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olddominion727
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Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 5:08 pm

I know they don't get the fuel breaks they used to
DL & VX are moving into DAL with some force to destinations people really wanna go beyond TX perimeter
Their fares in MANY markets far surpass their competitors

WASSUP?

I know buying FL has been hard and fuel prices have gone up
but $800 SJC-BNA DISCOUNTED!!! 12 mos ago it was $600 (which was high)... compared to their competition
Many CA/West Coast short haul Markets seems to be getting up there... SJC-PHX or SEA $800
OAK/SJC-LAX $500... it was never EVER this high...

You never see any "Freedom to Fly" Advertisements anymore. Probably because they know people would rather drive than pay their fares.

It's sad to see FL gone. They had lower fares than WN. DL clearly is not as threatened by WN as they were with FL in ATL. WN in a fair amount
of markets is more expensive.

I would think they could capitalize on HAWAII... SMF/OAK/SJC/BUR/SNA/PHX/LAS/SAN/PDX/RNO all of these markets could do really well
especially at the fares they're charging for everything.

Curious, does anyone have facts as to why their fares are so high? I know their salaries (except pilots) are quite low $12 hr in SJC will not cut.
Especially when McDonald's pays $14-15 hr
Are we going to be forced back into a modified "regulation" by the government?
CO, AQ, NW, FL, WP, US, HP are all gone in the last 5 years...
 
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NWAROOSTER
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 5:44 pm

In my opinion, Southwest did not make a smart business decision when they acquired AirTran. One of the reasons was to eliminate competition from AirTran and gain a fist full of 737-700s. But hey did not think out all the other consequences such as would the 717 really work out. The extra routes and destination cities that did not fit into their operation and excess personnel. For all practical purposes, Southwest "paid" Delta to take the 717s off their hands. Southwest may find themselves in deeper trouble if a couple more low cost airlines appear on the seen and start cutting into their operation.
This is not the airline that Herb Keller envisioned The future is going to catch up with Southwest Airlines.   
Procrastination Is The Theft Of Time.......
 
Cubsrule
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 5:48 pm

Quoting olddominion727 (Thread starter):
I know buying FL has been hard and fuel prices have gone up
but $800 SJC-BNA DISCOUNTED!!! 12 mos ago it was $600 (which was high)... compared to their competition

Perhaps there are good examples of this issue, but Bay Area-BNA--where WN was the LOW fare carrier in the last quarter for which data are publicly available with an average o/w fare of $296--isn't one of them.
I can't decide whether I miss the tulip or the bowling shoe more
 
olddominion727
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 6:16 pm

um SJC-BNA was not the lowest. I fly it 2x a week for work... over the summer they are the highest. They also cut OAK-BNA n/s service other services out of BNA...
sending the planes to DEN and other cities FL used to FLY.
 
QANTAS747-438
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 6:41 pm

Quoting olddominion727 (Thread starter):
SJC-PHX or SEA $800
OAK/SJC-LAX $500... it was never EVER this high...

True. Several years ago, WN had a cap on airfare. I think that no ticket would cost over $400. That used to be the max. May have been around 2006/2007.

Quoting olddominion727 (Thread starter):
You never see any "Freedom to Fly" Advertisements anymore. Probably because they know people would rather drive than pay their fares.

No. They got a new ad agency.

Quoting olddominion727 (Thread starter):
I would think they could capitalize on HAWAII

If it were profitable, WN would do it. WN has said that there will be no limit on the number of Rapid Rewards seats on a plane. Can you imagine the bath WN would take if it flew its Hawaii routes with 100% LF of FREE seats?

Quoting olddominion727 (Thread starter):
I know their salaries (except pilots) are quite low $12 hr in SJC will not cut.

$12/hr is the salary around year 3 of employment. It doubles from there. I don't think McDonalds' salary does that.

Quoting olddominion727 (Thread starter):
it was never EVER this high...
Quoting olddominion727 (Thread starter):
especially at the fares they're charging for everything.
Quoting olddominion727 (Thread starter):
why their fares are so high?

It really seems like you've already made up your mind on the topic.
My posts/replies are strictly my opinion and not that of any company, organization, or Southwest Airlines.
 
