KarlB737
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Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 6:53 am

One of changes that is being considered we as airliners-net members have been aware of for months is that there is the possibility of assigned seating. That is not news to this well informed group. Adding television is a possibility.

One of the things they do now puzzles me. I am surprised that they go directly into some big airports now where years ago that was unheard of. Is that a mistake? They used to locate a secondary airport so they could get in and out faster --- that was the plan. What happened?

Anyway here's more of the considered changes:

"The carrier has set a goal of increasing its annual revenue by $1 billion in the next few years by doing things it isn't doing now."

"it may begin assigning seats as soon as this winter."

"is readying a test of wireless Internet service on board its airplanes."

"Industry consultants said Southwest should also rethink its policy of one airplane type"

Here's the writeup on all of this:

Courtesy: Dallas Morning News

Southwest - Plotting A Different Course

http://www.dallasnews.com/sharedcont...us.ART.State.Edition1.35ad4b0.html
 
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SLCUT2777
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 7:15 am

Quoting KarlB737 (Thread starter):
"it may begin assigning seats as soon as this winter."

I think they will offer it at the time of fare purchase at Southwest.com, at no extra charge, and they will be included in the boarding group prior to the infamous A-B-C "cattle-herd." I don't see WN making an overnight move on this one, but a gradual transition to complete assigned seating by 2009.

Quote:
Mr. Boyd, president of the Boyd Group Inc. in Evergreen, Colo., said Southwest has to go to assigned seats to remain competitive with other airlines. The lack of assigned seats hurts Southwest when it enters new markets.
"This stuff about people are going to love, love, love this?" Mr. Boyd said of assigned seating. "Horse manure. The markets where they have to expand, people don't like it."
Passengers can get seat assignments, along with in-flight TV and a more comfortable Airbus airplane, when they fly low-cost Frontier Airlines between Denver and Orlando, Fla.
"At Southwest, you get a humorous boarding announcement," he said. "It's hurting them."--Dallas Morning News

What really hurts them is the level of repeat customers. With WN seating it is love them, or hate them. I for one don't wish to run the "cyber-gauntlet" 24 hours prior to flight time for an A-pass and have all the families and special needs passengers grab every premium seat. By having these folks go to on-line seat selection at fare purchase time, WN can then tweak the number of A-passes they award during this transition.

Quoting KarlB737 (Thread starter):
"The carrier has set a goal of increasing its annual revenue by $1 billion in the next few years by doing things it isn't doing now."

If WN wants to make serious money on flights, they need to go to the rest of North America, that means service to Canada, Mexico and the Caribbean. I think ti would be foolish to not expect WN to do this as they reach their market saturation level in the U.S.A.
DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
 
blsbls99
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 7:26 am

Was there any information on how their assigned seating testing did a while back in San Diego?
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OPNLguy
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RE: Southwest Model - "It's Not Going To Work Fore

Sun Aug 05, 2007 7:30 am

Re: the title of the thread "Southwest Model - "It's Not Going To Work Forever"...

"Southwest has to modify its model because parts of it don't work anymore," aviation consultant Michael Boyd warns.

"It'd be a lot easier to just keep doing what they're doing. They could be the great holdout – the low-cost, low-fare, short-haul, domestic, cattle car, plastic boarding pass airline. They could sail off into the sunset doing that," Mr. Klaskin said.

"You know what? That'll work well for another few years, no question. But they're smart enough to know it's not going to work forever."


Just so nobody gets the wrong idea, the inference that the SWA business model is somehow in need of a complete 100% overhaul is something of an overly-generalized statement. I have no doubts that we'll see some changes in certain areas (which I can't/won't divulge), but I tend to think that many underlying fundamentals will remain unchanged.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
catdaddy63
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 7:44 am

I don't know if we'll see assigned seating per se. Based on what has been posted here over the last few months I would expect to see tiers assigned to Rapid Reward members based on the number of flights they fly in a certain period of time.

From the WN website:

Notification of Rapid Rewards Rule Change: Effective December 8, 2007, Southwest Airlines reserves the right to amend, suspend, or terminate the Rapid Rewards program at any time, with 30 days notice. This constitutes a revision of Rapid Rewards rule #27, which currently states: Southwest Airlines reserves the right to amend, suspend, or terminate this program at any time, with six (6) months notice. Though we will always attempt to provide as much advance notice of changes as possible, this rule change allows us to implement enhancements or changes to Rapid Rewards


This tells me that changes are coming. I have flown 36 flights on WN in the last 8 months and would love to see some type of change to the boarding procedure. I think assigned seats would help shorten the turnaround time by loading the aircraft from the back to the front. But give us full Y paying frequent flyers first shot so we can get some bin space!
 
georgebush
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 7:49 am

So when are they going to install the first suites??
Al Gore invented global warming.
 
srbmod
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 7:54 am

You have to give them some credit for realizing that they have make some changes with the way they do things, as they've long passed being the "underdog" airline. The most recent generation of surviving LCCs (AirTran, Frontier, and JetBlue) offer a product that makes the WN product look in someways as bad as what the Big 6 have. You can't just compete on price anymore (something that Skybus and Spirit are trying to prove wrong), you have to be competitive in additional areas as well.

The assigned seating issue is definitely one that has them in the minority. Other than Skybus (who charges for "priority boarding"), Southwest is the only other airline that still eschews assigned seating.

One almost wonders if perhaps a business class cabin could potentially be on the horizon as well. While most LCCs don't have a business/first class cabin (F9, B6, NK [they've discontinued their Business Class product, but left the seats as a premium upgrade item, just no special service], SX), there is definitely a demand for such a product as proven by the success FL, TZ, and HP has had with such a product.

The wireless Internet service is definitely an interesting twist to say the least. I also wouldn't be surprised if they added a basic IFE offering like satellite radio.
 
KarlB737
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 7:54 am

Quoting OPNLguy (Reply 3):
Just so nobody gets the wrong idea, the inference that the SWA business model is somehow in need of a complete 100% overhaul is something of an overly-generalized statement.

I don't think anybody believes or that the article implies a !00% alteration. It think what is being considered are a few changes in the model which has for a long time gone unchanged. The mere fact that any change is being considered is really the heart of the matter.
 
ltbewr
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 8:08 am

To me, WN flights over 1-1.5 hours should have assigned seating and have some entertainment choices that would calm a lot of problems with seating as their flights get more crowed, get more pax who are not familiar with their style and their fares go up closer to the majors and other competitors.
WN probably has a lot more business and work travel related pax, especially post 9/11, due to their schedules, airports they operate to/from, on-time performance, reasonable late purchase fares vs. majors or other carriers and on the longer flights they offer. Those business/work flyers who I am quite sure WN wants to keep and attract more of, prefer assigned seating and not have to waste time in a cattle call line for the A-B-C system they have now. They are also going to have to deal with the aging of their staff, with it's additional retirement and health costs, higher fuel prices (especially as their hedges run off) and higher airport fees, higher aircraft costs and so on. As to another aircraft type, I disagree, but they should choose more models of the 737 with larger size and range.
 
