Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
Logos
Topic Author
Posts: 610
Joined: Mon Jan 24, 2000 10:47 pm

Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 1:29 pm

My apologies if this has been discussed, but it is in this morning's Orlando Sentinel and quoted in the Orlando Business Journal as if it's a new announcement. I hadn't seen as specific a timeline as this before. Here's the link

http://www.orlandosentinel.com/busin...rism-0127-20140127,0,7768735.story

Cheers,
Dave in Orlando
Too many types flown to list
 
compliancecheck
Posts: 132
Joined: Mon Nov 25, 2013 5:56 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 1:56 pm

I thought Delta wasn't due to receive the last Boeing 717 until some time later in 2015 ... will these planes just sit around between the end of this year and their delivery to DL or will that process be sped up?

When the 717 transfer was announced Delta anticipated receiving 36 717s in 2015...I can't imagine they'd take more than 5 or 6 a month, so at least mid-2015 for the final delivery.
 
SWADawg
Posts: 682
Joined: Tue Dec 03, 2013 6:43 pm

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 2:16 pm

Quoting compliancecheck (Reply 1):

Yes. The remaining 717's will be taken out of service and parked until Delta can absorb all of them in 2015. The reason for this is because the SLI agreement made with the FL/WN pilot groups required all Aircraft on property as of Jan 1, 2015 to be flown by pilots on the WN MSL. There is also no WN training or maintenance program with the FAA to continue to operate the 717 past year end 2014.
My posts are my opinion only and do not reflect the views of Southwest Airlines
 
MIflyer12
Posts: 9287
Joined: Mon Feb 18, 2013 11:58 pm

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 2:38 pm

Quoting compliancecheck (Reply 1):
I thought Delta wasn't due to receive the last Boeing 717 until some time later in 2015 ... will these planes just sit around between the end of this year and their delivery to DL or will that process be sped up?

When the 717 transfer was announced Delta anticipated receiving 36 717s in 2015...I can't imagine they'd take more than 5 or 6 a month, so at least mid-2015 for the final delivery.

If Delta has announced they're speeding up receipt of 717s, I have missed it. Maybe they'll want the capacity. Maybe they don't want to spike hiring/qualfiication needs.
 
ScottB
Posts: 7291
Joined: Fri Jul 28, 2000 1:25 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 3:08 pm

Quoting Logos (Thread starter):
My apologies if this has been discussed, but it is in this morning's Orlando Sentinel and quoted in the Orlando Business Journal as if it's a new announcement.

It was actually mentioned in LUV's Q4 earnings release on Thursday:

Quote:
Nine more 717s were removed from active service at year end 2013, and the remaining 66 717s are scheduled to be removed from the AirTran network by the end of this year, and transitioned to Delta through 2015. The remaining 35 AirTran Boeing 737-700s are scheduled to be converted to Southwest this year. During fourth quarter, we converted Memphis, Pensacola, San Juan, and Buffalo to Southwest, and launched Southwest service to Richmond. At year end 2013, all remaining domestic AirTran markets had Southwest service. We are pleased with the rapid improvement of our developing markets as we convert AirTran routes into Southwest and optimize our combined networks. With our international reservation system scheduled for implementation later this month, we remain on track to convert AirTran's seven international markets, along with its remaining domestic markets, by the end of this year. As planned, this will allow us to complete the AirTran integration and retire the brand by the end of 2014.
 
DCA-ROCguy
Posts: 4209
Joined: Fri Apr 21, 2000 5:03 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 4:15 pm

Quoting SWADawg (Reply 2):
Yes. The remaining 717's will be taken out of service and parked until Delta can absorb all of them in 2015. The reason for this is because the SLI agreement made with the FL/WN pilot groups required all Aircraft on property as of Jan 1, 2015 to be flown by pilots on the WN MSL. There is also no WN training or maintenance program with the FAA to continue to operate the 717 past year end 2014.

That was because WN management did not hold firm for a contract that would keep 717's economically affordable to fly. So of course WN would then subsequently have not set up a training or maintenance program to operate the 717 themselves.