Cubsrule
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 6:49 pm

Quoting olddominion727 (Reply 3):
I fly it 2x a week for work... over the summer they are the highest. They also cut OAK-BNA n/s service other services out of BNA...

Are you suggesting that WN is lying to the federal government when it reports fare and traffic data? If you don't believe the data, I really can't help you.
I can't decide whether I miss the tulip or the bowling shoe more
 
airliner371
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 7:06 pm

SWA just made a record second quarter profit. Yeah, they are in trouble....

Quoting olddominion727 (Thread starter):
DL & VX are moving into DAL with some force to destinations people really wanna go beyond TX perimeter

Except a decision has not been made. And DL has been removed from consideration.
 
usflyguy
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 7:12 pm

Quoting olddominion727 (Thread starter):
I know they don't get the fuel breaks they used to
DL & VX are moving into DAL with some force to destinations people really wanna go beyond TX perimeter
Their fares in MANY markets far surpass their competitors

WASSUP?

I know buying FL has been hard and fuel prices have gone up
but $800 SJC-BNA DISCOUNTED!!! 12 mos ago it was $600 (which was high)... compared to their competition
Many CA/West Coast short haul Markets seems to be getting up there... SJC-PHX or SEA $800
OAK/SJC-LAX $500... it was never EVER this high...

You never see any "Freedom to Fly" Advertisements anymore. Probably because they know people would rather drive than pay their fares.

So higher fares than usual and higher load factors than usual mean that they are having long-term financial issues? I'm not sure I understand your logic. It's one of those basic principles... Supply and Demand.
My post is my ideas and my opinions only, I do not represent the ideas or opinions of anyone else or company.
 
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par13del
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 7:12 pm

Quoting olddominion727 (Thread starter):
I know they don't get the fuel breaks they used to

They do not invest in as much Oil Options as they did before, too many complaints of them being an oil company and not an airline, it worked, no one calls them an oil company any more  
Quoting olddominion727 (Thread starter):
I know buying FL has been hard and fuel prices have gone up

They eliminated one competitor, they were not able to do the same to Frontier so next best thing

Quoting olddominion727 (Thread starter):
Curious, does anyone have facts as to why their fares are so high?

No more oil options so their prices have risen. In the same period, the other airlines have reduced their expenses via Chpt.11 so they can now afford to compete on price ignoring the higher fuel prices which are equal to all.

Quoting QANTAS747-438 (Reply 4):
True. Several years ago, WN had a cap on airfare. I think that no ticket would cost over $400. That used to be the max. May have been around 2006/2007.

I believe they still do have a cap on their walk up fares, its just not $400.00 any more.
 
travaz
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 7:17 pm

I can find quite a few fares SJC to PHX for 260 RT so not sure if thats accurate. Depart 4-14 return 4-17 Same for LAX and SEA .
 
Beardown91737
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 7:41 pm

Quoting QANTAS747-438 (Reply 4):
$12/hr is the salary around year 3 of employment. It doubles from there. I don't think McDonalds' salary does that.

Doesn't cut it at ONT either.
135 hrs PIC (mostly PA-28) - not current. Landings at MDW, PIA, JAN.
 
AWACSooner
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 7:52 pm

Quoting NWAROOSTER (Reply 1):
This is not the airline that Herb Keller envisioned The future is going to catch up with Southwest Airlines.

Who is this Herb Keller you speak of?

Yah, the future is gonna catch up with a lot of airlines...and a lot of them will fail before WN even posts a losing year.
 
airliner371
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 8:38 pm

Quoting NWAROOSTER (Reply 1):
This is not the airline that Herb Keller envisioned

I have said it before and will say it again. Herb was an incredible leader and I will always look up to him, but in Today's environment his Southwest would be dead. And if Herb was around over the past decade, he would have had to make the same tough decisions Gary Kelly has had to make. The only difference is Herb left before those changes needed to be made.

What is the Southwest of Today isn't bad by any means in terms of employee treatment etc... so the best part of the original Southwest is still there.

[Edited 2014-04-30 13:39:35]
 
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seabosdca
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 8:46 pm

Quoting olddominion727 (Thread starter):
Is WN Financially Having Issues Long Term

What kind of "issues?"

They are profitable and will stay that way. They're not going anywhere, and they have no need to consolidate. They still have an appealing business model.

