Bottom line up front: no re-regulation. bad idea. bad bad bad.
Scooter says:>>"The reason that LCCs like Southwest and JetBlue are able to do what they do is that they "cherry pick" routes. They only fly what is going to offer the best profit margin. While this is good for them, I think it may be less than desirable from a macroeconomic prospective. If the LCC phenomena were to play itself out to its eventual ultimate conclusion (the death of hub and spoke), then many small and mid size communities would lose direct air service. These links are very important to them economically, and to the United States as a whole."<<
My replies to Scooter:
#1 The cherry picking argument really doesn't wash. You see WN
in a lot of places that legacy carriers don't want to serve, serve only with RJs, or would serve only by forcing people to connect through hubs.
Examples: A - cities off the beaten path that would have only commuter-type service without WN
: Harlingen, Lubbock, Midland-Odessa, TX
B - city pairs that would be forced to fly thru a hub if not for WN
: Oklahoma City to Kansas City. New Orleans to Birmingham. Birmingham to Nashville. Las Vegas to Albuquerque. While those are good sized cities, and pretty well traveled routes...it may surprise you to note that when WN
inaugurated service between those city pairs, there was NO nonstop service in those markets.
#2 Small to medium size cities who have an economic need for air travel. Okay, fine. If they have a need for economic air travel, let them pay for it. There is no reason why a passenger flying from Dallas to Houston or Los Angeles to Oakland should subsidize the travel of someone flying from Franklin/Oil City, PA to Manhattan/Junction City, Kansas.
I realize it sounds sort of Darwinistic but the ultimate real deal is that if a market has a need for air service, they will find a way to pay for it. If they can't pay for it, then they don't need it. Governments have done many things over the years but they have never found a way to repeal the laws of supply & demand.
Supa7E7 says >>"Southwest is what you're really talking about. Southwest in unique, and no, they won't take over the entire US market. Look in 5 years; Southwest will not be the golden darling they are today. For one thing, their product is demonstrably less desirable than full-service LCC or legacy airlines. For two, they will see rising labor costs over time"<<
Folks were saying that about Southwest 10 and even 20 years ago. I won't argue that they will face cost pressures....they have always faced cost pressures. It surprises many to realize that Southwest employees are already among (if not the, depending on job classification) highest paid airline folks out there. They are VERY well paid when the profit sharing is figured in. By the same token, they are productive. The company has always focused on cost control and the next 5 yrs should be no different than the last 33. Southwest has structured themselves to be low cost even while paying very competitive wages. What will be really interesting to see is if other LCCs can keep a lid on costs as wages rise, as they inevitably do. And as far as their product being less desirable...speak for yourself. There are quite a few people who, for business or pleasure, are always in Coach. When it comes to Coach product, Southwest's is arguably better than any of the legacy carriers.....American's comes closest due to MRTC, but cabin service, flight frequency, and FF
programs tip the scales (depending on what criteria you wish to use.) Succinctly put, there are a lot of other airline managers out there who have gotten themselves and their companies in a lot of hot water by underestimating Southwest's product.