Luv Fades

[LCC_#1]

Only in America can companies file bankruptcy, then turn around and charge LESS than a non bankrupt low fare carrier and call that a "level playing field".

Hey KC, are you a major stockholder of SWA? What the hell do you care who has or hasn't been in ch 11? As long as you can fly to the 4 corners of the USA for less than it cost to take you and your family to a Chiefs football game on a Sunday, why do you care? Geez, your attitude to everyone who works for someone who went thru ch 11 or ch 22 SUCKS!! Until you have walked in ANY employees that has sacrificed thru that process, you need to shut the hell up because you DONT know WHAT your talking about. Now start blasting! I would never begrudge SWA for being business smart or the legacies for being business stupid!! But I dont OWN any airline, don't care to, and am happy to have my job AND my senority, which would had been gone had the company gone under. :down: :rant:

 

[BoeingBoy]

Hey KC, are you a major stockholder of SWA?

Although I've never met KC, he seems to hold no ill will towards any airline or their employees. He does, however, respond in kind to those who seem to use the slightest excuse to bash his favorite airline - WN.

Jim

 

[KCFlyer]

Hey KC, are you a major stockholder of SWA? What the hell do you care who has or hasn't been in ch 11? As long as you can fly to the 4 corners of the USA for less than it cost to take you and your family to a Chiefs football game on a Sunday, why do you care? Geez, your attitude to everyone who works for someone who went thru ch 11 or ch 22 SUCKS!! Until you have walked in ANY employees that has sacrificed thru that process, you need to shut the hell up because you DONT know WHAT your talking about. Now start blasting! I would never begrudge SWA for being business smart or the legacies for being business stupid!! But I dont OWN any airline, don't care to, and am happy to have my job AND my senority, which would had been gone had the company gone under. :down: :rant:

When someone from an airline that stayed in bankruptcy for 3 years comes on a board and states with apparent PRIDE that they gave up pay, benefits and pensions and that their company not only screwed them, but also their creditors and shareholders, and they are now dancing at the bad news that Southwest's fuel hedges will expire in a few years, then yeah...I wonder what the rest of the airline industry would look like had airlines not been afforded a liberal bankruptcy court. Would Delta and Northwest have had to file? Would American be stronger than they are?

Oh yeah....I have worked for a company that went bankrupt...and liquidated. So I know what it's like. I've watched neighbors wonder if they have a job because of "mergers" and offshoring of jobs.

Furthermore - the vast VAST majority of Southwest employees that post on these boards have never been gleeful at the problems at other airlines. Hell, some of them were even saying (when things were looking bleak for US) "I hope they make it". Yet there seems to be a bunch of folks at other airlines who are just aching for the day Southwest execs ask for concessions. I guess so they can say "told you so". And - I am puzzled at the apperent pride of people whose companies, via the bankruptcy courts, really are "lowering the bar" for the rest of the industry.

 

[jbguppy]

Well perhaps you'd do well to learn the difference between fact and opinion. I posted an OPINION. Opinions don't even have to be fact based, they can be but it's not required.

Now a point or two to consider:

UA put 20 mil aside for employee profit sharing. Well US has over 48 mil set aside for the same reason and US is what 2/3rds the size of UA?

Also remind the folks just exactly how many consecutive quarters UA has been profitable in the last five years.

Another point to ponder, has SWA been profitable for more consecutive years than UA has been profitable for consecutive quarters??????? My suspicion is the answer is a resounding yes.

As to your point about SWA losing money if not for fuel hedges. Well the hare would've won the race if he didn't stop to take a crap. Both carriers had and have ample opportunity to hedge or not hedge. The better managed, more forward thinking company chose to hedge. The one in BK for 3 years did not and that IS a fact and it's Straight too.

Wow, over 8200 posts...

You said UA would not have a full operating profit, and that WN and LCC would. You were incorrect, just admit it and move on.

Whatever, get your opinions straight then.

My point all along is that Luv is not structured to be profitable without the hedge, I agree the hedge was a smart move, but even their management will tell you it's windfall over the years has been an unexpected surprise in it's magnitude.

Without that one factor, the financials of LUV look very ordinary to the much more hard working folks at the legacies, BANKRUPTCY OR NOT.