OPNLguy
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 8:13 am

Quoting KarlB737 (Reply 7):
I don't think anybody believes or that the article implies a !00% alteration.

The article doesn't, but the thread subject kinda does...  Wink
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
socalfive
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RE: Southwest Model - "It's Not Going To Work Fore

Sun Aug 05, 2007 9:10 am

Quoting KarlB737 (Thread starter):
One of the things they do now puzzles me. I am surprised that they go directly into some big airports now where years ago that was unheard of. Is that a mistake? They used to locate a secondary airport so they could get in and out faster --- that was the plan. What happened?

Why it puzzles anyone is beyond me. This company has evolved, pure and simple. In the beginning it fought long and hard and just barely ever made it into the air. As it evolved and grew it chose secondary airports where they were able to quickly turn the aircraft-when possible. In one year, 1982, they evolved again and expanded into Phoenix, Los Angeles LAX, San Diego, Las Vegas and if memory serves SFO. That certainly is well outside this particular "Business model" everyone is so hung up on. LAX is sure as hell a MAJOR airport, so was PHX, both being examples where secondary airports could have been chosen in these markets instead.

Corporate evolution has gone from a comparatively conservative growth strategy to a much more aggressive strategy at times when it was opportunistic to do so based on market conditions and forces. There's no question Southwest would prefer secondary airports wherever possible and today they're well enough known to draw passengers 'out of the way' based on the strength of the parts of their "business model" that has never changed; a safe, solid, dependable, responsible, friendly, convenient and cost efficient company in business to get you where you need to go.

Some of you guys talk like WN flies only into podunct Arkansas and backwoods Wyoming and no where else. It's mentally draining to keep hearing topics brought up time and again about Philadelphia and Denver as "Culturally changing" Heart Stopping, WTF moves on the part of Southwest Airlines and for God's sakes, they're NOT. They were a slight departure from the usual but standing back and looking at the big picture they were sound business decisions on the order of market expansion done at a time they were strong enough to take on the fortress carriers in those markets. I feel pretty confident making this statement because there are people a hell of a lot more qualified making these decisions for that company than all of the A.net armchair dorks and oddly enough THEY have SOMEHOW managed to create and maintain the the most successful airline company of all time.

"They're in for challenging times" But guess what, this company is one hell of a lot better positioned to face challenging times due to the character of what is basically a single management team that endured, survived and even thrived more challenges in a short 35 year history than any other airline to date. The management behind all the others are comparatively rank amateurs, most of THEM being nothing more than over-paid employees with very little at stake. Herb, Colleen and the gang have known little else since 1971. Makes sense to me to just watch with interest and see what they do next and one of those things I'll bet they'll do FIRST is somehow survive the hedges!  Yeah sure
 
pizzaandplanes
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 11:17 am

Quoting KarlB737 (Thread starter):
"is readying a test of wireless Internet service on board its airplanes."

They're trying to market this feature towards business travelers who tend to be loyal towards the US majors.
A real man lands where he wants to
 
LGAtoIND
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 11:27 am

IMHO, WN will need to make changes in the upcoming years in order to survive. Their model was fine for a long time, but now FL, B6, and F9 all have far superior products and serve a better variety of destinations. Just this week I had the choice of taking Air Tran or Southwest for the same exact price, and I chose Air Tran. Since I have no particular allegiance to either airline, why on earth would I not pick the airline that has free assigned seating and free XM radio?
 
cjbmibe
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 11:28 am

This isnt so much on the expected forthcoming changes but on Airline USA (on ITV2 in the UK) I've noticed that Southwest doesnt actually give the pax thier boarding pass at checkin, but at another desk at the departure gate. At checkin the pax get an ATB style pass but they cannot use it to board.

Also, when pax miss flights they send the flight regardless of hold baggage status. I know in the UK its not permitted to depart until all pax are onboard and the bags are assigned to a passenger. If the passenger does not board then thier hold baggage is removed. Its plain and simple security. Its as a result of the Pan Am Lockerbie disaster.
I would have thought in the US post 11 September security would come before on time departures.
How can I soar like an Eagle when I have to work with these turkeys?
 
socalfive
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 12:08 pm

Quoting Cjbmibe (Reply 13):
I've noticed that Southwest doesnt actually give the pax thier boarding pass at checkin

Yes they do and at kiosks and online, etc etc
 
cjbmibe
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 12:19 pm

I dont know if they show what is called Airline USA in the US, but I can assure you that in what is shown there are many passengers having rows with gate staff because they lost thier seat as they did not go to the gate desk to receive thier boarding pass.

It appears that the pax hold what looks like a boarding pass but is not valid for travel, it must be exchanged at the gate for a boarding pass.

The gate agents even tell the pax who miss flights or lose seats that they did so because they did not checkin at the gate.
How can I soar like an Eagle when I have to work with these turkeys?
 
cjpark
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 12:49 pm

Quoting Socalfive (Reply 10):
"They're in for challenging times" But guess what, this company is one hell of a lot better positioned to face challenging times due to the character of what is basically a single management team that endured, survived and even thrived more challenges in a short 35 year history than any other airline to date. The management behind all the others are comparatively rank amateurs, most of THEM being nothing more than over-paid employees with very little at stake. Herb, Colleen and the gang have known little else since 1971. Makes sense to me to just watch with interest and see what they do next and one of those things I'll bet they'll do FIRST is somehow survive the hedges!

Herb and Colleen have taken packages and now being minimalized. Southwest is offering packages to older (highest paid) operations employees.

Maybe Southwest thinks it is house cleaning time to rid the airline of the throwbacks that impede progress due to the old we never did it that way before mindset that has to be cleansed from all companies from time to time.

OPNL did you get a package?
"Any airline that wants to serve the [region] can go to DFW today and fly anywhere they want," WN spokesman Ed Stewart
 
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par13del
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 12:55 pm

Anyone seen or played around with the cost benefit of assigned seating? It is mentioned on this site - along with their hedges and single fleet - that by now someone should have played around with the numbers to show how much more profitable and how load factors would increase with assigned seating.
B6 went to multiple a/c and they are having issues - new a/c to fleet as well as new in service -, slowed growth and fleet increase, how exactly does this show WN the "error" of their ways?

How about reducing frequency, number of a/c in fleet, number of employees, to increase load factors and a/c utilization, how about more red-eyes, are these more doable and cost effective? General consensus - generalization - is that for most airlines the problem and highest cost are employees, and with all th chpt. 11 filings, other carriers have lower cost than WN, so to get them in line, a reduction in capacity would be a shot in the arm.

Just giving another option rather than seating etc., and no I don't think they should follow the other airlines and look at fuel hedges as an option not worth considering.
 