Yet another casualty of airline consolidation. The 717 was an outstanding plane for low-fare service, and with a sizeable fleet of 88 frames that were profitable for AirTran, it's highly unlikely it wouldn't have worked for WN, too. Delta will no doubt get good use out of them as successors to the DC-9's.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
FlyPNS1
Posts: 5535
Joined: Wed Dec 01, 1999 7:12 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 4:25 pm

Quoting DCA-ROCguy (Reply 5):
The 717 was an outstanding plane for low-fare service, and with a sizeable fleet of 88 frames that were profitable for AirTran


Only if you had an extremely low cost structure, otherwise the 717 is not a good plane for low-fare service. Generally speaking, you'll notice no LCC wants planes with fewer than 120 seats. All the LCC's (B6, G4, NK, etc) are moving toward bigger planes. Only B6 has a similarly sized plane (the E190) and I don't see them taking a lot more of those in the future.

Quoting DCA-ROCguy (Reply 5):
That was because WN management did not hold firm for a contract that would keep 717's economically affordable to fly.

So were you really expecting the WN pilots to take a 40% pay cut to fly the 717??
 
DCA-ROCguy
Posts: 4209
Joined: Fri Apr 21, 2000 5:03 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 4:46 pm

Quoting FlyPNS1 (Reply 6):
Only if you had an extremely low cost structure, otherwise the 717 is not a good plane for low-fare service. Generally speaking, you'll notice no LCC wants planes with fewer than 120 seats. All the LCC's (B6, G4, NK, etc) are moving toward bigger planes. Only B6 has a similarly sized plane (the E190) and I don't see them taking a lot more of those in the future.

At 117 seats, the 717 is close to 120....but would have given WN a lower increment to work with at minimal cost.

Quoting FlyPNS1 (Reply 6):
So were you really expecting the WN pilots to take a 40% pay cut to fly the 717??

Where does the figure of 40% come from? In any event, there were already pilots trained and flying them on property for their existing salaries...AirTran pilots.

In any event, WN would best get used to dealing with their costs now, rather than later, before it costs them market share and they have to lay people off. Offering little perks like $10 upper-A boarding and gauzy TV ads will only get them so far. What differentiates them from legacies, period, is *substantially lower costs and substantially lower fares.* Great service is great, but I for one will only drive to BWI *to pay less.* Enough less to justify driving up there. That doesn't always happen nowadays. I won't be the only one.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
panampaul
Posts: 229
Joined: Wed Jan 23, 2013 4:01 pm

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 4:56 pm

Southwest is also introducing its first international flights.

Southwest to Offer International Flights

Quote:
At a news conference Monday, Southwest Airlines said it will begin to offer flights to international destinations and that its integration of AirTran Airways was in its final phase.

Southwest will offer flights to Aruba, the Bahamas, and Jamaica starting July 1, 2014....

..
 
FlyPNS1
Posts: 5535
Joined: Wed Dec 01, 1999 7:12 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 5:11 pm

Quoting DCA-ROCguy (Reply 7):
Where does the figure of 40% come from?

First year Captain pay for FL 717: $109/hr
First year Captain pay for WN 737: $191/hr

The WN pilots were never going to accept the type of payscale that FL had. In fact, even the FL pilots didn't want that payscale which is why they had been in a protracted 5 year contract fight with FL management prior to the merger.

Quoting DCA-ROCguy (Reply 7):
In any event, there were already pilots trained and flying them on property for their existing salaries...AirTran pilots.

But once the labor groups were merged, the FL pilots get WN pay scale.

Quoting DCA-ROCguy (Reply 7):
What differentiates them from legacies, period, is *substantially lower costs and substantially lower fares.* Great service is great, but I for one will only drive to BWI *to pay less.* Enough less to justify driving up there. That doesn't always happen nowadays. I won't be the only one.

Agreed that WN needs to keep it's costs competitive. However, the 717 wasn't going to do that. The 717 would have a higher CASM than any of WN's 73G's or 738's.

And based on WN's latest numbers, WN is still doing pretty well and next year is looking even stronger. I don't see how they could get a concessionary contract when the company is rolling in profits. WN's also going to get a gift when the lowest cost legacy carrier (US) gets merged into AA and overnight becomes a higher cost carrier. Not to mention UA that totally failed to get any cost synergies from their merger.
 
jbmitt
Posts: 677
Joined: Fri Jan 18, 2002 3:59 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 5:23 pm

I can't wait for the photo op to see 36 or more parked 717's waiting conversion to DL
 
Grisee08
Posts: 468
Joined: Thu Mar 07, 2013 4:20 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 5:37 pm

Quoting jbmitt (Reply 10):
I can't wait for the photo op to see 36 or more parked 717's waiting conversion to DL

That will be a very sad photo op. It will mark the end for one of the most well-known airlines of the 1990s and 2000s.
Alright Alright Alright!
 
