblue are the popular airlines today, (and they deserve it!) and it seems everyone is trying to recreate the "Southwest Effect". Personally, I am a big believer that no one will ever be "southwest". What I am wondering is what is gonnna be the new big development in air travel? What's gonna be the new southwest? Personally, I think if the conventional airlines like delta and united want to create separate identities like song and ted, they shouldn't try and be the southwest of today, but the southwest of tomorrow. That's just my opinion and I am just trying to get everyone's creativity going. I would like to see the ideas everyone comes up with.
God, forgive me for who I am, and help me be the man I want to be.
 
A330Fan1
Posts: 835
Joined: Wed Jul 16, 2003 2:24 pm

RE: Next BIG Thing

Sat Jan 31, 2004 2:25 pm

hey Juanchie, I agree with what you are saying. Rather than focus on trying to match the low-cost airlines of today they should try some new things and become the southwest of tomorrow, as you said. Very good topic!

-A330Fan1
 
DLKAPA
Posts: 7962
Joined: Wed Dec 03, 2003 10:37 am

RE: Next BIG Thing

Sat Jan 31, 2004 2:30 pm

Virgin Atlantic is on target to be the next Southwest. Low fares, and the awesome full service and retro interiors.

DLKAPA
And all at once the crowd begins to sing: Sometimes the hardest thing and the right thing are the same
 
aa757first
Posts: 3140
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RE: Next BIG Thing

Sat Jan 31, 2004 2:35 pm

Or, domestically, Frontier and jetBlue, IMO.

AAndrew
 
DLKAPA
Posts: 7962
Joined: Wed Dec 03, 2003 10:37 am

RE: Next BIG Thing

Sat Jan 31, 2004 2:48 pm

Definetly. F9 needs some widebody love.

DLKAPA

[Edited 2004-01-31 06:49:11]
And all at once the crowd begins to sing: Sometimes the hardest thing and the right thing are the same
 
juanchie
Topic Author
Posts: 188
Joined: Thu Jan 29, 2004 7:17 am

RE: Next BIG Thing

Sun Feb 01, 2004 10:42 am

IMO, jetblue and frontier really aren't anything new and improved. Just other versions of southwest with minimal changes. I am waiting to see what completely new ideas come about in this industry in the next 5 years. I expect there to be some kind of change, but probably not one that effects the airlines as much as the low cost model that southwest created years ago and is now in full stride.
God, forgive me for who I am, and help me be the man I want to be.
 
NIKV69
Posts: 14329
Joined: Wed Jan 28, 2004 4:27 am

RE: Next BIG Thing

Sun Feb 01, 2004 11:07 am

Jet Blue is nothing but an airline that had the luxury of a ton of capital and Airbus willing to bend over backward for them. They have done nothing that any other LCC has done. I love Southwest because they have figured a way to have low fares, huge turn over in their planes and keep them flying with no problems. Hats off to their maintainence crew. I also understand Southwest's on time record is great. As far as building a better mousetrap I really don't know how much more you can do. Southwest offers low cost flights with no food and no assigned seating but are dependable and have a lot of destinations. What's better than that?
90 Day Fiancé has taught me that Russian woman are excellent.
 
juanchie
Topic Author
Posts: 188
Joined: Thu Jan 29, 2004 7:17 am

RE: Next BIG Thing

Sun Feb 01, 2004 11:23 am

You can't argue southwest isn't great because it is. The Kheller crew has done a fantastic job creating an airline that is as successful as it is. I don't think southwest could be much better, but I think there could be innovations in other parts of the industry. Imagine if the US were full of nothing but airlines like southwest. There would be many markets where southwest couldn't be profitable. For instance, a lot of people think southwest couldn't go international, especially over the Atlantic. What could be improved in these markets such as international travel? In what ways could the conventional carriers improve that isn't just copying the low cost model? Personally, I think southwest and other LCC will be around for a long time! What innovations will keep everyone else around with them?
God, forgive me for who I am, and help me be the man I want to be.
 
NIKV69
Posts: 14329
Joined: Wed Jan 28, 2004 4:27 am

RE: Next BIG Thing

Sun Feb 01, 2004 11:39 am

Well Southwest could never go international because they do not serve food, and use the 737, which is very economical and which works for them because they fly alot of shorter flights and get those planes back up in the air better and faster than anyone. It's what keeps the fares low. I don't think they need that market.
90 Day Fiancé has taught me that Russian woman are excellent.
 
Jet-lagged
Posts: 924
Joined: Mon Mar 04, 2002 11:58 pm

RE: Next BIG Thing

Sun Feb 01, 2004 12:31 pm


The next BIG thing? How about:

(1)
Dominant world airlines being European - AirFrance, BA, and Lufthansa, along with JAL and maybe a couple other Asians. Why? Asian/European's take the leads in customer service advances. American carriers seem satisfied to fly to alliance partner hubs. Southwest and low cost carriers eating at their base internally. Add to this strong unions and wage expectations, and crippling security requirements in the U.S., the American carriers struggle to make profit and often lose money. The U.S. has gone to great lengths to establish open skies arrangements, but I don't see that U.S. carriers have taken all that much advantage of them for their own metal and employees. Plus, social changes that encourage travel for tourism, with high-paying business men. Flying in the U.S. is increasingly akin to travelling in a bus. Add up all the above, and I see the clout and willingness to set industry agenda moving to Europe and Asia.

