Branson wants to try and sway Dallas for DAL gates

[700UW]

Dont forget they also closed their MCO hub.

 

[eolesen]

Look at ORD/MDW. In most cases, AA and UA have far more service to most cities than WN has from MDW. Yet in a city like MCO, WN carries the most local Chicago passengers even though MDW is far from the larger wealth centers of Chicago.

I suspect WN dominates MDW-MCO because the wealthy don't have the same desire to worship The Mouse as middle class families do....
 

not unlike the approach that Kroger or Safeway or Walgreens or any multisite national retailer has.

Did you miss the recent saga over Safeway having to sell itself over continuing losses? They already pulled out of Chicago entirely, and the sale to Cerberus will likely see even more store closings where they are too close to an Albertsons...

How about the announcement that WAG is taking a $280M charge-off for closing 76 stores this year, and closed down 20 stores last year for the same reason of being too close together for profitability?

By comparison, you won't see Costco or Walmart trying to be too close together. Which of those retailers mentioned are more profitable?

 

Remember that AA kept up the charade for nine months after Legend's shut-down, ending the DAL F-100 56-seaters only after September 11, 2001.

I'm not sure it was a charade. Strong egos in play at the time, between Mike Gunn and Don Carty. Neither of them were exactly known for being rational when it came to DAL, and neither was Dan Garton.

Also, AA had MD80's in there for a while flying DAL-AUS, and put Eagle in there for a while as well.

 

[WorldTraveler]

it is likely precisely because of the history of Legend that the DOJ felt there was at least some validity to WN's request (which I am sure they made) to provide some sort of protection to WN as they developed DAL as a national hub in light of the clear dominance of certain N. Texas markets which AA had.

AA's former mgmt. might have gone crazy at DAL but the opposite reaction today of saying DAL doesn't matter and we'll be fine if we don't defend ourselves will ultimately be shown to be unwise.

WN doesn't just dominate MDW to MCO they are the dominant carrier in CHICAGO (both airports) to Orlando. For whatever reason, it does show that there is a market which AA stands to give up. You can justify the loss however you want but AA serves many of those same customers. Revenue lost is lost regardless of the reason the person was traveling.

The grocery and drugstore example fits quite well with the discussion. Tell me who the dominant grocers were in Chicagoland? I'm certain Safeway wasn't high on the list and that is precisely why they couldn't compete. Costco is a niche retailer and they don't try to serve the whole market. Many retailers have overbuilt and had to pull back. but there are two airports in the Dallas area. The choice is serve only one or serve both. The size a carrier is in the combined market matters. The more presence in the combined market to the cities that you want to serve is critical. WN dominates short haul service from its Texas hubs because that is what it is most heavily focused on. But the longhaul domestic market as well as the shorthaul int'l market are both large markets which WN will develop and will do well at.

I fully expect that WN will try as hard as it can to push the limits of what it can do in Dallas thru any means they can. That is what WN has done for years and most of the time it has worked. I am skeptical they will have much success adding more gates but they might be able to erode limitations on remote gates or schedule so heavily that they can use the clause of using remote bussing only in IROPS for the inevitable times when a gate won't be available when everything doesn't work like clockwork.

Since Wright is falling in Oct, a traditionally slow time, WN has time to develop most of the markets over a period of months -but that also means that discounts to fill new flights will likely be aggressive during the winter. By summer 2015, WN will have a very good idea of how the DAL market works and will likely be making significant adjustments to add capacity where they can, create connections to support flights which don't generate the volume of traffic they expected but do have strong yields, and add or subtract markets based on demand which they see.

The opening of DAL to longhaul domestic traffic will be one of the biggest stories in US commercial aviation in this half of the decade. History will show that WN waited to get in for a very good reason.

 

[eolesen]

Tell me who the dominant grocers were in Chicagoland? I'm certain Safeway wasn't high on the list and that is precisely why they couldn't compete.

You're certain?... There were two dominant local brands in Chicago thru the 1990's: Jewel/Osco (bought out by Albertsons about 15 years ago), and Dominicks (owned by Safeway.

Walmart and Meijer superstores started to move in during the 2000's, and took over the dominant positions for two reasons.

The obvious reason was scale. Meijer and Walmart had greater buying power. Jewel and Dominick's were also unionized, and Illinois isn't RTW.

The second reason is less obvious to outsiders. Groceries aren't taxed, but just about everything else sold with a good markup is taxable. State sales tax is only 6.5% but local sales tax can jack it up to 11.5%. Jewel and Dominick's were stuck with a lot of locations where the sales tax had climbed up to the max of 11.5%, while Walmart and Meijer chose to build where taxes were lower. When shopping for a family of five, I have no no problem driving two towns away and across the county line to save that 4%...

End result is that Safeway decided that it wasn't worth losing money in Chicago, and closed down Dominicks entirely during 2013. They didn't even try to sell it. A few independent grocery stores have taken over some of the vacated space, but they're going to face the same tax issues.