But they don't have the pricing power they used to, because their cost structure is now really no different than that of the other legacies on the domestic side. They aren't an LCC anymore no matter how much they market themselves as such.

And they bit off a bit more than they could comfortably chew with AirTran. Their resources have been directed over the last couple of years to integrating AirTran rather than to growing the network. Growth is also problematic for other reasons -- they are running out of markets where their traditional business model will work. They will have to complexify the model a bit to continue growing once they've digested AirTran.

So I'd say, yes, they have issues to deal with, particularly if they want to grow, but those are not issues that will prevent them from being a solidly profitable business for a very long time to come.
 
airliner371
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 8:54 pm

Quoting seabosdca (Reply 13):
But they don't have the pricing power they used to

Southwest still has the same pricing power it has always had. Nearly every fare hike needs WN to go along with it for it to go through. Otherwise it generally doesn't go through. So pricing power is certainly not an issue.
 
Cross757
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 9:01 pm

Quoting AWACSooner (Reply 11):
Who is this Herb Keller you speak of?

Oh give it a rest dude...you know exactly who he was referring to.

Quoting seabosdca (Reply 13):
So I'd say, yes, they have issues to deal with, particularly if they want to grow, but those are not issues that will prevent them from being a solidly profitable business for a very long time to come.

  
 
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seabosdca
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 9:05 pm

Quoting airliner371 (Reply 14):
Southwest still has the same pricing power it has always had. Nearly every fare hike needs WN to go along with it for it to go through. Otherwise it generally doesn't go through. So pricing power is certainly not an issue.

By that standard every medium to large airline in the US has pricing power.

WN used to have such a cost advantage that it could price at levels that would be unprofitable for legacy airlines. No longer. Now it and the legacies need about the same fare levels to make a route work.
 
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aloha73g
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 9:42 pm

Quoting QANTAS747-438 (Reply 4):

If it were profitable, WN would do it. WN has said that there will be no limit on the number of Rapid Rewards seats on a plane. Can you imagine the bath WN would take if it flew its Hawaii routes with 100% LF of FREE seats?

Frequent Flyer Redemption seats aren't "free." When you earn your Raid Reward Points, Southwest Airlines Inc. has to place a liability on their balance sheet for each point they give out. When you redeem the point they transfer the liability to asset side of the balance sheet and recognize it as revenue.

While the seat might be "free" to you...there is revenue for Southwest's accounting department to recognize.

-Aloha!
Aloha Airlines - The Spirit Moves Us. Gone but NEVER Forgotten. Aloha, A Hui Hou!
 
wnflyguy
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RE: Is WN Financially Having Issues Long Term

Wed Apr 30, 2014 9:56 pm

WN is not going anywhere.
Cash and financial stability is strong.
Even if GK vision fails for WN it could just follow every other airline bankruptcy bath and cut mountains of debt and cost. Only to come out even more lean and mean than before.
Another 41 yrs from now WN will still be kicking ass.
With or without the current leadership I predict.
I will be the first to admit I question GK vision sometimes but only for investment reasons.
WN has a powerhouse corporate team structure since Herbs days now under GK ready to keep this maverick going.
For those that think WN scewed up this FL merger. Think again there keeping what makes money and ditching what doesn't like the 717.
Flyguy
my post are my opinion only and not those of southwest airlines and or airtran airlines.
 
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NWAROOSTER
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 2:37 am

Quoting wnflyguy (Reply 18):
For those that think WN scewed up this FL merger. Think again there keeping what makes money and ditching what doesn't like the 717.

There is only ONE legacy airline merger that has really worked like it was planed. The marriage of Delta Air Lines and Northwest Airlines, which was years in the planning and has been very successful. The NEW Delta is a well oiled machine. Delta is laughing their way to the bank with Southwest's 717s.   
Procrastination Is The Theft Of Time.......
 
airliner371
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 2:45 am

Quoting NWAROOSTER (Reply 1):
Southwest "paid" Delta to take the 717s off their hands.
Quoting NWAROOSTER (Reply 19):

Southwest has said multiple times, they are breaking even with the whole conversion to DL and adding 737s. So, they might not be making money on the 717s, but they are also not loosing money.