XFSUgimpLB41X
Posts: 3961
Joined: Fri Aug 25, 2000 1:18 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 5:44 pm

Quoting DCA-ROCguy (Reply 7):
At 117 seats, the 717 is close to 120....but would have given WN a lower increment to work with at minimal cost.

That 117 seats is in a 2-class configuration. In the all coach WN configuration, it would have been well over 120 seats.

Quoting FlyPNS1 (Reply 9):
First year Captain pay for FL 717: $109/hr
First year Captain pay for WN 737: $191/hr

The WN pilots were never going to accept the type of payscale that FL had. In fact, even the FL pilots didn't want that payscale which is why they had been in a protracted 5 year contract fight with FL management prior to the merger.

First of all, no one makes captain year 1. Most junior captain was about year 10. There is always a joint agreement between the two merging airlines, and the lower paid airline is brought up to the higher paid airline's scale. At least that's the way it has worked in the past.

The fact is that WN didn't want to adjust to having a second fleet. The aircraft itself is close to the same CASM, but the pilot bidding and training, maintenance, and other system complexities was not something WN was willing to do.
Chicks dig winglets.
 
compliancecheck
Posts: 132
Joined: Mon Nov 25, 2013 5:56 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 7:13 pm

Quoting SWADawg (Reply 2):
Yes. The remaining 717's will be taken out of service and parked until Delta can absorb all of them in 2015.

Where do they typically get stored in the meantime? Victorville? Marana? I assume this is all at Southwest's expense?
 
srbmod
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 8:46 pm

Quoting FlyPNS1 (Reply 6):
Only if you had an extremely low cost structure, otherwise the 717 is not a good plane for low-fare service. Generally speaking, you'll notice no LCC wants planes with fewer than 120 seats. All the LCC's (B6, G4, NK, etc) are moving toward bigger planes. Only B6 has a similarly sized plane (the E190) and I don't see them taking a lot more of those in the future.

AirTran credits the 717s for saving them in the post-9/11 downturn. By that point, enough of the DC-9s and the remaining 732s had left the fleet and the cost savings in fuel and other expenses really started to add up for them. Plus the dispatch reliability for the 717s meant less cancellations and delays as well as passenger compensation. AirTran's pilots actually agreed to take a paycut after 9/11 to prevent layoffs and that also helped the airline (although it did come back to bite them when the contract was up for renegotiation).

Quoting compliancecheck (Reply 13):
Where do they typically get stored in the meantime? Victorville? Marana? I assume this is all at Southwest's expense?

Probably somewhere close to where the refurbishments are being done prior to delivery to Delta, which are being done at Cecil Airport (VQQ) in Jacksonville (In fact, it looks like FL just sent another down there this morning.).
 
ScottB
Posts: 7291
Joined: Fri Jul 28, 2000 1:25 am

RE: Southwest To Retire Airtran Brand End 2014

Mon Jan 27, 2014 9:06 pm

Quoting srbmod (Reply 14):
AirTran credits the 717s for saving them in the post-9/11 downturn. By that point, enough of the DC-9s and the remaining 732s had left the fleet and the cost savings in fuel and other expenses really started to add up for them. Plus the dispatch reliability for the 717s meant less cancellations and delays as well as passenger compensation.

I have no reason to doubt that, but it's also likely that almost any modern, new-build fleet of aircraft (73G or A319) would have brought similar benefits. FL did get a good deal on the aircraft due to J7 being the launch customer for the MD-95 and due to MD needing to find customers for that aircraft.

Quoting XFSUgimpLB41X (Reply 12):
The fact is that WN didn't want to adjust to having a second fleet. The aircraft itself is close to the same CASM, but the pilot bidding and training, maintenance, and other system complexities was not something WN was willing to do.

I recall back when the 73G's first started flying for FL, FL management made a comment about how they were delighted with the fact that the 73G offered them 20 extra seats for essentially the same trip cost as the 717. Even if the 717 were to be configured with 120 seats as a WN single-class aircraft, the 143-seat 73G provides nearly 20% more seats at a very small incremental cost.
 