Hope you have time to read this, as you average over 7 posts a day on this board.

A hobby perhaps??

JBG

 

[swflyer]

Gary Kelly quote from Wed's Media Day:

“We don’t stand still at Southwest Airlines,â€￾ he said. from the Ft. Worth Star-Telegram, article follows

Southwest slashes fares again

By TREBOR BANSTETTER, Star-Telegram Staff Writer
Wed, Nov. 01, 2006

DALLAS - Southwest Airlines has again turned up the heat in the North Texas fare war by slashing ticket prices from Dallas Love Field to destinations nationwide as cheap as $39 each way.

The fare sale, which runs until Dec. 1, offers its cheapest tickets mostly to nearby cities like Houston and Little Rock. But distant destinations like Philadelphia and Seattle are still discounted at $79 each way.

“We weren’t kidding when we said we’d treat Dallas like a new city in our network,â€￾ Gary Kelly, the airline’s chief executive, said at a conference with analysts and reporters Tuesday. “And there’s a lot more still to come.â€￾

Like most fare sales, the number of seats available at those prices will be limited, and could sell out quickly around the holidays.

“If you’re interested, check them out soon, because they’re going to sell out fast,â€￾ Kelly said.

Still, Keith Taylor, the airline’s vice president of revenue management, said the availability of the cheapest tickets “is actually pretty broad,â€￾ and said most customers could find them, especially if they have some flexibility in their itinerary.

Although Love is Southwest’s home base, and adjacent to its corporate headquarters, the airline’s service there has long been restricted under the Wright Amendment. That law, which dates to 1979, limits service from Love to Texas and a handful of adjacent states.

In September, Congress revised the amendment to end the restrictions in eight years. It also immediately allowed Southwest to begin selling tickets from Love to distant cities as long as they stopped or connected at an airport within the Wright zone.

Since then, fares have plunged to the 25 new cities Southwest began offering, with prices starting at $99 each way, and even lower on some Internet specials. Rival American Airlines matched most of Southwest’s fares from its hub at Dallas/Fort Worth Airport.

Because it operates mainly from D/FW, American has the advantage of flying passengers nonstop to faraway cities.

American officials said Tuesday they were studying Southwest’s fare sale and considering their options.

“It would not be unusual for American or another airline to match a Southwest fare sale,â€￾ said Tim Wagner, an American spokesman.

Also included in the sale are $49 one-way tickets to St. Louis, Kansas City and New Orleans; $59 tickets to El Paso or Harlingen/South Padres Island; and $69 fares to Chicago and Louisville.

All of the 45 cities that Southwest serves from Love are included in the sale, which is for travel between Dec. 1 through March 9.

Kelly said the airline will likely expand its Love service in March, when the airline’s spring schedule is implemented. Some Southwest cities, particularly in the Northeast, don’t yet have service from Love because the connections would be too long or the flight would require more than two segments.

The airline hopes to add cities like Providence, R.I., and Islip, N.Y.

Southwest executives also said they have potential to grow at Love despite restrictions on the airport that were part of the Wright revisions. Under the deal, the airport will be capped at 20 gates, with Southwest holding 16. The airport had previously had 32 gates, with 14 of them operated by Southwest.

Currently, Kelly said, planes departing from Love each day have about 4,000 empty seats, which could be filled with passengers connecting to distant cities. Airplanes at Love fly about 65 percent full, he said, although he added that since the restrictions were loosened, that figure has already risen by a few percentage points.

And the airline could still add frequency, he said, particularly because the shorter flights from Love tend to take less time at the gate between flights.

“The potential for additional passengers, from a capacity perspective, is quite large,â€￾ he said.

Taylor said that should keep fares low among rival airlines at D/FW as well.

“We’re the low-fare policemen,â€￾ he said.

The local fare war comes amid a general increase in fares on airlines nationwide, including Southwest. The Dallas airline has raised fares several times in the past year, including one increase that lifted a cap on its maximum one-way price from $299 to $309 each way.

Kelly blamed the high cost of jet fuel for the increases, but pointed out that Southwest remains the low-fare leader in most markets.

Executives with the airline said they are trying to keep costs down with a stringent review of its operations nationwide, and some changes in Phoenix and Las Vegas, its two largest airports.

