Cows Will Fly

[FlyUs]

No doom and gloom Fishy. As I clearly indicated, it was just my OPINION.

As for SWA, remember an airport called BWI??? They basically chased USAir out of there. Same with ISP. Now SWA is attacking US in Pennsylvania.

I personally don't think this a huge threat to UA. Don't know about F9, but probably more of a direct competition for you guys.

Good luck,
767jetz

Not completely true. US, with major operations in DCA & PHL, was losing interest in their BWI hub prior to the arrival of SWA.

 

[corl737]

Not completely true. US, with major operations in DCA & PHL, was losing interest in their BWI hub prior to the arrival of SWA.

The way that was phrased gave me a chuckle. Thanks!

Losing interest ... I think I've had a few relationships where that happened!

 

[mneagle]

Yes! Another city gets to experience Southwest! BTW, is there any indication that SWA's coming to MSP?

 

[NewHampshire Black Bears]

Wow,

This post will DEFINITELY get reaction !!

But I only know one way to call it. AS I see it !!

WN coming into DEN is VERY BIG !!
Very bad news for F9, VERY BAD !!

Not good news for UA, meaning that unless TED can afford to start giving away food, and start (almost)
matching WN on DEN fares, "for as long as it takes", we "may" see TED go bye bye, and return to mainline
UA flying DEN n/s to their strenght destinations.(DEN/IAD...DEN/ORD) etc.

I base this partially on the fact that, before the LCC's came along, that the legacy's could get away with running "3" hubs. (Heck, UA is running 4)(ORD/IAD/SFO/DEN)

This "may" be the begining of the end of the weakest hubs, for the legacy's.
(CLE-CO/MEM/IND-NW/CVG-DL... just to name a few .

Thoughts ????????

NH/BB's
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Yes! Another city gets to experience Southwest! BTW, is there any indication that SWA's coming to MSP?
[/quote.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Personally, I hope NOT !!!!!!!!!!!!!!!!!!!!!!

But the way "DOUG" is acting lately, I'm afraid to speculate.

One thing is for sure, WN will be watching that scenario like a hawk !!

NH/BB's

 

[Fly]

Go compare some UA vs LUV fares. It's amazing that half the time UA is cheaper. I don't see any reason to drop the TED marketing campaign because what does it cost them? Probably nothing at this point. May as well squeeze the extra bodies in.

 

[mrfish3726]

FWAA says "Frontier's stock is currently off more than 26% so far today on this news. MrFish must be really happy. "

I waited till it got to $7.61 FWAA and bought me 1000 shares when I got home from work . It will go back up to $14+ after all the hoopla is done. It's amazing that everyone is spelling doom and gloom for Frontier, when in reality we have competed with SWA on over 70 to 80% of our routes for years. I'll wait to hear their marketing campaign before I worry about F9's future in DEN. SWA is in for a reality check after the fuel hedges are done in 2006. Then we'll see how much of a profit they will take in when the fuel bill goes up by 600+ million a year. SWA is just another airline like all the others. Haven't you ever watch AIRLINE before ?????

 

[KCFlyer]

Go compare some UA vs LUV fares. It's amazing that half the time UA is cheaper. I don't see any reason to drop the TED marketing campaign because what does it cost them? Probably nothing at this point. May as well squeeze the extra bodies in.

Excellent observation Fly. Now for the next questions...which of the two is in bankruptcy...and why? Maybe it's because Southwest isn't always cheapest. It's called "managing revenue". What good are extra bodies on a plane if the fares don't cover the costs to fly them?

 

[Fly]

I'll agree with you there KC but that isn't what the poster said. They just said the LUV is cheaper (and it's not often)

 

[KCFlyer]

I'll agree with you there KC but that isn't what the poster said. They just said the LUV is cheaper (and it's not often)

So why does the strategy, especially of bankrupt carriers, of pricing below Southwest seem to be so popular? Seems to me, it's a quest for butts in seats (market share) instead of profits. After all, if a "low cost" carrier can turn a profit...even without fuel hedging factored in, how in the world does a "financially troubled" carrier turn a profit by charging less?

 

[Fly]

You're asking ME??? LOL I'm a flight attendant.