CIDFlyer
Posts: 2189
Joined: Wed Apr 13, 2005 7:19 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 1:24 am

Wow....I'm surprised I havent seen this mentioned yet...FOUR years after the merger was announced it will finally be completed. Crazy that its taken that long.
 
airliner371
Posts: 2405
Joined: Wed Aug 22, 2012 9:53 pm

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 1:34 am

Something new today that doesn't deserve its own thread (by any means) but I noticed, AirTran's header on its website switched to "now a part of Southwest Airlines" from "Go, There's Nothing Stoping You."
 
usflyguy
Posts: 1757
Joined: Thu Jan 12, 2012 7:29 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 2:11 am

Quoting CIDFlyer (Reply 16):
Wow....I'm surprised I havent seen this mentioned yet...FOUR years after the merger was announced it will finally be completed. Crazy that its taken that long.

from Day 1 of this acquisition, the target date for completion was Jan. 1, 2015.
My post is my ideas and my opinions only, I do not represent the ideas or opinions of anyone else or company.
 
User avatar
Polot
Posts: 11508
Joined: Thu Jul 28, 2011 3:01 pm

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 2:22 am

Quoting CIDFlyer (Reply 16):
Wow....I'm surprised I havent seen this mentioned yet...FOUR years after the merger was announced it will finally be completed. Crazy that its taken that long.

Not surprising- this isn't a merger like DL/NW, UA/CO, or AA/US. This is an acquisition and WN (wisely) is taking their time digesting rather than rushing things as there are fewer immediate benefits for the combined WN/FL than the other examples I cited (who are very interested in synergizing their international networks and getting the new brand out globally).
 
INFINITI329
Posts: 2586
Joined: Mon Jul 02, 2012 12:53 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 7:43 am

Quoting airliner371 (Reply 17):
Something new today that doesn't deserve its own thread (by any means) but I noticed, AirTran's header on its website switched to "now a part of Southwest Airlines" from "Go, There's Nothing Stoping You."

This longgggggggg over due, The one thing that bothered me about this acquisition is that Southwest didn't put it the public's face that hey "Southwest & Airtran on a path to become one" To the average joe traveller they way WN has marketed the acquisition they would have no idea. Within days of the AA and US being approved signs were erected, newspaper ads taken and commercials made to inform the public. That's the way I feel it should be done, especially if the acquiring carrier has little to no presence in markets severed by the other carrier.
 
DCA-ROCguy
Posts: 4209
Joined: Fri Apr 21, 2000 5:03 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 3:20 pm

Quoting ScottB (Reply 15):
I recall back when the 73G's first started flying for FL, FL management made a comment about how they were delighted with the fact that the 73G offered them 20 extra seats for essentially the same trip cost as the 717. Even if the 717 were to be configured with 120 seats as a WN single-class aircraft, the 143-seat 73G provides nearly 20% more seats at a very small incremental cost.

My concern was that by eliminating the smaller aircraft, Southwest would eliminate access to low-fare service for thinner routes and markets. If the trip cost is almost the same, and it doesn't make a difference for access to thinner routes and markets, fair enough. Deregulation and competition are about making money by getting lower fares to as many people and markets as possible.

Quoting FlyPNS1 (Reply 9):
And based on WN's latest numbers, WN is still doing pretty well and next year is looking even stronger. I don't see how they could get a concessionary contract when the company is rolling in profits. WN's also going to get a gift when the lowest cost legacy carrier (US) gets merged into AA and overnight becomes a higher cost carrier. Not to mention UA that totally failed to get any cost synergies from their merger.

Long-term thinking. By tolerating high costs, WN weakens themselves for the future. They differentiate themselves, grow their markets, increase opportunities for profit, make themselves less vulnerable to oil price spikes and other destablizing factors, and offer the most stable employment, by making themselves *low cost.* That is their profit raison d'etre.

However, it is very like legacy carriers to keep increasing their costs by bad management and anticompetitive practices like consolidation. I for one am very unhappy to see US being turned into a higher-cost carrier. A few surviving megacarriers with high costs is *not* what deregulation and competition is supposed to bring. Give it a few years, and the political situation will become less comfortable.

Quoting FlyPNS1 (Reply 9):
But once the labor groups were merged, the FL pilots get WN pay scale.

Why? US Airways did just fine with two unmerged pilot groups. It's not ideal, but it sure didn't slow down US.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
FlyPNS1
Posts: 5535
Joined: Wed Dec 01, 1999 7:12 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 3:31 pm

Quoting DCA-ROCguy (Reply 21):
Long-term thinking. By tolerating high costs, WN weakens themselves for the future. They differentiate themselves, grow their markets, increase opportunities for profit, make themselves less vulnerable to oil price spikes and other destablizing factors, and offer the most stable employment, by making themselves *low cost.* That is their profit raison d'etre.