[Edited 2014-04-30 19:45:22]
 
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DocLightning
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 4:05 am

Quoting QANTAS747-438 (Reply 4):
If it were profitable, WN would do it. WN has said that there will be no limit on the number of Rapid Rewards seats on a plane. Can you imagine the bath WN would take if it flew its Hawaii routes with 100% LF of FREE seats?

But on other airlines, there are award tickets to Hawaii. WN isn't going to fill a plane with award tickets (at least not very often), not because they'll block it but because there aren't enough people with those kinds of RR points to fill a plane or six every day.

Quoting airliner371 (Reply 12):
What is the Southwest of Today isn't bad by any means in terms of employee treatment etc... so the best part of the original Southwest is still there.

That's a good point. The WN of today still enjoys friendly labor relations. They are one of the only major airlines to do that. They have also grown a culture of happy, cheerful employees. Honestly, WN does a lot of things differently. You won't find their tickets on most OTAs, for example. Their fares do run higher than the majors these days. Why? Because WN has now become essentially a full-service carrier and in doing so has actually become one of the few full-service carriers in the US. They still offer a very similar onboard product to the one they always have, but they've added some BOB items. Bags fly free. Not only that, but flying WN is often fun. Yeah, there's the "cattle call," but there are funny safety announcements, friendly, genuinely happy employees (who will bend over backwards to help you out if there's a problem, which is *huge*), a general attitude of "do right by the customer," and professional, safe and efficient service. A lot of people will pay a premium to fly WN because it's (ironically) so much more civilized than flying mainline.

Quoting seabosdca (Reply 13):
And they bit off a bit more than they could comfortably chew with AirTran. Their resources have been directed over the last couple of years to integrating AirTran rather than to growing the network. Growth is also problematic for other reasons -- they are running out of markets where their traditional business model will work. They will have to complexify the model a bit to continue growing once they've digested AirTran.

Part of the LCC business model is to expand as rapidly as possible. This keeps a larger portion of the workforce more junior and holds labor costs down. The trouble, as you point out, is that at some point you will run out of room for growth, at least without a significant change to your business model. WN is approaching one of those turning points, but WN has reached other such transitions before. They will alter themselves to adjust...or they'll go bankrupt. I predict that Mr. Kelly is on his game here.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
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Flighty
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 4:37 am

Quoting NWAROOSTER (Reply 1):
In my opinion, Southwest did not make a smart business decision when they acquired AirTran.

Not only that but it was flagrantly illegal. It hurt customers. Prices went up (as they were certainly going to do) which made the deal illegal. They just has good lawyers and got it through.
 
slcdeltarumd11
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 5:05 am

Seriously?

I keep reading this not understanding how southwest is in trouble? Have you seen how much money they are making? Record profits and they are gonna kill it this summer. Southwest constantly is doing great in customer satisfaction and actual product. southwest is far from being in trouble
 
AWACSooner
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 8:00 am

Quoting Cross757 (Reply 15):
Oh give it a rest dude...you know exactly who he was referring to.

Whatever, looser.

Quoting Flighty (Reply 22):
Not only that but it was flagrantly illegal.

Pray, do tell, how? Because I'm pretty sure it would have caught the attention of the DOJ or FTC or FAA or someone had it been that flagrant...or even illegal.
 
PSU.DTW.SCE
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 12:03 pm

WN is NOT having any financial issues.

They have matured as an airline and have moved into a different phase of their lifecycle. The industry continues to evolve too. Like every good business they must adapt and change to the marketplace and internal/external factors.
 
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lightsaber
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 1:07 pm

Quoting NWAROOSTER (Reply 1):
Southwest may find themselves in deeper trouble if a couple more low cost airlines appear on the seen and start cutting into their operation.

NK is filling much of what used to be the WN LCC niche.

Quoting PSU.DTW.SCE (Reply 25):

WN is NOT having any financial issues.

Agreed. But their profit margins are low. That long term will be an issue (lack of cash to expand, buy new aircraft, handle a downturn). They have time, but they need to reorganize.

Quoting Flighty (Reply 22):
Not only that but it was flagrantly illegal.

Huh? FL approached WN to be bought out. There is zero illegal about that. Since WN wasn't in ATL and DL is the major player... nothing for the DOJ to worry about. Provide links if you want to keep discussing.