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N202PA
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 1:24 pm

Quoting Cjbmibe (Reply 15):

I think that's the old way of doing things. The show you call "Airline USA" is the American version of Airline which aired from 2004-2005. I can attest to the fact that when one checks in (either at the counter or online) for a Southwest flight today, you get a boarding pass that is scannable for boarding at the gate. We just came back from an IAD-MCO-IAD trip last month, checked in online, and our printed paper 8 1/2"x11" boarding passes that we printed at home were collected and scanned at boarding time. They even had the boarding group (A, naturally) printed right on them.

Back in the day, you did have to check in and stop by the gate counter to pick up a plastic boarding pass with the boarding group printed on it. If they ran out of "A" passes, they moved to handing out "B" and so forth. I have not seen them do that for a couple of years now.
 
AirframeAS
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 1:53 pm

Quoting KarlB737 (Thread starter):
"Industry consultants said Southwest should also rethink its policy of one airplane type"

Those 'Industry Consultants' should be shot.  sarcastic  They have no idea what they are talking about. One aircraft type actually SAVES alot of money in crew scheduling, maintenance, etc etc.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
XT6Wagon
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 2:03 pm

So the best performing and largest domestic carrier NEEDS to change its ways???

SAY WHAT???

Whats next, giving Lance Armstrong a bunch of advice cause he is struggling with biking? Some Golf advice for Tiger perhaps?

I expect wireless internet to happen sooner rather than later as the cost over the life of a plane should be minimal and the benefits to be large to WN, even if its free.

Conventional IFE, I don't see happening until the cost of installation is cheap enough and the product is durable enough to make it a no brainer. Right now the lack of IFE is a huge plus to WN since they never have to spend time or money pissing a customer off when their IFE is borked. WN's nightly MX would help keep things going, but it remains that with planes that fly 4, 5 or 6 segments a day and 16hrs total time in the air... Its going to be hard to keep anything less reliable than solid aluminum at 100%
 
airbusaddict
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 2:35 pm

It is also interesting why they havent expanded in the upper midwest. The most suitable new airport north of omaha would probably be Sioux Falls, and with this new game plan they want to do, they could compete much with United, if they offered flights such as FSD-DEN (UA) and FSD-MDW (ORD for UA). Of course if that were to happen, a UA-WN war would be begin. And if they competed with united by also offering 5 flights daily to each destination, that would be great. my guess is that they wont enter Red Tail Market (MSP, FAR, etc) for maybe a few more years.
Finally F9! FSD-DEN 7-4-2011
 
txagkuwait
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 2:58 pm

I guess I will have to wade in, since I was at DAL Gate 25 on June 18, 1971 for the IAH inaugural...I was on the 4:45 pm HOU-DAL later that year for the Hobby inaugural....and was on the ^:25 am DAL-LBB inaugural on, as I recall, 5/20/77. The LBB inaugural was special because an engine caught fire and we turned around and went back to DAL. Lamar was supposed to have caught the 7:30 LBB-DAL inaugural and then the 8:30 DAL-MAF inaugural but couldn't since the 6:25 never made it in to LBB.....he rented a car and flew as fast as he could down US 385, cllecting 2 or 3 speeding tickets en route. But I digress.

I hope and pray that Kelly and the gand resist the temptation to F things up. Folks have been saying Southwest needs to change this or do that for 36 yrs. Lots of folks have lost lots of money by saying "we are going to be exactly like Southwest, except we are going to do this or do that differently. The one thing the always do differently is they fail to make money.

Herb and Colleen were too nicey nice and let the labor costs get a bit out of whack and have ridden off in to the sunset so they can avoid having to be mean. I don't blame them. Anyone who wants to attribute their departure to anything else is welcome, but that's the bottom line.

Despite labor costs that are high, Southwest does at least enjoy a decided productivity advantage that has allowed them to keep making money while paying out industry leading wages.

There is nothing as important as the single aircraft type. I don't care what some anal analyst says, that is not likely to change.

I am not sure assigned seats make that much difference. Flks fly on the despite the lack of assigned seats.

I doubt that there is a premium cabin in the works. MC (Muse/Transtar) had one while operating as a wholly owned subsidiary and yes, they are nice.......but they really don't generate that much in the way of extra revenue. IF (and it is a huge if) Southwest went to a Business Class cabin up front I think what you would see is the airline clinging to the practice of not assigning seats,.

I don't see the IFE as anything worthwhile, but I do see the inflight internet as absolutely key. Southwest's core customer....despite what people on A.net think.....is the business traveler. Businessmen can appreciate being able to use their e mail while zipping from one city to another. So many folks have laptops nowadays that the introduction of inflight wireless internet basically solves any entertainment issues....people would rather sure the net, yak in chat roms, watch flash videos, etc etc instead of an insipid rerun of "EverybodyLoves Raymond." So yeah, I think Southwest will introduce wireless internet on the flight and they very well may make it free.

I see Southwest continuing to back out of transcon/longhaul and put the focus back on short and medium haul stuff. That's where the money is. A transcon roundtrip will eat up one aircraft for an entire day and everyone wants to go for $99. The same plane can be used for roughly 4 roundtrips of hour-and-a-half flights or 6 roundtrips of 1-hr flights and the folks on those flights don't seem to bat an eye at paying $99 a whack. So tell me which has more potential....carrying 274 persons in one day or carrying 1,096 to 1,636 persons in one day.

Look at what they are doing in and out of Denver....the DEN-AMA-DAL and the DEN-OKC-DAL. I'd suggest that a DAL-LBB-DEN, DAL-MAF-DEN, maybe DAL-TUL-DEN could be in the cards. And as the emphasis on shorter haul continues, look for DEN-OMA and DEN-BOI. I think Kelly has come to the realization that whatever bump he sees in CASM for a reduction in average length of haul, he's going to benefit from a larger bump in yield.

I see that they've added a 3rd DAL-BHM nonstop, so don't be too surprised when they throw a couple of DAL-JAN nonstops at us. And in the spirit of new short haul stuff DAL-LIT-BNA twice a day wouldn't be too big of a surprise.

I think Southwest is smart enough to avoid repeating the mistakes of Braniff. It all boils down to not screwing with things that work just because analysts tell you that you need to.

If the pilots and/or other employee groups are smart.....they will agree to a B scale contract which allows Southwest to hire new folks at a much lower wage rate than the current employees are getting. A B scale does a couple pf things and I think their employees might be smart enough to figure this out. Lower paid new workers reduce the labors costs if the company grows. If the company grows, and labor costs come down, the company makes money, so the profit sharing goes up and the stock price jumps.....both of these things benefit employees who have stock options and all Southwest employees have profit sharing.

Plus a B scale in a contract with an airline that makes money is better than having a company run to the bankruptcy judge and have a Draconian B scale wage imposed on everyone.

Folks used t joke about how much more profit Southwest would make if they paid JetBlue wages. Heck, do you realize how much more money Southwest would make if they paid United wages?
 
dl767captain
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 3:24 pm

Southwest will have to start finding some ways yo generate revenue because with fuel prices going up fares will have to go up, but then south west loses its edge against other carriers that offer IFE. It is time for an update, not huge changes, but definately updates, IFE would be cool but expensive, maybe charge for it like hawaiian air. Maybe start partnering with international carriers that are also low cost
 
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aloha73g
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 4:05 pm

Quoting Par13del (Reply 17):
General consensus - generalization - is that for most airlines the problem and highest cost are employees, and with all th chpt. 11 filings, other carriers have lower cost than WN, so to get them in line, a reduction in capacity would be a shot in the arm.