Productivity improvements at those airports have saved Southwest $4.6 million so far this year, said Greg Wells, the airline’s senior vice president for operations.

And a desktop software tool called “Ding,â€￾ which alerts customers to intermittent fare sales, has brought in $138 million in revenue this year.

Kelly said the carrier will continue to work to cut costs and boost revenues as it focuses on its goal to increase profits by 15 percent this year — a target they will likely achieve, he said.

“We don’t stand still at Southwest Airlines,â€￾ he said.

 

[SKY HIGH]

Only in America can companies file bankruptcy, then turn around and charge LESS than a non bankrupt low fare carrier and call that a "level playing field".

SKY HIGH STATES: ohhhh, REALLY NOW????????

What other news outlets are saying: The Associated Press reports that Southwest would not say how many seats would be set aside at the fare sales. The news agency notes that on a previous sale involving Dallas, AA often listed lower fares after Southwest's cheapest fares sold out. The Fort Worth Star-Telegram (free registration) notes "the local fare war comes amid a general increase in fares on airlines nationwide," including several fare hikes by discount giant Southwest. And this likely won't be the last promotion by Southwest in Dallas. ""Don't expect this is the last thing we're going to do," CEO Kelly tells The Dallas Morning News (free registration).

 

[KCFlyer]

SKY HIGH STATES: ohhhh, REALLY NOW????????

What other news outlets are saying: The Associated Press reports that Southwest would not say how many seats would be set aside at the fare sales. The news agency notes that on a previous sale involving Dallas, AA often listed lower fares after Southwest's cheapest fares sold out. The Fort Worth Star-Telegram (free registration) notes "the local fare war comes amid a general increase in fares on airlines nationwide," including several fare hikes by discount giant Southwest. And this likely won't be the last promotion by Southwest in Dallas. ""Don't expect this is the last thing we're going to do," CEO Kelly tells The Dallas Morning News (free registration).

Maybe I missed it, but when did Southwest file bankruptcy? And don't most airlines offer fare sales when new cities open up? And Dallas is a new city for most Southwest customers. Adding to that - for a few more years, Dallas is still going to be a one stop trip for most Southwest customers.

But it wasn't uncommon during United's 3 year bankruptcy tour to see them offer fares lower than Southwest or Frontier...matter of fact, many of the vocal UAL pilots were glad to point out that someone could fly on a "real"(albeit one in bankruptcy court) for less than they could one of the "low fare" carriers. I am sorry that the traveling public didn't thank the employees for subsidizing those fares by giving up pay, benefits and pensions.

 

[jbguppy]

Maybe I missed it, but when did Southwest file bankruptcy? And don't most airlines offer fare sales when new cities open up? And Dallas is a new city for most Southwest customers. Adding to that - for a few more years, Dallas is still going to be a one stop trip for most Southwest customers.

But it wasn't uncommon during United's 3 year bankruptcy tour to see them offer fares lower than Southwest or Frontier...matter of fact, many of the vocal UAL pilots were glad to point out that someone could fly on a "real"(albeit one in bankruptcy court) for less than they could one of the "low fare" carriers. I am sorry that the traveling public didn't thank the employees for subsidizing those fares by giving up pay, benefits and pensions.

SO it is great business sense when your beloved airline does it but not fair when others do. FYI, you are re-writing history when you say that UAL was offering lower fares during BK - we often tried and failed to raise fares to increase revenue during BK because we needed the money, but our competitors failed to go along with the hikes.

Want to guess who the biggest culprits were in keeping revenue down. 1- NWAC because they never needed to in MSP and DTW and 2 - SWA because they always advertise themselves as the "low cost leader".

This happenned, just as intense lobbying efforts by competitor airlines against ATSB and pension DRC revision. Someone has stated on this board that those claims are "out in left field" no, they were reality.

This kind of cutthroat competition has gone on all along in the industry, With companies filing "friend of the court" briefings in cases that they don't even have a say in. Fare wars are no different.

I do find it kind of amusing that CEO Kelly stated that they really need to drive revenue, but that won't necessarily mean higher fares. How many seats do you think are available for the low fares? I called SWA yesterday about one of their new non-stops and asked about the introductory fare travelling next February. - NO LONGER AVAILABLE.