Quoting Flighty (Reply 22):
Prices went up (as they were certainly going to do) which made the deal illegal.

That isn't illegal. Certainly not with today's fuel prices. If there was a monopoly... then it would be illegal. Are you somehow saying DL cannot compete in ATL? What you imply would have taken cooperation of DL at ATL and there is no evidence of that.

Quoting NWAROOSTER (Reply 1):
Southwest "paid" Delta to take the 717s off their hands.

Whomever negotiated that deal on the behalf of DL deserved their bonus.

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
AWACSooner
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 1:17 pm

Quoting lightsaber (Reply 26):
NK is filling much of what used to be the WN LCC niche.

Not entirely...they're more like strip mining...taking the easy grabbings off the top, then moving on to something else...look at how long they sustain some of their routes after "building up" their new cities...LAS, SAN, OAK, SEA, PDX, ORD, DTW...all used to have way more flights than they do now.
 
DCA-ROCguy
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 2:14 pm

WN's management certainly seems to think they have a long-term financial problem with their costs. A couple of articles in the Wall Street Journal last month indicated that they have to reduce costs, notably bringing Herb out of retirement to help persuade unions to concessionary contracts. That struck me as a significant point.

WN has great employees and solid management. If they want to get their costs down, they will, and they can get back to growing and increasing market share by *lower fares.* As Seabosdca noted, they bit off more than they could comfortably chew by acquiring AirTran--interestingly, I would say, because of issues on the *WN* side--notably the more-out-of-date-than-thought reservations system.

Once AirTran, DCA, and LGA are digested, and they complete the redirection of FL ATL hub traffic to BWI and MDW, I suspect we'll get a clearer idea of what WN will do about its costs.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
milesrich
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 5:35 pm

When oil prices shot up the last time, all the airlines except WN were unprepared. WN had purchased fuel options as hedges at lower prices, and the "street" hailed their success, but if you looked closely at the numbers, they made more on the fuel hedges than their bottom line showed, i.e., their operation as an airline lost money but the fuel hedges made them profitable.

And why did anyone think their acquisition of AirTran would turn out any different than their acquisition of Morris Air?
 
Cross757
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 5:55 pm

Quoting AWACSooner (Reply 24):
Whatever, looser.

Hmmm...

"loose"
adjective, loos·er, loos·est.
1. free or released from fastening or attachment: a loose end.
2. free from anything that binds or restrains; unfettered: loose cats prowling around in alleyways at night.
3. uncombined, as a chemical element.
4. not bound together: to wear one's hair loose.

I believe you meant, "Loser"...get it right.

Quoting DocLightning (Reply 21):
Because WN has now become essentially a full-service carrier and in doing so has actually become one of the few full-service carriers in the US. They still offer a very similar onboard product to the one they always have, but they've added some BOB items.

And perhaps a major draw is that they offer mainline flights exclusively, whereas more and more domestic flying these days by the legacy airlines is performed by affiliates flying regional jets, at least spoke-to-hub operations. For example ABQ-DEN used to be all mainline on the legacies (UA would run 737, A319/A320, and 757 on the route at one time), now it's almost all RJ's.
 
AWACSooner
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 7:54 pm

Quoting Cross757 (Reply 30):

I believe you meant, "Loser"...get it right.

My lord you are shallow...that's twice you missed the sarcasm bus!
 
KBJCpilot
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 8:14 pm

I'm one of those typical WN passengers who has been loyal due to the fares and experience. But recently I've been traveling more often due to work and I have the choice to decide on which carrier to fly, the caveat being that I have to pay the difference in fares if they are more than 10%. And not once in the past 12 months have I flown WN although on some of the routes they are the lowest fare carrier.

I prefer to fly UA or F9 out of DEN. Flights to LAX, SNA, PDX, and MSY have all cost more on UA and F9 but I prefer the (a) better flight times, (b) Channel 9, (c) Direct TV, or (d) not being routed through 1-2 different cities just to fly the lowest fare.

My most recent flight was a DEN-SNA-DEN over-nighter where UA was $125 higher than WN on a direct flight each way. WN left within an hour of UA but I had to go through LAS and then on to DEN on the final flight of the day. For $125 I'll take the direct and avoid the hassle.