The opening of DAL to longhaul domestic traffic will be one of the biggest stories in US commercial aviation in this half of the decade. History will show that WN waited to get in for a very good reason.

Yeah, well electing the first black President was one of the biggest stories in the last two centuries, and that hasn't exactly worked out so well...

My overall opinion is that the hoopla over DAL is overblown. I wouldn't be at all surprised if there was empty gate space there by the time AA's self-imposed exile is over.

 

[WorldTraveler]

I'm not interested in getting into politics but the whole grocery issue does reinforce that scale matters. Not having lived in Chicago for a number of years, I wasn't aware of the details that E brought and they are helpful.
His point about retailers working around a changed environment (tax structure) is particularly relevant.

Obviously the only way to know how successful WN will be at DAL is to watch it play out.

I, and you, swamt, believe there is enormous potential at that airport. I recognize the advantages that AA has at DFW but I also know that choice alone- another carrier who will get its share of the market even from another airport which is more geographically favorable to more of the Metroplex than HOU or MDW is to their cities - will cause some customers to move.

As noted, WN has more growth opportunities than they can fully develop which does leave opportunity for other carriers but also means that WN will have no problem finding uses for its fleet for the near future.

Where is WN's new schedule?

last time I checked, DL's DAL flights are all still for sale.

 

[eolesen]

Again, for the hard of reading, WN's schedule is released on Monday.

http://www.southwest.com/html/travel-tools/index.html

On Monday, they'll likely post the projected date for their winter schedule, presumably mid-October.

 

[WorldTraveler]

it's not a question of hard of anything other than memorizing someone else's schedule is not high on my list of priorities even if it was mentioned before... but thanks for the reminder.

Given that access to the two gates is resolved, the expectation is that WN will be aggressive in maximizing the assets it does have.

 

[SharoninSAT]

.
On Monday May 19th we will open the schedule and announce 
the fares from Nov. 1st thru Jan. 4th...

 

[eolesen]

memorizing someone else's schedule is not high on my list of priorities even if it was mentioned before...

Why is it you can memorize every line of DL's GAAP reconciliation and balance sheet, yet can't keep track of a date relevant to a line of discussion you've specifically brought up at least four or five times in the past three months?

 

[WorldTraveler]

I don't memorize any financial statements. I can look it up as needed.

To be honest with you, other than the current DAL issue, I do not pay attention to when WN loads its schedules.

The only reason it is of interest is precisely because a lot of us - WN employees included - want to know what WN's DAL schedule will look like.

I am sure you don't see it the same way some of us do, but WN's schedule load marks the countdown to a whole new era in N. Texas aviation that has been far too long in the making. I am sure that the festivities that swamt has talked about and the media hype from WN will reach a fever pitch in the next few months.

WN's schedule will signal how they intend to use their relatively few gates and, since fares will come with those schedules, it will also indicate how aggressively WN is willing to go to establish itself.


of course the other part is how the DCA and LGA slots will be used and I presume we will hear about that as well.

Within hours we will know AA's response.

Monday will be a big day.

 

[swamt]

I did a fare search the other day on Virgins routes from DAL.  Branson and Cush said there would be $79 one way fares to all cities that they would serve from LF if they were to get those gates.  I couldn't find one single $79 fare.  The next cheapest, with several months in advance, was found to be $179 and of course up from there.  I will say it was nice to see options for bus class, as well as first class from LF.  And BTW, I am sure if Virgin charges for bags or how they do charge.   Then I searched SWA's same flights and we were $149.  Until you get into the B.C. and F.C. the only diff is VA has TV's built into seat backs and SWA you watch on your own device.   This was done about a week ago or so.  Pretty sure the fare wars will start Mon when SWA releases it's schedule.  Some are expecting low introductory prices, just curious to VA's responce as well as Delta's...

 

[eolesen]

I'm not sure what you're expecting for a response from AA aside perhaps from some fare adjustments. The patterns of service to all the cities in the October and November launches are pretty well covered already.

WN is already running ads, and has been...

I can't say that "MOAN" is what I would have picked as a tagline, but maybe someone from Spirit's marketing department came over to WN...

 

[WorldTraveler]

swamt
Virgin's $79 fares were a one day promotion on the day they loaded their schedules.

thanks for the ad, E. Highlights how strongly DAL will be connected to WN's largest cities.

 

[Glenn Quagmire]

To be honest with you

Well now you finally tell us.

Anyone who feels the need to make that statement makes me think twice about anything else said without that qualifier.

 

[WorldTraveler]

And if you were honest with yourself and the rest of the world, you would have to admit that you really have nothing of substance to contribute to any subject of any substance - so your only option is potshots like that.

Can you let me know who to send a thank you note to for AMFA's strike?

Tell us, Einstein, how many flights will WN operate in any of the markets?

(it is at least partially public information now)