I remember hearing that when an airline increases their seat price, and the other carriers don't follow, the airline loses MILLIONS that week in lost revenue. Until an airline can sustain that type of loss, I imagine we'll keep seeing lowballing.

 

[luver41]

WN has been slowly raising fares this year and I think next year they'll bump their 299 cap up to either 349 or 399.

I have a hard time seeing Southwest with those type of increases for unrestricted fares. If they raise those fares at all, I'd guess $329 to be more likely. Personally, I think $399 is completely out of the question. My guess is they'd be more likely to raise discounted fares from five to ten dollars instead.

 

[WorldTraveler]

WN gets better revenue than many legacy carriers on the routes they compete with them because WN has an ability to both stimulate a market with low, attractive fares and then siphon off the highest revenue markets. The excess capacity that many legacies have is why they have no choice but to offer more seats at the lower prices - why Fly sees UA having lower selling fares than WN.

DEN fares are high. Frontier has not offered fares similar to what other LCCs such as WN, B6, and FL have offered. WN came in because DEN capacity is shrinking and because there is a big difference between the current lowest fares and what WN typically offers.

And with all due respect, UA does not face the level of directly competition in SFO, DEN, or ORD that it has faced in IAD or LAX.

While UA may want everyone to believe that this will not affect their ability to emerge from BK, there is no doubt that one of the reasons WN is going into DEN is to make UA's emergence more difficult. UA's creditors are undoubtedly asking for documentation as to how WN will affect UA's business plan.

WN is obviously trying to grow its revenue base and also wants to build a case against the Wright Amendment. I expect that they learned in PHL how to operate in an operationally deficient hub that is dominated by a legacy carrier and they will quickly and aggressively expand DEN to ensure their success. DEN won't be a 10 flight a day to 4 cities operation for long.

 

[FWAAA]

SWA is in for a reality check after the fuel hedges are done in 2006. Then we'll see how much of a profit they will take in when the fuel bill goes up by 600+ million a year. SWA is just another airline like all the others. Haven't you ever watch AIRLINE before ?????

Good for you on the stock gains. Up 10% so far today.

The bolded portion of your post (above) is simply false. Apparently you don't know very much about WN's fuel hedging program. I take it you don't read their financials or even their press releases. Read this real news and weep:

We are more than 70 percent hedged for 2006 with average crude prices capped in the $36 per barrel range and also have hedged the refinery margins on the majority of our 2006 positions. We are over 55 percent hedged in 2007 at approximately $37 per barrel; about 35 percent in 2008 at approximately $37 per barrel; and about 30 percent in 2009 at approximately $39 per barrel. In short, we are well-prepared for rising energy costs. Our People are taking aggressive actions to prepare for rising energy costs and sustain our profitability and financial health.

http://biz.yahoo.com/prnews/051020/dath011.html?.v=33

Just the facts, MrFish. Not garbage like the bolded portion of your quote.

Sure, MrFish, WN's fuel costs will eventually rise. But by time WN is paying market prices for gas, F9 and a few other airlines will have probably liquidated.

Like the old joke goes - WN doesn't have to outrun the bear; it simply has to outrun its competitors. And it's doing a helluva job at outrunning its competitors.

 

[whlinder]

I have a hard time seeing Southwest with those type of increases for unrestricted fares. If they raise those fares at all, I'd guess $329 to be more likely. Personally, I think $399 is completely out of the question. My guess is they'd be more likely to raise discounted fares from five to ten dollars instead.

A couple of years ago the cap was $399, but then it was lowered. I can see $329 as perhaps the next level though. Either way, I expect their fares to keep creeping upward, and expect the cap to be raised next year.

 

[FWAAA]

A couple of years ago the cap was $399, but then it was lowered. I can see $329 as perhaps the next level though. Either way, I expect their fares to keep creeping upward, and expect the cap to be raised next year.

Correct. WN lowered the cap just over 3 years ago from $399 to $299, a drop of 25% on walkup fares. Profitable before that and profitable ever since.

http://www.bizjournals.com/sacramento/stor...19/daily30.html

I can see the new cap going to $349 in the next few months. That's a reasonable 15% bump upward.