JBG

 

[KCFlyer]

SO it is great business sense when your beloved airline does it but not fair when others do. FYI, you are re-writing history when you say that UAL was offering lower fares during BK - we often tried and failed to raise fares to increase revenue during BK because we needed the money, but our competitors failed to go along with the hikes.

My source - you, mags, and some of the other UAL employees who were quick to point out that "Southwest wasn't the lowest price".

Want to guess who the biggest culprits were in keeping revenue down. 1- NWAC because they never needed to in MSP and DTW and 2 - SWA because they always advertise themselves as the "low cost leader".

Actually - the ads for Southwest were "The low fare airline". That's what prompted so many United devotees to point out that THEIR fares were lower, and that Southwest was screwing over the public as advertising themselves as the "low fare leader". But I'll cede this to you, since I have discovered that United employees - especially the pilots - have the rare gift of never erring.

I do find it kind of amusing that CEO Kelly stated that they really need to drive revenue, but that won't necessarily mean higher fares. How many seats do you think are available for the low fares? I called SWA yesterday about one of their new non-stops and asked about the introductory fare travelling next February. - NO LONGER AVAILABLE.

Which nonstops? Outside the WA states, they still have to stop if they are going to Dallas. I had no trouble with the first February dates I entered from Denver to Orlando. But I'm curious - if they were sold out for the flights you found - what was United charging for flights on the same dates...more or less? If it's "less", is that Southwest's fault?

 

[convair880]

From another web site:

"Wall Street wants to make the short term bet on legacies. All the recent publicity is pointing that way, but no one is talking about the fundamentals. I don't think they mind that SWA stock is down, because they probably have a price that they would like to buy some LUV. For me the bottom line is the book value. What the company would be worth if it is liquidated. This number is hard to pin down. SWA is around $8.30 per share, and LUV has been trading around 2 times this for a while. AMR has negative shareholders equity, hence no book value, but is trading around $27. The new beefed up super lean LCC killer United(according to the press)has a book value of around $18. It is trading around $36. Looking at United's Balance Sheet they have 5.9 Billion Dollars in intangibles listed as assets. Intangibles would be things like copywrites, intellectual property, patents, or brand equity. I don't think there would be a line of people waiting to pay 5.9B for the United brand at their liquidation. If you took out Uniteds intangibles they would have a book value of 0. In comparison we have no intangibles listed on our Balance Sheet. So looking at the Bricks and Mortor I would rather by LUV. At least you would actually be buying a share of something. I am finally coming to grips with the fact that in the stock market, perception is reality.

Also:

ATW Daily News
Southwest expects to rebound from difficult third quarter
Friday November 3, 2006

Insisting that his carrier has "a number of weapons to choose from," Southwest Airlines CEO Gary Kelly told reporters and analysts at the company's Dallas headquarters this week that a 15% increase in year-end earnings remains a goal for both 2006 and 2007.

On the heels of a difficult third quarter during which net profit fell 77% (ATWOnline, Oct. 20), Kelly said Southwest expects fuel prices to continue to rise for the next four years and that "we know our focus now, and for the next several years, is to drive revenue growth."

The airline was enjoying another banner year before the third-quarter profit plunge, caused in part by the August terrorist scare and expenses that rose 19.5% from the year-ago quarter against a 17.7% increase in revenues. Nine-month profit of $442 million was up just 6.8% over the year-ago period, but Kelly is confident of a rebound despite some analyst skepticism. "We wouldn't mention it if we didn't believe we could do it," he declared.

Saying he did not want to "give a road map for competitors to follow," he would not reveal Southwest's specific revenue-enhancement strategy. But he claimed the carrier is "in position to better than other airlines due to competitive advantages."

Kelly added that costs are under control and said the airline is in the process of reviewing airport operations and looking for savings and efficiencies. He noted that there are plenty of growth opportunities in markets Southwest already serves, starting with Dallas. In conjunction with the announcement of a fare sale out of Dallas Love Field, he said load factors on flights leaving the airport have been approximately 65%, but the repeal of the Wright Amendment means Dallas "is like a new city for us."

The carrier remains reluctant to raise fares but will consider "modest" hikes in some markets. Kelly maintained that its low-fare brand is worth more than any individual increase and said he does not foresee an across-the-board fare hike in this quarter.