The thing about Southwest is that even though they pay their workers more, they continue to be far more productive (F/As cleaning between flights, etc.) They do more than most airline employees and get paid accordingly. In previous negotiations the company has always said that better work rules justify the increased wages.

-Aloha!
Aloha Airlines - The Spirit Moves Us. Gone but NEVER Forgotten. Aloha, A Hui Hou!
 
JTR
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 4:10 pm

Simple question, does Southwest offer stock options or some sort of stock compensation to workers?
 
iflyswa
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 7:07 pm

Quoting Cjbmibe (Reply 15):
It appears that the pax hold what looks like a boarding pass but is not valid for travel, it must be exchanged at the gate for a boarding pass.

This is probably a "security document" similar to the document employee and dependent nonrevenue Customers use to enter the secure area through security and proceed to the gate. The security document establishes that the Customer has a PNR listing for the flight number printed on the document, which is a TSA requirement. As a nonrevenue Customer, boarding passes are issued only at the gate after the 10-minute rule. If it is reasonably certain that there will be empty seats on the airplane, a boarding pass may be issued at the ticket counter or at the gate before the 10-minute rule. The security document works the same way a boarding pass does to enter through security, but only the boarding pass may be used to board an airplane.

Quoting Cjpark (Reply 16):
Maybe Southwest thinks it is house cleaning time to rid the airline of the throwbacks that impede progress due to the old we never did it that way before mindset that has to be cleansed from all companies from time to time.

No, you're wrong. Southwest is offering buyout packages to these employees (this being only the second time in their 36-year history to do such a thing) in order to remain competitive with the scores of mismanaged and fiscally burdened legacy carriers that have repeatedly abused Chapter 11 bankruptcy protection over the years as a means to cut their costs. With airlines like Delta, United, and Northwest emerging from bankruptcy less encumbered and leaner all around (at the expense of Employee salaries, benefits, working conditions, etc.), Southwest now has labor costs that equal or surpass those of some legacies.

Quoting Cjpark (Reply 16):
OPNL did you get a package?

Is that really appropriate for this forum? To me, it seems a little personal. I don't believe the buyout packages were offered to headquarters folks, including dispatchers, but I could be wrong.

Quoting TxAgKuwait (Reply 22):
Herb and Colleen were too nicey nice and let the labor costs get a bit out of whack and have ridden off in to the sunset so they can avoid having to be mean. I don't blame them. Anyone who wants to attribute their departure to anything else is welcome, but that's the bottom line.

Good God, Herb is 76 years old. Do you even realize that most folks in a similar position would have retired 16 years ago?! Costs are up, sure, but not just at Southwest. What do you want, to cut out the parties? "Colleen" gifts? Birthday and anniversary cards? Any pisant accountant would say the airline could save thousands of dollars a year by eliminating those things. Southwest has some of the best numbers in the industry and the most productive workforce behind them, and who can say how much that's worth? Contrary to what you believe, Herb and Colleen are retiring because it's time. We all know Herb's certainly not one to take the coward's way out--that hasn't changed in him in 40 years. With the packages being offered to Employees, I think this was a good opportunity for Herb and Colleen to set an example for the 9000+ Employees Southwest is hoping will take the buyout, and a way for them to make their needed retirement more purposeful.

To contribute to the thread, Southwest will continue to innovate and implement changes to its business model just as it always has. In fact, Southwest has always been an industry forerunner in this area, even if Frontier, jetBlue, or Virgin America are leaving Southwest behind the times. Southwest hasn't grown to be the national force it is today by resting on its laurels for the past 36 years. When losing a fourth airplane to legal battles, the 10-minute turn was invented. When the legal battles were fought and won and cash was short, creative (and cheap) advertising and media attention came as a result of the "Love" theme. When the cities of Fort Worth and Dallas imposed on Southwest's right to fly from Love Field with the Wright Amendment, Southwest circumvented the limitations placed upon it by originating flights from IAH (originally), SAT, ABQ, and other cities unaffected by the Wright Amendment. When United Shuttle declared a fare war in California, Southwest fought back quickly and decisively (Southwest is now the biggest intrastate carrier in California). When Continental and United tried to limit Southwest's ticket sales by blocking Southwest from Apollo, Southwest did...by becoming the first airline to introduce ticketless travel. First airline to offer a website listing schedules and flights, and later to make a reservations. First to offer online check-in...and on and on. Southwest has been making changes to its model going on 37 years. To say that the model (from 1971) isn't going to work forever is not a revelation to anyone at Southwest, and shouldn't be to anyone that understands their business.

In an interview given May 8th with CNBC, Herb says that Employees come first, Customers second, and Shareholders third. At its core, this IS the Southwest Airlines model, folks. Whatever challenges Southwest might face and the changes it makes in order to overcome them, the core philosophy will never change. In the past, assigning seats, providing IFE, or introducing another fleet type haven't so much mattered to our success. Southwest has the proven ability to adapt and to be successful as long as its People are behind it. Now, time will tell what new innovations will shape the future at Southwest.

If anyone is interested in that interview, it was for a CNBC national advertising campaign to air on NBC networks this fall. http://video.on.nytimes.com/?fr_stor...9405efba3dcdfdad1427d306da1d797e37 More highlights from the interview are available at http://iam.cnbc.com You'll actually see me for a split second in the bottom of the human pyramid wearing a blue t-shirt!

[Edited 2007-08-05 12:30:47]
Opinions expressed by "iflyswa" are not those of Southwest Airlines Officers, Directors, or Employees.
 
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par13del
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 8:46 pm

Iflyswa, a lot of persons always look at the now without any care to the past, what WN is today is a result of their past, both the good and the bad, unfortunately, most folks can't take the time to take a trip down memory lane.

I fall on the side that in corporate America today and in the past, a strong hand at the head of the organization is required if you want to do something which "everyone else" in not doing, if WN did not have strong individual leadership, my opinion, it would not be what it is today. They have certainely "bucked" the trend in air travel in the US and the results are there to be seen, as in a lot of other major companies in US history who started as family business's , a individual has a vision and the strength of his conviction to see it through, sadly in todays environment, this type of thinking is going the way of the dinasours. Corporate culture, share holders, keeping up with the crowd, being like the rest, now prevents vision and innovation, I trust that in the coming future, WN does not succumb these failures from within.
 
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EA CO AS
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 8:51 pm

Quoting AirframeAS (Reply 19):
One aircraft type actually SAVES alot of money in crew scheduling, maintenance, etc etc.

True. It also, however, limits the markets you can profitably serve.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
drgmobile
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RE: Southwest Model - "It's Not Going To Work Fore

Sun Aug 05, 2007 9:28 pm

IMHO, WN will need to make changes in the upcoming years in order to survive.