I also had a DEN-MSY-DEN that the rest of my team took with WN and I paid the difference and flew F9. They went DEN-BNA-MSY while mine was direct. I arrived 3 hours ahead of them on the way out and 2 hours on the way back. For me it was money well spent. I also wasn't stuck sitting next to Guido from Philly or the mom with 2 crying kids.

I've taken 50+ R/T on WN but have yet to use them in the past year. Although the funny jokes and free can of Coke are nice it doesn't make up for the convenience of flying direct with the schedule I need. And I don't have to deal with the redneck convention that seems to permeate WN on some of their segments.

Go ahead and bash UA and F9 all you want but I'll pay the difference to stick with them over "Cattle Call Airlines" any chance I get. Getting an assigned seat, knowing that I'll not have to visit BFE or some other stopover just to save $20, and not having to check in 23:59 in advance to have a shot at one of the first 75 seats on a cramped 737 is worth it for me.
Samsonite, I was way off!
 
Cross757
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 8:14 pm

Quoting AWACSooner (Reply 11):
Yah, the future is gonna catch up with a lot of airlines...and a lot of them will fail before WN even posts a losing year.

Any facts to support this? Or just more of the usual spewing of WN cool-aid?!
 
Cross757
Posts: 233
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RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 8:54 pm

Quoting AWACSooner (Reply 31):
My lord you are shallow...that's twice you missed the sarcasm bus!

You know what, you are right. Things have become a little tense on this thread. There is no need for name calling or sarcastic responses. I apologize. How about I tell a joke to lighten the mood?

Question: How does an airplane pilot tell the difference between his navigator and the jet engines? Answer: the jet engines actually stop whining between flights.

For the record, no, I don't think WN is going anywhere anytime soon. But each company, eventually, will have its low point. Most get through it and become stronger, some do not. It's business. I wonder how many people back in the day thought Pan Am or Eastern were invincible. WN is blessed with good leadership and great employees.
 
freakyrat
Posts: 1959
Joined: Fri Aug 22, 2008 1:04 pm

RE: Is WN Financially Having Issues Long Term

Thu May 01, 2014 10:41 pm

Quoting NWAROOSTER Reply 19.

"There is only ONE legacy airline merger that has really worked like it was planed. The marriage of Delta Air Lines and Northwest Airlines, which was years in the planning and has been very successful. The NEW Delta is a well oiled machine. Delta is laughing their way to the bank with Southwest's 717s."

Yes and I'll bet those same B717's will be back at BMI flying to ATL like they did for AirTran. SBN will also most likely get them for the Notre Dame Football season. Once more of them arrive at Delta I wouldn't be surprised if my former home town airport SBN gets them on a daily basis on the ATL flights. The ground support equipment for the aircraft is already in SBN with DGS. SBN nearly snagged AirTran and their B717's just before the merger. One thing that will make this work for Delta at SBN is the demand for First Class seating which RJ's don't cut it.

Back to WN though, They are on firm financial ground.
 
TW870
Posts: 1215
Joined: Fri Jan 25, 2013 2:01 am

RE: Is WN Financially Having Issues Long Term

Fri May 02, 2014 1:11 am

Although WN's immense 1980s-era cost advantage is disappearing, I think the current market conditions place WN on extremely solid ground. Most importantly, the 3 legacies have been so disciplined with capacity over the last years that the pricing environment has become much more advantageous for all airlines. For an anecdotal example, I just cancelled two work trips in June and July on the DAY-MSP market because the cheapest mid-week non-stop fare I could find was $1,100 r/t. WN has a big, efficient network, and can undercut those type of high fares while still making money. Sure, if the bottom falls out of the economy again, their rising costs will be a constraint. But right now the news is only good.
 
aajfksjubklyn
Posts: 458
Joined: Wed Jul 25, 2007 10:46 pm

RE: Is WN Financially Having Issues Long Term

Fri May 02, 2014 1:25 am

Southwest had a very rigid business model based on ten principals which they stuck to for too long. 2 of those were based on not changing their model and sticking to customers only and not carrying mail etc.... They are now feeling the effects of not evolving. It's called a SMAC strategy. It's very much used today as an example in business forums. Google it. It is a very interesting read.
 