That's all good, but if you cut your employees pay, what kind of company will you have? WN is already struggling to keep rampers in some of the major markets (like BWI and MDW) because the pay is poor by big city standards.

Quoting DCA-ROCguy (Reply 21):
However, it is very like legacy carriers to keep increasing their costs by bad management and anticompetitive practices like consolidation.

You'll never attract and keep good employees if your business model is to perpetually cut their pay and benefits.

Quoting DCA-ROCguy (Reply 21):
A few surviving megacarriers with high costs is *not* what deregulation and competition is supposed to bring.

True, though I certainly believe we had too many carriers throughout most of the 80's, 90's and 00's. No one seems to upset that we only have three real package carriers left USPS, FedEx and UPS.

Quoting DCA-ROCguy (Reply 21):
Why? US Airways did just fine with two unmerged pilot groups.

USAirways is the exception and not a good way of doing business. Pitting unhappy employees groups against each other is no way to run a business long-term. It worked for US in the short-term but was eventually going to blow up in their face. Not to mention the FL pilots weren't going to tolerate being merged with WN, but not getting WN pay. And the WN pilots weren't going to allow lower paid FL pilots to be whip sawed against them.
 
DCA-ROCguy
Posts: 4209
Joined: Fri Apr 21, 2000 5:03 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 4:27 pm

Quoting usflyguy (Reply 18):
from Day 1 of this acquisition, the target date for completion was Jan. 1, 2015.

But we can be sure they wanted to offer code sharing and much greater seamlessness between FL and WN (including international flights) much sooner than they did. I was kind of surprised by that. WN staying off the interlining grid didn't mean they had to let their res system get so outdated that it couldn't even talk to an on-grid system like FL's.

Quoting FlyPNS1 (Reply 22):
That's all good, but if you cut your employees pay, what kind of company will you have? WN is already struggling to keep rampers in some of the major markets (like BWI and MDW) because the pay is poor by big city standards.
Quoting FlyPNS1 (Reply 22):
You'll never attract and keep good employees if your business model is to perpetually cut their pay and benefits.

Employee costs are only one part of the puzzle, of course, but they are one piece. Airlines are a business that can tolerate a certain degree of cost and still make money without anticompetitive practices. This is one reason mergers generally are bad: there's pressure to raise the lower-cost carrier to the higher-cost carrier's employee costs. So much for 'combination synergies.' At least in the case of the 717, the loss of the type apparently won't mean that the economics of smaller-increment routes change vis a vis the 73G.

Quoting FlyPNS1 (Reply 22):
True, though I certainly believe we had too many carriers throughout most of the 80's, 90's and 00's. No one seems to upset that we only have three real package carriers left USPS, FedEx and UPS.

Let shipping prices keep increasing as they have been, and we'll see how happy people are. We absolutely did *not* have too many carriers in any of the recent decades. We had the policy objective of deregulation: competition on *price* as well as product. There is no such thing as 'too many carriers,' that's just laissez-faire purism, and not how a free market should work. It's up to managements to make money without the lazy approach of anticompetitive tactics.

Quoting FlyPNS1 (Reply 22):
USAirways is the exception and not a good way of doing business. Pitting unhappy employees groups against each other is no way to run a business long-term. It worked for US in the short-term but was eventually going to blow up in their face. Not to mention the FL pilots weren't going to tolerate being merged with WN, but not getting WN pay. And the WN pilots weren't going to allow lower paid FL pilots to be whip sawed against them.

Most airline mergers shouldn't happen; DL-NW, UA-CO, AA-US, and WN-FL all should have been nixed. But when mergers do happen, managements need to play harder ball with unions at the outset. US needed to be very clear that the merger was not going to raise pilot costs, among many other things, and the East pilots just had to deal with it. But they didn't. So US ran two pilot groups. As I said, not ideal, but it worked just fine.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
User avatar
Polot
Posts: 11508
Joined: Thu Jul 28, 2011 3:01 pm

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 4:53 pm

Quoting DCA-ROCguy (Reply 23):
But when mergers do happen, managements need to play harder ball with unions at the outset. US needed to be very clear that the merger was not going to raise pilot costs, among many other things, and the East pilots just had to deal with it. But they didn't. So US ran two pilot groups. As I said, not ideal, but it worked just fine.