I find most of the posts in this thread to be silly, speculative and not based on anything substantive. I'm sure Michael Boyd gets his share of clients and respect in the sector but I see more criticism than praise of his publicity-craving speculations (by folks who actually have some management experience and credibility in the industry).

Sure there has been reduction in revenue here, close call on profits there -- the numbers still stand on their own. Southwest Airlines recently announced its 65th consecutive quarter of profitability (There are four quarters in a year, so that works out to about 16). And it doesn't look like any of the "constructive critics" in this thread have based their "Southwest MUST do this, or should look at that" comments on anything other than personal travel preferences or anecdotal opinions, anyway -- certainly not on an actual long-term analysis of the financial performance of the company.

Considering the "walking dead" likes of Northwest, United, Delta, US Airways etc.. are still around despite their various announcements of tens or hundreds of millions in losses we have become accustomed to over the years, dire statements like "WN will need to make changes...in order to survive." seem a little silly.

Every smart company is going to continue to monitor the competitive landscape and monitor/experiment with its product offering to ensure it remains relevant. There is nothing particularly surprising, dramatic or dire about this.

Doogie
 
helvknight
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 9:52 pm

Quoting AirframeAS (Reply 19):
Those 'Industry Consultants' should be shot.

The thing I noticed is that it is is Boyd Group again, they have been saying things like this for a while. It is like reading Aboulafia on A, you know what he's going to say before you read it.

On the other hand the WN product looks a bit thin compared with the other US LCCs such as B6 and F9, maybe they do need some evolution.
I refuse to join any club that would have me as a member - Groucho Marx
 
access-air
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RE: Southwest Model - "It's Not Going To Work Fore

Sun Aug 05, 2007 10:21 pm

In my humble opinion the ONLY area the Southwest seems to be deficientrnin is that fact that they do not have a Commuter/Regional partnership with ANY one in some of their key cities.....Just think of the collateral damage they could do if they signed on a regional partner tornfeed them at say MDW, STL, MCI or PHX.......The online connecting traffic potential in these cities is huge and could bolster their bookings...
Howeverrnas we can see their reluctance to align with any Regional partner isrnvirtually locking out and Commuter/Regional service in cities, especially MDW....If ATA could make it work with their flights from smaller communities why isnt SWA willing do that same?
Southwest is trying to transform itself into something more of a linear airline and they dont really have "HUBs" as they like to say but they do.....

With the recent shutdown of Regions Air flights into and out of STL, air service was eliminated to CGI, IRK, OWB, MKL, TBN, UIN, BRL, COU, SPI, DEC, PAH and BMI....Imagine what a regional partner could do for these cities with direct online connections to SWA out ot STL....Plus the larger cities like MLI, SGF, CMI, PIA, CID, DSM, etc.....They claim that they are changing, butrnin this area they want no part of it....The online potential isrnthere....that problem is that these cities especially the smaller ones have had such crappy ill-timed flights in the recent past that passengers found it easier to drive to STL or elsewhere rather than flying from Home....

Imaginernthe Passengers they could steal away from the HP/US combo in PHX.....Irnreally think that if they want to become even more competitive theyrnneed to implement this kind of system in a few cities....

I mean, look at Rockrdo Illinois for an example.....Close to OHare and Midway via Van Galder Bus....However 4-5 well timed flights with good online connections to Southwest would beat the heck out of that mind numbing 2 HOUR Bus ridernto MDW....You could be in MDW in 45 minutes or less by air.....Plus yournwouldnt have to take a bus that puts you at MDW 2 HOURS before your flight, you would take care of that busienss at the RFD airport and maybe cut that checkin time down to 60-90 minutes and not have to worry about getting to MDW early... You all see where I am going with this???

Its about time Southwest decided to select or even start their own regional airline to serve theirsatellite communities surrounding the "Hubs" that they serve...

I know I would much rather drive 45-60 minutes to Rockford, for a 90 minute check in and be in Chicago in 45 minutes than to drive the 45-60 minutes it takes to get to Rockford, sit on a bus for 2 hours that needs to get me to MDW at the very least 2 hours before I am scheduled to fly out of MDW.....Or worse just drive myself into MDW...Which can take 120-180 minutes unles you like risking a speeding a ticket to be there 2 hours prior to departure....

Okay, my rant for Sunday is over.....I hope there are People in developedment at Southwest reading this thread....Whilst the majority of you all are complaining about assigned seats (Who really cares????) or the lack thereof, I think the issue I raised here has some relvenacy in alot of their markets, both old and new....

What say the rest of you???

Access-Air
Remember, Wherever you go, there you are!!!!
 
drgmobile
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RE: Southwest Model - "It's Not Going To Work Fore

Sun Aug 05, 2007 10:26 pm

In my humble opinion the ONLY area the Southwest seems to be deficientrnin is that fact that they do not have a Commuter/Regional partnership with ANY one in some of their key cities.....

Based on what? Southwest's job is to make money. Not to be everything to everyone or attract every potential passenger. Regional carriers are expensive and inconsistent with the airline's model. AirTran's experiment didn't last very long. Southwest has done just fine without a regional feeder. What are the numbers behind this proposal?

[Edited 2007-08-05 15:29:13]
 
OPNLguy
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 10:38 pm

Quoting Iflyswa (Reply 26):
I don't believe the buyout packages were offered to headquarters folks, including dispatchers, but I could be wrong.

You are correct, they were not, nor were pilots and mechanics included.

Quoting TxAgKuwait (Reply 22):
I don't see the IFE as anything worthwhile, but I do see the inflight internet as absolutely key. Southwest's core customer....despite what people on A.net think.....is the business traveler. Businessmen can appreciate being able to use their e mail while zipping from one city to another. So many folks have laptops nowadays that the introduction of inflight wireless internet basically solves any entertainment issues....people would rather sure the net, yak in chat roms, watch flash videos, etc etc instead of an insipid rerun of "EverybodyLoves Raymond." So yeah, I think Southwest will introduce wireless internet on the flight and they very well may make it free.

I fully agree--I think the internet would be a great move. The problem with providing IFE (as I see it) is twofold. First, there's the cost of the content, and secondly, your choices are never going to satisfy everyone. If you offer 30 channels, some folks won't like any of them and want 40 to choose from. Some want movies (of all types), some want games (of all types), some want music (of all types), and one can't just offer a billion different choices to keep everyone happy. Offering internet service would provide a transmission mechanism for content, not to mention the laptops themselves being able to provide whatever additional content (movies, music, games, surfing) the Customer specifically desired, including those who actually did want to watch a rerun of "______(insert name of insipid show here)______." I don't know if any possible future internet would be free, or for a fee, but when I travel, it's often worth it (to me) to have it--it's a value judgement that each person will have to make for themselves. Maybe we'd see powerports too...
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
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N202PA
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 11:01 pm

If ATA could make it work with their flights from smaller communities why isnt SWA willing do that same?