olddominion727
Topic Author
Posts: 465
Joined: Mon Jan 02, 2012 8:16 pm

RE: Is WN Financially Having Issues Long Term

Sat May 03, 2014 12:08 am

I am trying to understand the new WN logic... they used to be the least expensive carrier bar none. The other carriers used to fight to keep them out of certain airports. Now it seems WN is the highest. from the way that some of you have flamed me, I guess I am the idiot when I see my pocket book and see the cost of travel year-over-year... the first quart of this year was the highest I have ever spent on air travel like many other travelers. HOWEVER, now that I am moving away from WN my travel expenses seem to be coming down. That's what I am basing my questions on, as well as talking with other colleagues and pax that I see on the same flight and routings.

I also never said they shouldn't be making a profit. Those words never left my fingers. I actually like their seating when I pay the $12.50 to board first, and they still usually have the nicest employees.

I have also heard that have been having internal battles in areas that has not had them in the past. When they took over MuseAir, TransStar and MorrisAir, they didn't raise their fares. So I was just trying see what others thought!
 
User avatar
seabosdca
Posts: 6602
Joined: Sat Sep 01, 2007 8:33 am

RE: Is WN Financially Having Issues Long Term

Sat May 03, 2014 1:11 am

Quoting olddominion727 (Reply 38):
I am trying to understand the new WN logic... they used to be the least expensive carrier bar none. The other carriers used to fight to keep them out of certain airports. Now it seems WN is the highest.

Their prices have risen for several reasons. They no longer enjoy the fuel price advantage they used to. Their employee base has become fairly senior and is paid more. They have kept airplane size almost constant while the competition has either decreased it using cheaper-to-fly planes or increased it using no-more-expensive-to-fly planes. They have grown into more expensive airports. And the legacies have reduced their costs through bankruptcy, to the point where now WN and the legacies have a similar cost base. But WN has also grown into higher-yielding markets, so it has developed the revenue stream to make a profit in spite of its higher costs. Really, it's transitioned away from the LCC business model into a slightly streamlined legacy business model.

If you want the pure LCC business model and the prices it brings in the US, you now have to fly Spirit or the new Frontier.

[Edited 2014-05-02 18:12:16]
 
XT6Wagon
Posts: 2728
Joined: Tue Feb 13, 2007 4:06 pm

RE: Is WN Financially Having Issues Long Term

Sat May 03, 2014 1:46 am

Quoting Flighty (Reply 22):
Not only that but it was flagrantly illegal.

Um, It was the merger with the LEAST competition between the two airlines. There was only a couple airports both served much less routes in common. AirTran's sole hub WN didn't even serve with a single flight.
 
strfyr51
Posts: 4902
Joined: Tue Apr 10, 2012 5:04 pm

RE: Is WN Financially Having Issues Long Term

Sun May 04, 2014 9:10 am

Quoting par13del (Reply 8):

their walkup fare from SFO- MDW was $496 3 weeks ago, VX's Fare SFO -ORD was $466. . I bought my Nephew a full fare ticket.
 
milesrich
Posts: 1508
Joined: Sun Jul 06, 2003 2:46 am

RE: Is WN Financially Having Issues Long Term

Mon May 05, 2014 11:49 am

Quoting airliner371 (Reply 20):
Southwest has said multiple times, they are breaking even with the whole conversion to DL and adding 737s. So, they might not be making money on the 717s, but they are also not loosing money.
Quoting Flighty (Reply 22):
Quoting NWAROOSTER (Reply 1):
In my opinion, Southwest did not make a smart business decision when they acquired AirTran.

Not only that but it was flagrantly illegal. It hurt customers. Prices went up (as they were certainly going to do) which made the deal illegal. They just has good lawyers and got it through.

Boeing made it easy for WN to dump the 717s for 737s and Delta got a good deal on some fuel efficient aircraft that work well for them.

Fragrantly illegal? How? No competition was eliminated. Southwest and AirTran did not compete on any flight segments that I know of. AirTran was an LCC that had an Atlanta hub, which Southwest CHOSE to close. The merger had nothing to do with it. I love it when non lawyers make these broad legal statements, and this one was particularly amusing because of the use of the adjective, flagrantly.

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