(2)
Expansion of time-share in corporate jets dramatically eating away at profitable first and business class travel in the U.S.

(3)
Either thru bankruptcies or the rise of the low-cost carriers - loss of any meaningful influence by unions in U.S. airline industry.

(4) What is your timetable for global warming? Many important airports could be flooded - JFK, Boston, LGA, Kansai, Hong Kong, (Maldives - oh, wait, that is the entire country), San Francisco, and others. Relocating an airport is a process that takes many years or even a couple decades from idea to agreement to execution. If so, the impact would be a fundamental competitive advantage for those carriers with their operations and customer base inland.









 
juanchie
Topic Author
Posts: 188
Joined: Thu Jan 29, 2004 7:17 am

RE: Next BIG Thing

Sun Feb 01, 2004 1:56 pm

-Jet-lagged
I think you touched upon something that I don't hear a lot of on this site and that's competition with US airlines from other countries. The topic of conventional vs lcc is an everyday event but when u think about it, internationally, American airlines are becoming less and less dominant, if they were at any time. Personally, I think some of the more financially-able airlines should try and to focus more internationally. For instance, I believe multiple threads have discussed AA increased service to Asia. That would a positive effect in two ways. First, you are getting customers outside the US and second, you are doing something that airlines like southwest can't, flying to Europe, Asia south America etc. I mean in times like now, where airlines are fighting for cash, do anything you can to bring it in, whether it be from Allentown PA or Hong Kong.
God, forgive me for who I am, and help me be the man I want to be.
 
cloudboy
Posts: 1130
Joined: Mon Jan 26, 2004 12:38 pm

RE: Next BIG Thing

Sun Feb 08, 2004 1:38 pm

Unfortunately it seems most airlines are more interested in trying to follow everyone else than innovate on their own. But a few possible new trends I could see happening:

1) Low cost international flights. One type, such as 767s flying from only a couple of airports in the US to European markets. Not that I think they will be that successful, but during the summer months fare jump drastically. This may be the next move for some of the current LCCs.

2) Savings through volume. A full 747 is more efficient than the several 737 flights that would be needed to fly the same amount of people. A discount carrier looking for savings could possibly choose to fly only a couple of very full jumbos, a an even lower fare than the LCCs. You wouldn't be able to attract business flyers, but this is a discount carrier, after all.

3) Main line carriers finding a way to integrate charter - like service into their route structure. Possibly by flying small aircraft - even business jets - at a good frequency and from smaller airports they may be able to charge a higher ticket price.

4) some airline to focus on just offering a slightly better experience, and not the big jump between economy and First. Naw - never happen...
"Six becoming three doesn't create more Americans that want to fly." -Adam Pilarski
 
cloudy
Posts: 1613
Joined: Sat Apr 06, 2002 3:23 pm

RE: Next BIG Thing

Sun Feb 08, 2004 2:44 pm


1) Low cost international flights. One type, such as 767s flying from only a couple of airports in the US to European markets. Not that I think they will be that successful, but during the summer months fare jump drastically. This may be the next move for some of the current LCCs.
-----------
This probably will not work because travel between Europe and the US is already cheap. It will probably get even cheaper with less government interferance and new planes like the 7E7 and A380. Flights from the US to Asia, Latin America or the Carribean would be a better bet. The Asia-Europe market is out because Emirates and others are planning to add tons of capacity which will bring down fares. Even to better destinations such as those mentioned above, much of the low cost model simply does not apply to the international longhaul market. There also a lot less fat to trim in current ocean crossing operations than there is in shorter-haul markets. I'll go into more detail if you want.


------
2) Savings through volume. A full 747 is more efficient than the several 737 flights that would be needed to fly the same amount of people. A discount carrier looking for savings could possibly choose to fly only a couple of very full jumbos, a an even lower fare than the LCCs. You wouldn't be able to attract business flyers, but this is a discount carrier, after all.
-------
The pure Southwest lo-co model is based on business travel, not vacation travel. Southwest's walkup fares on shorthaul routes, combined with their frequencies, are a big draw. More liesure oriented low-co's have not done as well. ATA is the closest thing to that model that exists, and they got rid of their wideboddies except for charter service.

The business model you are talking about exists already. That is the vacation charter market. They use very low seat pitch on packed, large planes flying to vacation destinations. The 757 is very popular with these airlines in Europe, but a few fly larger planes. Scheduled service costs more to run than charter service because you have to fly many times without most of the seats full, and you need a much larger presence in each airport you serve. The payoff of scheduled service is that you gain credibility, visibility, and reliability of service. This enables you to charge higher fares, which your target market will not want to pay. If you want to cater to bargain hunting travelers, you can do so more profitably with charter flights. Also, charter airlines can adjust to the very seasonal demand in this market far better then scheduled carriers can.