ATA didn't make it work. Chicago Express was a long-term failure and wound up going bankrupt. ATA's MDW hub operation was dismantled.
 
flyboyaz
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RE: Southwest Model - "It's Not Going To Work Forever"

Sun Aug 05, 2007 11:16 pm

I agree they don't have to change everything, but they do have to change. For a couple of decades they were very quiet, waiting for the chance to expand across the country...that happened of course and the downfall after 9/11 was an amazing opportunity for them. However times have changed yet again and they are not as competitive as they used to be. They rely strictly on domestic revenues, which currently (thanks in part to themselves) are very low. So yes their biggest problem is increasing revenue. International is where the money is at now so if they don't plan on doing that, they need to at least start charging for things that used to be free....or offer new premium services.

There is nothing wrong with them introducing another fleet type. Yes it's cost effective to operate only 1 type of aircraft, but you can't fly everywhere with a 737. They will chose wisely, more than likely it would be the Embraer series and purchase enough that they could expand to smaller markets and introduce service between thinner, existing markets...and remain cost effective.

It will be interesting to see how things pan out. Every party has to end sometime....
Catch a ride on a smile!
 
drgmobile
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RE: Southwest Model - "It's Not Going To Work Forever"

Mon Aug 06, 2007 12:00 am

I agree they don't have to change everything, but they do have to change.

Why does Southwest have to change any more slowly and incrementally than it always has? Where is the financial imperative? Southwest is still profitable. Long-term fuel costs are a concern, sure. But at the end of the day, all they need to do is ensure that they continue to fill their planes and that the revenue the passengers bring continues to outpace expenses. The early retirement initiative is one way of keeping costs low (and I don't think the first time Southwest has done this). Of course revenue opportunities will be looked at as well but the speculation in here is about some pretty dramatic product changes -- some of which would impact not only impact revenue but also expenses.
 
drgmobile
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RE: Southwest Model - "It's Not Going To Work Fore

Mon Aug 06, 2007 12:03 am

They will chose wisely, more than likely it would be the Embraer series and purchase enough that they could expand to smaller markets and introduce service between thinner, existing markets...and remain cost effective.

What is the source for the Embraer suggestion? Any Southwest executives say they were considering buying a new type of aircraft or is this speculation? Southwest is a huge operator of Boeing 737s and has used this leverage in the past when it was time for a new generation 737 to be developed.
 
access-air
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RE: Southwest Model - "It's Not Going To Work Fore

Mon Aug 06, 2007 12:06 am

Quoting Drgmobile (Reply 32):
Based on what? Southwest's job is to make money. Not to be everything to everyone or attract every potential passenger. Regional carriers are expensive and inconsistent with the airline's model. AirTran's experiment didn't last very long. Southwest has done just fine without a regional feeder. What are the numbers behind this proposal?

Did I say that my thoughts were FACT or OPINION????????????????????????
In my opening startement was that this was my OPINION.......................Period...

I donrt see how any of you people think that MY idea is so rediculous as copmpared to all the rest of the rhetoric concerning seat assignments and any of the other spew that seems to be taking over a majority of this thread....
I thought we have this FORUM so everyone has a chance to state their ideas...AND OPINIONS!!!

The only thng wrong with Regional airlines today is that you have GOOD ones and you have BAD ones.....Unfortunately, the bad ones are usually the ones that are the lowest bidders to set an agreement with a major carrier...That my freind is where you get your "expensive and inconsistant" idea from.
If major airlines really shared that opinon, why do such partnership exist??
Id love to see what would happen the day UA AA DL US/HP YX CO and NW all dropped their Regional carriers...Where would they possibly get all that important traffic from cities they somehow think are not worthy of full size airliners...

Usinng your example, Air Tran's flop with Air Wisconsin was a result of them operating those God forsaken CRJs on long runs instead of using them an short hauls, some thing sad to say that Air Tran is losing out on in the local level to the likes of ASA and DL in....Obviously Air Tran found that they could get put twice the passengers on their 717 for the same cost as the ZW CRJs....I still think Air Tran is losing a whole level of traffic because they do not fly smaller planes thru an regional system like ASA does for DL....

You speak of Regional Airlines being expensive and inconsistant.....Well if ALL regionals were operating under thier own names independantly and not roped into unrealistic contractual deals with one or more certain airlines maybe the that would level the playing field and the crap regionals would simply dry up and blow away.....

So dont blast my idea....It is just as valid as anything else that has been posted in this thread....My Opinion is just that MY OPINION.....

As for the reason Chicago Express went bankrupt, it was because as soon as SWA took over the ATA routes and gates, they were left with no one to feed at MDW.....Southwest with this philosphy of not relying on traffic feed form smaller communities is nuts.....
If you all try to tell me that the Chicago Express system didnt work, that could have been blamed on the fact that ATA and ChiExp couldnt always seem to get their connections to gel in a timely fashion, often times with connection times between 2-3 hours form each other or misconnecting completely...Case in point when ATA first started service into HNL from MDW.....The flight out in the morning left Chicago before ALL the Chicgao Express planes arrived into MDW to connect their passengers.....Obviously they needed to put their heads together and I believe that they eventually remedied this situation. However many other city pairs suffered from this same situation to other ATA destinations.
In the end tho, the reason ChiExp went BK is because SWA simply tossed them aside......
Plain and simply.....What is so hard to understand about that???

If Southwest is looking to change how they do business, besides trying to make them selves a Trans-con airline or a full-service airline they need to look at the potential from smaller markets....that they seem to completely ignore....
One day Southwest will try a regional experiment and I am confident that they will make it work!!

Thats all I have to say.....Have a nice Day..

Respectfully submitted, Access-Air
Remember, Wherever you go, there you are!!!!
 
srbmod
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RE: Southwest Model - "It's Not Going To Work Forever"

Mon Aug 06, 2007 12:31 am

Quoting Drgmobile (Reply 32):
AirTran's experiment didn't last very long.

Hindsight is 20/20. At the time AirTran JetConnect was started, it was during the Post-9/11 downturn in the industry. FL was doing what its' competitors were doing, transferring smaller routes to CRJs and other regional jets. The operation out of ATL was in many ways slapped together and not too much thought was given to it. I think that they used the wrong type of a/c for this operation. If they could have gotten some BaE-146/Avro RJs instead of the CRJs and offered a service that was very similar to the FL product, it may have been more successful. One thing that pretty much every airline that has someone running small jet service for them has now realized if that you have to have a premium cabin onboard. Part of the reason why FL has able to snag some passengers from it's competitors is that they're running 717s against their competitors Express/Connection service using regional jets.

Southwest does have a feeder system, it's called the automobile and the shuttle bus. Folks will travel in order to catch a Southwest flight. There are travelers in the Atlanta area that will still drive to BHM to fly WN instead of dealing with ATL. Because of this, DL at times offers competitive fares out of BHM (with a connection @ ATL) that are close to WN's fares.