Mergers are not just about unions (employees) vs. management, it is also unions (of carrier A) vs. unions (of carrier B). The US pilot situation was mostly out of management's hands. The unions couldn't agree with each other (I believe mostly over seniority, not pay) despite attempts at binding arbitration- not much US management could do in that scenario as they can't just force anything upon the employees. It is not like US had the intention of keeping two pilot groups.
 
FlyPNS1
Posts: 5535
Joined: Wed Dec 01, 1999 7:12 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 4:57 pm

Quoting DCA-ROCguy (Reply 23):
There is no such thing as 'too many carriers,' that's just laissez-faire purism, and not how a free market should work.

It's exactly how the free market works. If there are too many companies fighting for not enough customers, eventually some of the companies die off or merge. It happens in almost every industry.

Granted, the last few mergers probably don't fall under that category, but most of the carriers that died in the 80's, 90's and 00's were sickly and doomed to fail anyway. And let's face it, no one can make money in today's environment on the $39 short-haul and $99 long-haul fares that you dream of from the past. Those fares don't even cover the fuel bill on many flights, never mind everything else.

Quoting DCA-ROCguy (Reply 23):
US needed to be very clear that the merger was not going to raise pilot costs, among many other things, and the East pilots just had to deal with it. But they didn't. So US ran two pilot groups. As I said, not ideal, but it worked just fine.

But in the case of WN/FL, the pilots (particularly the FL ones) would have likely begun to take action against management if they were kept on a lower pay scale. As was, FL was already starting to see its operational performance decline as the FL pilots had been in a long protracted fight with FL management.

In the long-term, these mergers will actually be somewhat bad for airline labor and keep labor costs down. The threat of a strike is now non-existent as no President would let any of the big 4 (AA/UA/DL/WN) go on strike, so labor has totally lost a bargaining chip there.
 
ScottB
Posts: 7291
Joined: Fri Jul 28, 2000 1:25 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 6:24 pm

Quoting FlyPNS1 (Reply 25):
It's exactly how the free market works. If there are too many companies fighting for not enough customers, eventually some of the companies die off or merge. It happens in almost every industry.

Mergers don't necessarily happen because there are "too many companies." The rationale for enacting antitrust laws lies in the fact that monopolies and oligopolies frequently use their control of the supply side of the market to extract prices at levels which are harmful to consumers. If permitted, you can bet that DL, AA, & UA would merge and it wouldn't be about survival. Perhaps you're talking about a completely free market with zero regulation whatsoever, but that in itself can have very harmful consequences.

Quoting DCA-ROCguy (Reply 21):
My concern was that by eliminating the smaller aircraft, Southwest would eliminate access to low-fare service for thinner routes and markets. If the trip cost is almost the same, and it doesn't make a difference for access to thinner routes and markets, fair enough.

IMO the issue with smaller markets for WN is economy of scale, rather than size of gauge. The ability to outsource airport staff in small markets helps, but virtually every FL city closed by WN had three or fewer flights; the rest (SRQ, PHF, DFW) were close to existing WN stations.
 
DCA-ROCguy
Posts: 4209
Joined: Fri Apr 21, 2000 5:03 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 6:29 pm

Quoting FlyPNS1 (Reply 25):
Granted, the last few mergers probably don't fall under that category, but most of the carriers that died in the 80's, 90's and 00's were sickly and doomed to fail anyway. And let's face it, no one can make money in today's environment on the $39 short-haul and $99 long-haul fares that you dream of from the past. Those fares don't even cover the fuel bill on many flights, never mind everything else.

Given that I haven't mentioned specific fares, or 'dreaming' of anything, it's not clear why you mention them. I for one would not expect ordinary non-refundable fares like the ones you mention, as they probably aren't sustainable. But $250-300 for short-haul RT nonrefundable low-bucket, sorry, that's over the top. No go. But $150-200 as a norm in that category with high oil prices is quite reasonable. If a carrier can't make money on a fare mix with that on the low end for short-haul, they shouldn't be in the business.

The 80's were understandably a 'wild west' time, as the industry was learning how to be responsible for its own destiny. No would expect a ton of small ten- or 20-market mainline a/c carriers to be the norm. Some of them were going to grow into bigger carriers, be acquired, or go under. Especially since many of them seem not to have been well-managed. But say, the 2000-2008 period, a more mature situation with say six legacies and three or four big LCC's, that's much more stable. And it should have been allowed to remain.