3) Main line carriers finding a way to integrate charter - like service into their route structure. Possibly by flying small aircraft - even business jets - at a good frequency and from smaller airports they may be able to charge a higher ticket price.
-------
Something like this may happen, though it would probably operate more like an air-taxi service than shceduled service. Fractional bizjet ownership is taking more and more high-yield business away from scheduled airlines. Air-taxi with newer, cheaper bizjets such as the Eclipse may become important
-----

4) some airline to focus on just offering a slightly better experience, and not the big jump between economy and First. Naw - never happen...
-------
It has happened already. Midwest Express has service that is less then that of first class, but far better than coach on most airlines. But the aforementioned fractional ownership programs (like netjets) may hurt the viability of this model

Other than what has already been mentioned (the importance of Asia, etc)There are two "Next Big Things" that I see, one is already happening, and the other is a bit of a long shot......

.....The increased improtance of 70-120 seat jets. Growth in this market has been stunted for a long time due to scope clauses in US pilot contracts. But the American market will be a smaller share of the world market with time. Also, network carrier Unions are being forced to change these scope clauses to help their employers survive. The Embraer 170-195 and any new competitors have a huge market that has been neglected for a long time. The 70-120 seater could open many whole new markets to high-frequency jet service, and vastly increase the size and efficiency of US and European markets.

......There may be a turboprop renaissance of sorts, led by the Dash 8-Q400. Turboprops really are cheaper for short flights, especially with low load. They can more easily get into convenient airports like London City. Don't be surprised to see some new startups try to start a point-to-point, low-fare, , high frequency, shorthaul, single type airline with 70-seat turboprops. I wouldn't be surprised to see an existing lo-co add this type of network and use it as a kind of low-cost, self sustaining feeder. Flybe is already leading the way in Europe. But don't think this means good ole Timbuktu is getting service again. We are talking 50 or 70 seaters. The 19 and 30 seat turboprop will continue on its path to extinction for the foreseable future.

 
cloudboy
Posts: 1130
Joined: Mon Jan 26, 2004 12:38 pm

RE: Next BIG Thing

Mon Feb 09, 2004 2:11 am

I hadn't paid that much attention to Southwest's model. To be honest - they were always serving the outlying airports so they never went where you wanted to go. And they made so many hops per flight that they took forever, so I pretty well considered them a tourist airline and not a business one. Not to mention having to put up with the vaudeville act throughout the flight...

Since you brought up the issue of an increase in large regional jets, does anyone think that one of the regional jet manufacturers might eventually start encroaching on Boeing's and Airbus's territory?
"Six becoming three doesn't create more Americans that want to fly." -Adam Pilarski
 
cloudy
Posts: 1613
Joined: Sat Apr 06, 2002 3:23 pm

RE: Next BIG Thing

Mon Feb 09, 2004 4:30 pm

hadn't paid that much attention to Southwest's model. To be honest - they were always serving the outlying airports so they never went where you wanted to go. And they made so many hops per flight that they took forever, so I pretty well considered them a tourist airline and not a business one. Not to mention having to put up with the vaudeville act throughout the flight...
------
They serve many close in airports, oftentimes the airport Southwest serves is actually closer to the center of the city. Midway and Love field come to mind. They also serve LAX and many other large airports. It is indeed true that Southwest does a lot of shorthauls. This is how they cater to the business traveler. Shorthauls are a mostly business market. If you are going to a city 200 or 300 miles away for fun, nine times out of ten you will drive. People who fly these distances are doing so because their time is very valuable or because someone else is paying for it- in other words, they are going on business. Southwest also has a lot of frequencies, because business travelers need them. Vacationers don't. The "vaudeville acts" are not there all the time and take up a very small portion of the flight - usually close to takeoff or landing, when you would be wide awake anyway. Very few people who have actually flown on Southwest would go for your view of things. Southwest is mainly a business airline and has been from the start. If you are looking for a lo-co that caters to vacationers, check out Spirit or ATA. They are closer to the "vacation airline" model that you are looking at.

Southwest does actually have a lot of nonstop longhauls now. And they have always attracted vacationers through their low prices and less restrictive tickets. But that is not their core business.
-----

Since you brought up the issue of an increase in large regional jets, does anyone think that one of the regional jet manufacturers might eventually start encroaching on Boeing's and Airbus's territory?
------

They already are. You will notice that there are very few orders for the A318 or 737-600 (both about 100 seats, or a few more in a tight configuration) even though they would fit in many airline's fleets like a glove. The reason is the new large regional jets are lighter, offer almost the same range, and are based on newer technology. I wouldn't be surprised to see a new consortium arise among the regional jet makers to more directly challenge Airbus and Boeing. Within about 10 years or so, the market will be big enough for three players.

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