One airline that may factor into what WN does in the future is Skybus. This airline could potentially put some pressure on WN. Even with some of their unusual airport choices, they really could siphon off passengers from WN (especially since some of the airports are in between some WN airports). WN may have to enter some small markets within 60-120 minutes of a major city in order to keep Skybus from them. WN will never go the ULCC route like Skybus (and now Spirit), as that would potentially alienate their core market.
 
TKV
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RE: Southwest Model - "It's Not Going To Work Forever"

Mon Aug 06, 2007 12:48 am

Quoting KarlB737 (Thread starter):
"The carrier has set a goal of increasing its annual revenue by $1 billion in the next few years by doing things it isn't doing now."

IMHO, nearly all the new ideas mentioned in the article would contribute to destroy the mainstay of Southwest success: SIMPLICITY.

To do so, would be a gigantic mistake !!

From all these ideas, the only one I would follow is to ensure that the checked baggage could be transferred to other airlines, demestic or international.

And if they wish to enter international service, which could not be performed without certain complications, it should be assigned to a separate sub-organization, in order not to interfer with the captioned simplicity of the domestic.

TKV
 
KarlB737
Topic Author
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RE: Southwest Model - "It's Not Going To Work Forever"

Mon Aug 06, 2007 1:23 am

Here, Here, Here gentlemen before a true riot breaks out here let me just say that I don't believe anyone believes Southwest should abandon their model here. Much of their 3 decade success is because of that alone. OKay we can all agree on that. No one can attack Herb for creating this model and holding on to it for continued success.

The title of this thread contains a quotation. This is one mans opinion. I put it there to get your attention and spark a professional conversation. Having said all of that I think we all agree that with the rising fuel cost issue alone WN has to consider a few alterations. It would be a mistake to alter the crux of the model which has worked so well.

I emphasize the word "few". OK now we are all clear on that and can take a second breath.

Now I pose this question to you keeping in mind how Southwest and every other airline has to be careful on their costs.

Would the cost of Internet, and television outweigh the benefit?

Many of you have touched on the second aircraft type issue with two sides surfacing. One the built-in costs associated with a second aircraft. Or the benefit of an aircraft that can slide into smaller markets or an aircraft that can slide into overseas markets. Obviously there is a balance of benefit that has to be examined there. I personally don't think adding a smaller aircraft for that purpose is the way to go because of increased costs at this time. However I might have retained Chicago Express which already existed, kept them seperate and allowed them to feed MDW. But that is a topic for another time.
 
AirRyan
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RE: Southwest Model - "It's Not Going To Work Forever"

Mon Aug 06, 2007 1:38 am

Watch out for the upcoming labor negotiations in the next couple of years, the pilots, mechs, and F/A's all have contracts coming up and since their already at the top of their respective pay scales in the industry, not only can the company no longer compete in terms of costs at these levels they really need to invoke concessions. 88% of the company is unionized and they all make more than any of their counterparts in any other airline, but the management is yet somehow forced to accept below average compensation relative to the industry as if they are somehow subsidizing the ridiculously over-compensated F/A's. Top pay for WN Captains is now greater than any legacy long-haul 747 or 777 pilot - that's just not conducive to long-term vitality.

WN has never had to deal with labor issues because they essentially just capitulated to whatever the unions asked for, but this issue too is one that the company needs to address and resolve especially after the post 9/11 bankruptcy realignments of the legacy carriers.
 
hoya
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RE: Southwest Model - "It's Not Going To Work Forever"

Mon Aug 06, 2007 1:39 am

Quoting AirframeAS (Reply 19):
Those 'Industry Consultants' should be shot. They have no idea what they are talking about. One aircraft type actually SAVES alot of money in crew scheduling, maintenance, etc etc.

WN actually flies three types of aircraft: 733, 735, and 73G. I'm sure there are differences in maintenance, scheduling, and other things that add some extra costs. Not the same thing as flying 737s and, say, EMB-170/190s, but to say that WN only flies one type of plane is not really true.

Quoting TxAgKuwait (Reply 22):
Despite labor costs that are high, Southwest does at least enjoy a decided productivity advantage that has allowed them to keep making money while paying out industry leading wages.

And WN enjoyed, and I believe still partly enjoys, paying below market prices for fuel, which has helped them big time the past couple of years. Fuel costs are going up, and they need to find more revenue as legacies and other LCCs are better able to match WN fares.

Quoting TxAgKuwait (Reply 22):
I see Southwest continuing to back out of transcon/longhaul and put the focus back on short and medium haul stuff. That's where the money is. A transcon roundtrip will eat up one aircraft for an entire day and everyone wants to go for $99. The same plane can be used for roughly 4 roundtrips of hour-and-a-half flights or 6 roundtrips of 1-hr flights and the folks on those flights don't seem to bat an eye at paying $99 a whack. So tell me which has more potential....carrying 274 persons in one day or carrying 1,096 to 1,636 persons in one day.

To play devil's advocate here, saying that WN can't make transcons work, while UA, B6, AA, and others can shows that WN has some issues to deal with, that they are not as competitive as they should be. Virgin America is starting off flying just transcons, so transcons can't be that bad if they think they can make money. You just probably need the right product (assigned seats, IFE) to compete well.

Boyd and other consultants are just saying that the competitive landscape is changing and WN must adapt. They're not saying WN will fail, but will need to make some adjustments if it wants to keep growing and continue its streak of continuous yearly profits.
Hoya Saxa!!
 
GoingAround
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RE: Southwest Model - "It's Not Going To Work Forever"

Mon Aug 06, 2007 1:43 am

Quoting OPNLguy (Reply 3):
e: the title of the thread "Southwest Model - "It's Not Going To Work Forever"...

"Southwest has to modify its model because parts of it don't work anymore," aviation consultant Michael Boyd warns.

It's not going to work forever. Eventually the earth will be engulfed by the sun, and the human race will be wiped out, so I agree with the thread title.

About Southwest flying into larger airports being an accident. I don't think this is the case, most people want low fares, but not to end up in the middle of nowhere, which draws a comparison (roughly) between Ryanair and Easyjet.

Easyjet don't always offer fair as cheap as Ryanair, but then again they often fly to the main airport of a city/area whereas Ryanair often flys to out-of-the-way airstrips to save cash.
 
737tanker
Posts: 367
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RE: Southwest Model - "It's Not Going To Work Forever"

Mon Aug 06, 2007 2:21 am

WN will make changes and will adapt, that is the Southwest Model. Assigned seating was tested in SAN. it wasn't successful enough to cause WN to add assigned seating. However look at what is being tested in SAT, a new boarding procedure. This new procedure has wheelchairs and other passengers needing assistance boarding first, then the "A" (1 thru 30 first) then families with children, then the normal "B"s and "C". This is being done so the "A"s can have the choice seats. If they can guarantee the "A"s the choice seats don't be surprised to see WN sell the "A" boarding group. That along could easily generate the $1B in revenue that WN is looking for.
 
socalfive
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RE: Southwest Model - "It's Not Going To Work Forever"

Mon Aug 06, 2007 2:35 am

Quoting GoingAround (Reply 44):
and the human race will be wiped out

And the longer this thread goes, I for one hope it's sooner than later.
 