Jim

[Edited 2014-01-28 10:31:29]

[Edited 2014-01-28 11:03:56]
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
FlyPNS1
Posts: 5535
Joined: Wed Dec 01, 1999 7:12 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 7:13 pm

Quoting DCA-ROCguy (Reply 27):
But $250-300 for short-haul RT nonrefundable low-bucket, sorry, that's over the top

But why is that over the top? For a short-haul 500 mile segment, you'll likely need a RASM of about 20 cents/mile to make a respectable profit (10% profit margin). That would equate to a fare of $200 r/t, BEFORE taxes. Once you add in taxes, you're close to $250 total fare. Of course, you can charge less than that for advanced purchase, but that requires gouging last minute travelers with much higher fares.
 
DCA-ROCguy
Posts: 4209
Joined: Fri Apr 21, 2000 5:03 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 9:35 pm

Quoting ScottB (Reply 26):
IMO the issue with smaller markets for WN is economy of scale, rather than size of gauge. The ability to outsource airport staff in small markets helps, but virtually every FL city closed by WN had three or fewer flights; the rest (SRQ, PHF, DFW) were close to existing WN stations.

AirTran seemed to know to make money on small stations. That is very much a loss for the industry, and for medium-smaller-size markets, that WN doesn't want to figure out. Allegiant can get people to sunspots, but they're not a full-service airline that can get people to a hub and lots of connections to business markets.

Quoting FlyPNS1 (Reply 28):
But why is that over the top? For a short-haul 500 mile segment, you'll likely need a RASM of about 20 cents/mile to make a respectable profit (10% profit margin). That would equate to a fare of $200 r/t, BEFORE taxes. Once you add in taxes, you're close to $250 total fare. Of course, you can charge less than that for advanced purchase, but that requires gouging last minute travelers with much higher fares.

20 cents RASM sounds very high to me (unless, maybe, you're discussing a CRJ-200), and even a profit expectation of 10 percent seems high. Airlines are a somewhat thinner-margin business than most and should expect a stable, not high, return. Taxes are another story, as they're way too high, but even so they shouldn't push it that high. In any event, I don't buy a $250 figure for that fare segment, or the idea that last-minute travelers would need to be gouged to support it. AirTran certainly didn't need to charge that, and they were doing fine.

Jim

[Edited 2014-01-28 13:55:33]
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
FlyPNS1
Posts: 5535
Joined: Wed Dec 01, 1999 7:12 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 10:32 pm

Quoting DCA-ROCguy (Reply 29):
AirTran seemed to know to make money on small stations.

Yes and no. FL failed out of many smaller markets (SAV, CHS, TLH, DAB, GSO, MOB, TOL, etc). I would say FL's small market record was spotty at best. And even some of their other "small" markets weren't really that small. Places like FNT, PHF and CAK were really pulling traffic off of larger metropolitan areas.

Quoting DCA-ROCguy (Reply 29):
20 cents RASM sounds very high to me (unless, maybe, you're discussing a CRJ-200), and even a profit expectation of 10 percent seems high

For a short stage length of 500 miles, you'll need a RASM close to that if you want a real profit. Mainline CASM's typically run around 12-14 cents for most carriers, but that's at a much longer average stage length. Since CASM increases as stage length shrinks, you'll need close to 20 cents.

I'm not sure why 10% is all that high to you. In theory, the airlines should probably even aim higher knowing that in bad times (economic recession, fuel spike, terrorism), they'll likely make nothing or lose money.

Quoting DCA-ROCguy (Reply 29):
AirTran certainly didn't need to charge that, and they were doing fine.

But FL had unrealistically low costs that weren't going to last. FL did well in the early 00's, but they did so on the backs of their employees. By 2009, the employees were unhappy, FL was getting beaten up in ATL (having cut almost 20% of their flights) and was struggling to find places to grow. Even FL management was trying to push a merger through with YX to try and get the MKE hub and also adding G4 harassment routes.

FL thrived from 2000 to 2007, but from 2007 to 2010 the carrier was starting to flounder and showed serious deficiencies that management had no clear plan to overcome.
 
User avatar
TVNWZ
Posts: 2293
Joined: Fri Feb 17, 2006 9:28 am

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 10:48 pm

Quoting FlyPNS1 (Reply 30):
But FL had unrealistically low costs that weren't going to last. FL did well in the early 00's, but they did so on the backs of their employees. By 2009, the employees were unhappy, FL was getting beaten up in ATL (having cut almost 20% of their flights) and was struggling to find places to grow. Even FL management was trying to push a merger through with YX to try and get the MKE hub and also adding G4 harassment routes.

