DAYflyer
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Posts: 3546
Joined: Wed Sep 08, 2004 9:35 pm

LUV Second Highest US Seat Mile Costs

Wed Jul 18, 2007 4:33 am

How can Southwest be classified as a low cost carrier with the 2nd highest seat mile costs of any carrier in the USA?

Fair use
But Southwest had among the highest unit costs for labor – 2.6 cents per seat mile, third highest among the 10 largest carriers and below only American at 3.1 cents and Alaska Air Inc. at 2.9 cents.

Low-cost competitors AirTran Airways at 1.7 cents and JetBlue Airways Corp. 2.3 cents undercut it, as well as large network carriers who have lowered costs in bankruptcy court, including Northwest Airlines, United Airlines and Delta Air Lines.


I know they hedge fule quite a bit, but does it really offset this high cost of labor?

http://www.dentonrc.com/sharedconten...7dnbussouthwestbuyouts.f495e1.html
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siromega
Posts: 564
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RE: LUV Second Highest US Seat Mile Costs

Wed Jul 18, 2007 4:36 am

WN has some of the best paid people in the industry - there was just a post about senior employees getting a $25,000 buyout offer. So it makes sense that they're trying to control their costs.
 
luvfa
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RE: LUV Second Highest US Seat Mile Costs

Wed Jul 18, 2007 5:11 am

The difference is we have the lowest ratio of employees per plane of any major airline. Also, our non-labor costs are lower!
 
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RE: LUV Second Highest US Seat Mile Costs

Wed Jul 18, 2007 5:25 am

Quoting DAYflyer (Thread starter):
How can Southwest be classified as a low cost carrier with the 2nd highest seat mile costs of any carrier in the USA?

Actually, the article says they are third highest, below Alaska and AA.

Quoting Luvfa (Reply 2):
The difference is we have the lowest ratio of employees per plane of any major airline. Also, our non-labor costs are lower!

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DfwRevolution
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RE: LUV Second Highest US Seat Mile Costs

Wed Jul 18, 2007 5:46 am

Quoting DAYflyer (Thread starter):
How can Southwest be classified as a low cost carrier with the 2nd highest seat mile costs of any carrier in the USA?

No offense DAYflyer, but your numbers seem to be all over the place.

1. You say that WN has the 2nd highest seat/mile costs of any carrier. Seat/mile costs and labor costs are two different figures. From the article, WN actually has the lowest seat/mile costs amongst major airlines:

"According to figures presented at a June investment conference by American Airlines Inc., Southwest had the lowest non-labor unit costs of the 10 largest U.S. carriers in the first quarter. Its costs excluding labor were 2.7 cents per airplane seat flown a mile, compared to 4.5 cents for Continental Airlines Inc., the highest-cost carrier, and 3.6 cents for American."

2. And if you meant to say that WN has the 2nd highest labor costs, this is incorrect as well. Your quotation shows that WN has the 3rd highest labor costs:

"But Southwest had among the highest unit costs for labor – 2.6 cents per seat mile, third highest among the 10 largest carriers and below only American at 3.1 cents and Alaska Air Inc. at 2.9 cents."
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