SWALoveField
Posts: 151
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RE: Southwest Model - "It's Not Going To Work Forever"

Mon Aug 06, 2007 2:42 am

Quoting LTBEWR (Reply 8):
Those business/work flyers who I am quite sure WN wants to keep and attract more of, prefer assigned seating and not have to waste time in a cattle call line for the A-B-C system they have now.

I fly an average of 50-75 segments a year with WN and I DO NOT prefer assigned seating.

I like WN the way it is. My fellow business travelers out of LOVE generally feel the way I do.

Robb
Dallas, TX
 
JakeOrion
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RE: Southwest Model - "It's Not Going To Work Fore

Mon Aug 06, 2007 3:33 am

Quoting Blsbls99 (Reply 2):
Was there any information on how their assigned seating testing did a while back in San Diego?

I was involved with the SAN->LAS assigned seating test and it seemed like it took a little longer to board rather than the A-B-C seating system they use now.

Quoting Georgebush (Reply 5):
So when are they going to install the first suites??

I don't think this will ever happen.

Quoting Srbmod (Reply 6):
The most recent generation of surviving LCCs (AirTran, Frontier, and JetBlue) offer a product that makes the WN product look in someways as bad as what the Big 6 have. You can't just compete on price anymore (something that Skybus and Spirit are trying to prove wrong), you have to be competitive in additional areas as well.

This is exactly the reason why WN is doing so well, they are a no frills airline that get you to point to point for the cheapest buck possible. Everyone knows this, yet they are doing so well, then why is that?

Quoting XT6Wagon (Reply 20):

Conventional IFE, I don't see happening until the cost of installation is cheap enough and the product is durable enough to make it a no brainer. Right now the lack of IFE is a huge plus to WN since they never have to spend time or money pissing a customer off when their IFE is borked.

 checkmark  WN does not need to spend the money updating/repairing IFE. Besides, most of their ops are less than 3 hours so what's the point? I'm sure they are saving a lot of money on this alone.

Quoting DL767captain (Reply 23):
Southwest will have to start finding some ways yo generate revenue because with fuel prices going up fares will have to go up, but then south west loses its edge against other carriers that offer IFE. It is time for an update, not huge changes, but definately updates, IFE would be cool but expensive, maybe charge for it like hawaiian air. Maybe start partnering with international carriers that are also low cost

WN will still continue to have better fares due to 1) one aircraft type in the fleet, making it one of the more maintenance friendly airlines 2) Lack of IFE therefore no additional costs for said argument above 3) other carries will also HAVE to increase their fares as well to continue to meet break even point, therefore they would still be in the same position as today.

Quoting Hoya (Reply 43):
WN actually flies three types of aircraft: 733, 735, and 73G. I'm sure there are differences in maintenance, scheduling, and other things that add some extra costs. Not the same thing as flying 737s and, say, EMB-170/190s, but to say that WN only flies one type of plane is not really true

The 737 family is generic, meaning they have many similarities between each other. Its much cheaper to train one maintenance crew and get them up to speed on a derivative than introducing them to an entirely new aircraft. WN still saves a lot of money.

Quoting Hoya (Reply 43):
Boyd and other consultants are just saying that the competitive landscape is changing and WN must adapt. They're not saying WN will fail, but will need to make some adjustments if it wants to keep growing and continue its streak of continuous yearly profits.

Not to single you out, as there have been various other comments like this on this thread, but given that they have been doing this system for almost 40 years without fail, including the time of the 9/11 attacks and came out on top, its very hard to change a system that has proven its worth, and continues to do so.

If anything, they'll make very minor tweaks here and there, but their overall networking and business model is very economical and practical, and above all, simple.
Every problem has a simple solution; finding the simple solution is the difficult problem.
 
FreequentFlier
Posts: 1074
Joined: Sun Feb 25, 2007 4:30 am

RE: Southwest Model - "It's Not Going To Work Fore

Mon Aug 06, 2007 3:52 am

Quoting Iflyswa (Reply 26):
To contribute to the thread, Southwest will continue to innovate and implement changes to its business model just as it always has. In fact, Southwest has always been an industry forerunner in this area, even if Frontier, jetBlue, or Virgin America are leaving Southwest behind the times. Southwest hasn't grown to be the national force it is today by resting on its laurels for the past 36 years. When losing a fourth airplane to legal battles, the 10-minute turn was invented. When the legal battles were fought and won and cash was short, creative (and cheap) advertising and media attention came as a result of the "Love" theme. When the cities of Fort Worth and Dallas imposed on Southwest's right to fly from Love Field with the Wright Amendment, Southwest circumvented the limitations placed upon it by originating flights from IAH (originally), SAT, ABQ, and other cities unaffected by the Wright Amendment. When United Shuttle declared a fare war in California, Southwest fought back quickly and decisively (Southwest is now the biggest intrastate carrier in California). When Continental and United tried to limit Southwest's ticket sales by blocking Southwest from Apollo, Southwest did...by becoming the first airline to introduce ticketless travel. First airline to offer a website listing schedules and flights, and later to make a reservations. First to offer online check-in...and on and on. Southwest has been making changes to its model going on 37 years. To say that the model (from 1971) isn't going to work forever is not a revelation to anyone at Southwest, and shouldn't be to anyone that understands their business.

In an interview given May 8th with CNBC, Herb says that Employees come first, Customers second, and Shareholders third. At its core, this IS the Southwest Airlines model, folks. Whatever challenges Southwest might face and the changes it makes in order to overcome them, the core philosophy will never change. In the past, assigning seats, providing IFE, or introducing another fleet type haven't so much mattered to our success. Southwest has the proven ability to adapt and to be successful as long as its People are behind it. Now, time will tell what new innovations will shape the future at Southwest.

I don't think anyone is saying Southwest is going out of business anytime soon. They're saying WN needs to change. And while they have changed in the past (with great success), the change may have to be much more dramatic this time around. You can point to stories from 10-20 years ago about WN adopting previous changes with success, but those were in the past and they are now just....stories.

I hate to beat a dead horse on this as I've mentioned it many times, but WN's fuel hedges gave it a distinct advantage for the past several years and the hedges are rapidly receding. However, keep in mind, WN is still hedged at $50 a barrel for 95% of its fuel in 2007. (source: http://www.247wallst.com/2007/04/southwest_airli.html ) Given that oil is now roughly $75 a barrel, WN is still paying well below market rates. Despite this, the CEO has admitted in recent quarterly statements that WN is already being adversely affected by fuel. Well, they've got a long way to go to hit $75, which is what most of the other airlines are actually paying. You can write this off as no big deal, but this is saving the company hundreds of millions of dollars in 2007. They're still hedged fairly well in 2008 (65% at $49 a barrel), but are only at 25% in 2009 and the hedges will have a relatively negligable impact beyond that.

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