FL thrived from 2000 to 2007, but from 2007 to 2010 the carrier was starting to flounder and showed serious deficiencies that management had no clear plan to overcome.

This is what ultimately lead to the deal with WN. Lucky MKE and he merger with YX went south or FL would not have been able to hold on for as long as they did. The end game for FL was to sell. All they could do.
 
User avatar
scbriml
Posts: 19696
Joined: Wed Jul 02, 2003 10:37 pm

RE: Southwest To Retire Airtran Brand End 2014

Tue Jan 28, 2014 11:51 pm

Well, it will be a real shame to see those colours go.   

View Large View Medium
Click here for bigger photo!

Photo © Steve Brimley
View Large View Medium
Click here for bigger photo!

Photo © Steve Brimley


View Large View Medium
Click here for bigger photo!

Photo © Steve Brimley
View Large View Medium
Click here for bigger photo!

Photo © Steve Brimley

Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
DCA-ROCguy
Posts: 4209
Joined: Fri Apr 21, 2000 5:03 am

RE: Southwest To Retire Airtran Brand End 2014

Wed Jan 29, 2014 2:31 pm

Quoting FlyPNS1 (Reply 30):
Yes and no. FL failed out of many smaller markets (SAV, CHS, TLH, DAB, GSO, MOB, TOL, etc). I would say FL's small market record was spotty at best. And even some of their other "small" markets weren't really that small. Places like FNT, PHF and CAK were really pulling traffic off of larger metropolitan areas.

FL stayed in the small markets where they made money, and exited the ones where they didn't. They were quite strict about their stations making money. Apparently the majority did.

Quoting FlyPNS1 (Reply 30):
For a short stage length of 500 miles, you'll need a RASM close to that if you want a real profit. Mainline CASM's typically run around 12-14 cents for most carriers, but that's at a much longer average stage length. Since CASM increases as stage length shrinks, you'll need close to 20 cents.

Again, airlines are a business that cannot have an unrealistic profit expectation. Short-haul is part of the mix, and I doubt FL was anywhere near 20 cents even on short haul. Even current oil prices couldn't push it that high.

Quoting FlyPNS1 (Reply 30):
But FL had unrealistically low costs that weren't going to last. FL did well in the early 00's, but they did so on the backs of their employees. By 2009, the employees were unhappy, FL was getting beaten up in ATL (having cut almost 20% of their flights) and was struggling to find places to grow. Even FL management was trying to push a merger through with YX to try and get the MKE hub and also adding G4 harassment routes.
FL thrived from 2000 to 2007, but from 2007 to 2010 the carrier was starting to flounder and showed serious deficiencies that management had no clear plan to overcome.

FL had the costs that its management wisely achieved. The phrase "backs of their employees" is unintelligible here. FL never had to do a costs-related bankruptcy, which is usually what that phrase refers to. They paid what the market bore, and had very good employees as I saw in many stations. They also were diversifying; the MKE hub was working fine (thankfully without YX, they would have badly overpaid had they gone through with that transaction) and they had ATL rationalized. I think FL would have done just fine.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
srbmod
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Southwest To Retire Airtran Brand End 2014

Wed Jan 29, 2014 3:01 pm

Quoting FlyPNS1 (Reply 30):
But FL had unrealistically low costs that weren't going to last. FL did well in the early 00's, but they did so on the backs of their employees.

Not to mention having such high turnover (at least on the ramp) at ATL that it helped keep the payroll lower (I worked there from June 1999 until May 2000.). To give you an example of how high the turnover rate was on the ramp at ATL, I was halfway up the seniority list after 10 months and had enough seniority to get Friday/Saturday off days and could have even gotten on the day shift. Not too mention you had training classes in which only a quarter or a third of the people would complete it and most of those would quit within 3-4 months (There was a training class that a month after mine in which everyone had quit within a month and several quit the first week and one quit the first day.) Still not as bad as ASA though, as the turnover on their ramp was so high that I had a Friday/Saturday line less than 4 months after I started there. I actually made better money at ASA than I did at AirTran, and that's including the shift differential I got at FL. I'm not even including the "overtime" I worked at ASA (We were still using paper time sheets and supervisors used to bribe folks to stay late by crediting them with overtime that they really didn't work. I worked a K2 shift, which was the closing shift and even if I got off on time, supervisors will still give me 4 hours of overtime. No wonder DL eventually took over the ramp from them.).

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos