I have to agree with some here that the entry of Southwest will, at least initially, not be the catastrophe for US Airways being predicted by some. Take a look at the initial set of destinations: PHX, LAS, MCO, TPA, MDW, and PVD. Of those six, five (all except PVD) already have low-fare competition from ATA, AirTran, or America West. Moreover, BOS (for which PVD acts as a proxy in WN's system) also has low-fare competition offered by FL. Yields have already come down quite a bit in most of these markets (save PVD); PHL-Florida markets are priced essentially the same as BWI-Florida now.
That said, it's clear (from the fact that they took four gates) that WN intends to expand further at PHL, and that expansion (into markets like LAX, OAK/SJC for SFO area, SEA, SAN, HOU, RDU, BNA, FLL, MHT, CLE, IND, etc.) will soon take a toll on US's higher fare markets. US Airways will be OK *if* they can get their costs in line. Read through some of the other scorecards and you can see how productivity is one of Southwest's greatest advantages. I am a bit unclear on how operating smaller jets (even with lower salaries for pilots/flight attendants/gate agents/ramp) will give you lower costs unless those salaries are less than half what US mainline pays now.
If US does get its costs in line and can manage to be profitable at WN-inflenced fare levels, then the increased competition at PHL will actually be good for both companies, given that the number of passengers will likely dramatically increase (enough to fill the seats being offered). Just look at what happened at BWI, taking into consideration that PHL serves an even larger number of people.
I don't exactly see the point in US employees boycotting WN for non-rev/pass travel. It might make you feel better (by inconveniencing yourself) but it's not like they're making a mint on pass travel. I also don't see a fare war in PHL as being a serious drag on earnings for WN (or even as causing losses). Their initial foray will represent about 1% of their total system capacity; running completely empty planes would reduce their operating margin by a couple of percent at most. They'd have to be running empty planes in an operation the size of BWI to post a quarterly loss, and I doubt they will be unable to fill planes with deeply discounted fares. Also remember that WN is the #1 or #2 carrier at every airport from which they've announced service to PHL, so while US should have the advantage with PHL-based customers, WN will likely have more loyalty among its customers at PVD, MDW, TPA, MCO, PHX, and LAS.
I'm not so sure BOS needs more Florida service. The market's getting pretty crowded what with Song and American already, not to mention jetBlue's entry in about three weeks. I'm sure US could fill planes between February and April, but the market does taper off from May through November and during January/early Feb. You can still get some excellent fares between BOS and Florida for next month since few families travel between New Year's and winter break for Mass. schoolkids. It's often cheaper these days to fly from BOS than it is to fly from PVD or MHT. Transcons from BOS would compete with AA, UA, B6, and HP -- again that's getting to be a crowded market.
As for turboprops like the Q400 -- many passengers STILL see the prop and think "old, unreliable, unsafe, noisy, Third World." While the operating costs of the prop may be lower, and while the comfort level may be comparable to or greater than that of a jet, the fact remains that operating a prop against your competitor's RJ (or 737 in the case of WN) means that many of your customers will choose the competitor's product in the future given comparable schedules and price.
That said, it's clear (from the fact that they took four gates) that WN intends to expand further at PHL, and that expansion (into markets like LAX, OAK/SJC for SFO area, SEA, SAN, HOU, RDU, BNA, FLL, MHT, CLE, IND, etc.) will soon take a toll on US's higher fare markets. US Airways will be OK *if* they can get their costs in line. Read through some of the other scorecards and you can see how productivity is one of Southwest's greatest advantages. I am a bit unclear on how operating smaller jets (even with lower salaries for pilots/flight attendants/gate agents/ramp) will give you lower costs unless those salaries are less than half what US mainline pays now.
If US does get its costs in line and can manage to be profitable at WN-inflenced fare levels, then the increased competition at PHL will actually be good for both companies, given that the number of passengers will likely dramatically increase (enough to fill the seats being offered). Just look at what happened at BWI, taking into consideration that PHL serves an even larger number of people.
I don't exactly see the point in US employees boycotting WN for non-rev/pass travel. It might make you feel better (by inconveniencing yourself) but it's not like they're making a mint on pass travel. I also don't see a fare war in PHL as being a serious drag on earnings for WN (or even as causing losses). Their initial foray will represent about 1% of their total system capacity; running completely empty planes would reduce their operating margin by a couple of percent at most. They'd have to be running empty planes in an operation the size of BWI to post a quarterly loss, and I doubt they will be unable to fill planes with deeply discounted fares. Also remember that WN is the #1 or #2 carrier at every airport from which they've announced service to PHL, so while US should have the advantage with PHL-based customers, WN will likely have more loyalty among its customers at PVD, MDW, TPA, MCO, PHX, and LAS.
I'm not so sure BOS needs more Florida service. The market's getting pretty crowded what with Song and American already, not to mention jetBlue's entry in about three weeks. I'm sure US could fill planes between February and April, but the market does taper off from May through November and during January/early Feb. You can still get some excellent fares between BOS and Florida for next month since few families travel between New Year's and winter break for Mass. schoolkids. It's often cheaper these days to fly from BOS than it is to fly from PVD or MHT. Transcons from BOS would compete with AA, UA, B6, and HP -- again that's getting to be a crowded market.
As for turboprops like the Q400 -- many passengers STILL see the prop and think "old, unreliable, unsafe, noisy, Third World." While the operating costs of the prop may be lower, and while the comfort level may be comparable to or greater than that of a jet, the fact remains that operating a prop against your competitor's RJ (or 737 in the case of WN) means that many of your customers will choose the competitor's product in the future given comparable schedules and price.