Southwest also would consider another codeshare agreement that might help boost loads (its deal with ATA Airlines is worth $50 million in revenue), but Kelly said one of the problems with partnering with other carriers is that "most of them have very unfriendly customer service and that doesn't work for Southwest Airlines."

It also will not start charging passengers for extras, and he said it has no plan to establish and charge for assigned seating. It continues to conduct tests in San Diego on a variety of boarding procedures but will not reveal the results. He said assigned seating only will be implemented if it is revenue neutral, ensuring no costs would be passed on to the customer.

"We're accelerating our growth at a time that our competition is decelerating," Kelly concluded. Southwest plans to take delivery of 37 aircraft next year.

 

[jbguppy]

From another web site:

"Wall Street wants to make the short term bet on legacies. All the recent publicity is pointing that way, but no one is talking about the fundamentals. I don't think they mind that SWA stock is down, because they probably have a price that they would like to buy some LUV. For me the bottom line is the book value. What the company would be worth if it is liquidated. This number is hard to pin down. SWA is around $8.30 per share, and LUV has been trading around 2 times this for a while. AMR has negative shareholders equity, hence no book value, but is trading around $27. The new beefed up super lean LCC killer United(according to the press)has a book value of around $18. It is trading around $36. Looking at United's Balance Sheet they have 5.9 Billion Dollars in intangibles listed as assets. Intangibles would be things like copywrites, intellectual property, patents, or brand equity. I don't think there would be a line of people waiting to pay 5.9B for the United brand at their liquidation. If you took out Uniteds intangibles they would have a book value of 0. In comparison we have no intangibles listed on our Balance Sheet. So looking at the Bricks and Mortor I would rather by LUV. At least you would actually be buying a share of something. I am finally coming to grips with the fact that in the stock market, perception is reality.

Also:

ATW Daily News
Southwest expects to rebound from difficult third quarter
Friday November 3, 2006

Insisting that his carrier has "a number of weapons to choose from," Southwest Airlines CEO Gary Kelly told reporters and analysts at the company's Dallas headquarters this week that a 15% increase in year-end earnings remains a goal for both 2006 and 2007.

On the heels of a difficult third quarter during which net profit fell 77% (ATWOnline, Oct. 20), Kelly said Southwest expects fuel prices to continue to rise for the next four years and that "we know our focus now, and for the next several years, is to drive revenue growth."

The airline was enjoying another banner year before the third-quarter profit plunge, caused in part by the August terrorist scare and expenses that rose 19.5% from the year-ago quarter against a 17.7% increase in revenues. Nine-month profit of $442 million was up just 6.8% over the year-ago period, but Kelly is confident of a rebound despite some analyst skepticism. "We wouldn't mention it if we didn't believe we could do it," he declared.

Saying he did not want to "give a road map for competitors to follow," he would not reveal Southwest's specific revenue-enhancement strategy. But he claimed the carrier is "in position to better than other airlines due to competitive advantages."

Kelly added that costs are under control and said the airline is in the process of reviewing airport operations and looking for savings and efficiencies. He noted that there are plenty of growth opportunities in markets Southwest already serves, starting with Dallas. In conjunction with the announcement of a fare sale out of Dallas Love Field, he said load factors on flights leaving the airport have been approximately 65%, but the repeal of the Wright Amendment means Dallas "is like a new city for us."

The carrier remains reluctant to raise fares but will consider "modest" hikes in some markets. Kelly maintained that its low-fare brand is worth more than any individual increase and said he does not foresee an across-the-board fare hike in this quarter.

Southwest also would consider another codeshare agreement that might help boost loads (its deal with ATA Airlines is worth $50 million in revenue), but Kelly said one of the problems with partnering with other carriers is that "most of them have very unfriendly customer service and that doesn't work for Southwest Airlines."

It also will not start charging passengers for extras, and he said it has no plan to establish and charge for assigned seating. It continues to conduct tests in San Diego on a variety of boarding procedures but will not reveal the results. He said assigned seating only will be implemented if it is revenue neutral, ensuring no costs would be passed on to the customer.

"We're accelerating our growth at a time that our competition is decelerating," Kelly concluded. Southwest plans to take delivery of 37 aircraft next year.

I understand that they need more revenue to support their growing costs...

That being said, if all they offer is a flight from A to B, but the experience is no longer subject to very low expectations based on very low price, then the product will not sell as well.

If they have to charge more money, then they have to compete on service, aircraft quality, and schedule.

Basic economics have already come to bear, they will have to improve upon the no-frills thing to compete if they want to charge the same money.

That means more non-stops, inflight meals, premium services, inflight entertainment, etc.

Their excuse for not offering has been people don't want to pay for it, well people won't pay the higher ticket price for nothing else but a streamlined baggage staff and better "execution".

A big problem with the plan and the expansion.


More capacity equals less pricing power for SWA as well, and that is a bigger problem for them than the other guys right now.

JBG

 

[KCFlyer]

If they have to charge more money, then they have to compete on service, aircraft quality, and schedule.

One of the newest fleets in the skies, and high frequency of flights...service pretty much exceeds that of the "legacies". For example:

That means more non-stops,

They already do that

inflight meals,

What percentage of domestic flights on UAL will give me a meal? Not one they sell me...one they GIVE me.

premium services,

do you mean like that service provided to those who pay full coach getting a tad more legroom on United?

inflight entertainment, etc.

I'd say the jury is still out on inflight entertainment - especially for domestic flights. I think that should oil go back up, and I feel that it will, then airlines are either going to do one of two things - pull any extra weight from flights...like, say, seatback TV sets...or ask the employees to give up more pay and bennies to support the costs of the IFE.

 

[jbguppy]

One of the newest fleets in the skies, and high frequency of flights...service pretty much exceeds that of the "legacies". For example: They already do thatWhat percentage of domestic flights on UAL will give me a meal? Not one they sell me...one they GIVE me. do you mean like that service provided to those who pay full coach getting a tad more legroom on United? I'd say the jury is still out on inflight entertainment - especially for domestic flights. I think that should oil go back up, and I feel that it will, then airlines are either going to do one of two things - pull any extra weight from flights...like, say, seatback TV sets...or ask the employees to give up more pay and bennies to support the costs of the IFE.

Your high frequency equals more stops than non-stops for those flyers not based in Kansas City..

SWA is a low cost no frills carrier, to assert otherwise is to redefine it, no so easy.

I think anything over 3 hours is meal service, but most will provide buy on board choices that sell very well.

The jury is out on inflight entertainment for you because you have no response to the issue.

What about assigned seats, upgrades, first and business class...

Sorry, if you want to charge the same money SWA has a long way to go, and to change those things their costs will skyrocket.

You will have to admit the farther they leave their niche, the harder it will get.

JBG

 

[KCFlyer]

Your high frequency equals more stops than non-stops for those flyers not based in Kansas City..

Really? I didn't know that. I guess I'll have to tell the folks in Omaha or Nashville, that those non stops are not what they appear to be.

SWA is a low cost no frills carrier, to assert otherwise is to redefine it, no so easy.

Southwest is transportation. Is going from point A to point B (via a change in Denver or Chicago) much different on United?

I think anything over 3 hours is meal service, but most will provide buy on board choices that sell very well.

Many can buy a nice meal for less in the airport.

The jury is out on inflight entertainment for you because you have no response to the issue.

I guess next round of high oil prices, it will only be their lower fuel usage that garners them a profit (because of the lack of seatback TV's)...right?

What about assigned seats, upgrades, first and business class...

How do you convince the guy who got ASSIGNED a center seat that it's better this way? Glad you mention upgrades and first and business class - when you give away those seats to your elite customers who are flying on a bargain basement ticket, is that making you any extra money?

Sorry, if you want to charge the same money SWA has a long way to go, and to change those things their costs will skyrocket.

According you your UAL cohorts, if SWA were to charge the same money, they'd have to charge less.

You will have to admit the farther they leave their niche, the harder it will get.

 

[Flying Photog]

I think that should oil go back up, and I feel that it will, then airlines are either going to do one of two things - pull any extra weight from flights...like, say, seatback TV sets...or ask the employees to give up more pay and bennies to support the costs of the IFE.

The latter, because we know they're not above screwing the worker bees.