Luv Into Phl

[funguy2]

On the congestion issue:

I'll bet SWA probably realizes that PHL would be a lot less congested if USAirways was no longer operating... Since they have a ton of cash, and are profitable (while USAirways doesn't have a ton of cash and is not profitable), SWA is probably banking on the fact that it can outlive a "fare war" with USAirways, because a fare war would simply bleed U to death. In fact, they have probably moved in to help the demise of USAirways. Once U is gone, PHL is uncongested and in need of a lot of airline service... LUV will be there to fill in the void. Its a plan that, in the eyes of LUV, makes sense and is doable...

For Airways, this is a wakeup call... there is nowhere else to run and hide... Maybe this is part of Chip's UCT... First abandon the PA hubs... PIT because its unprofitable, and PHL to low-fare competiion, then US with a hub one remaining hub, CLT, and RJ focus cities at BOS, LGA, PHL, and DCA can take-over UAL!!!!

But seriously, if U is forced to scale back PHL over time (and history seems to dictate it will happen), either a sale is inevitable... The only other alternative is to completely rebuild the company from scratch, and I mean everything... marketing, scheduling, labor contracts (i.e. productivity gains). I just don't think that all the different sides can come together and do it... And certainly not with the immediacy thats needed...

I don't think U will just give up and stop flying on 4/30/04... But I do think this will hasten their demise, when all of a sudden, key gravy runs (i.e. ORD, west coast, FLA) don't produce any gravy, there will be problems...

Everybody has been saying since 9-11-01 that this industry has changed forever. I think this announcement is solid proof. Thats just my opinion.

 

[robbedagain]

Thanks for the post response ART.
I am a U employee and I have heard rumors that SWA would come to ABE but I think that is probably never going to happen. If us abandons pit and goes to IAD wouldnt that pretty much tell us that this airline is dead?

 

[GadgetFreak]

I dont live in PHL, but I sure hate to see this as a US flyer. US bet the farm on PHL and I dont see any way they arent going to get their clocks cleaned by SWA.

SW has:

better management
Far less labor strife
Much lower fares
Far less restrictive and complicated ticketing rules
Comparable service in many ways
A better reputation for customer friendliness

I think the only hope for US is to essentially come up with something they havent had for as long as I can remember: a reasonable value proposition for customers. That means provide better service than SWA for slightly higher prices. It doesnt mean if SWA is charging $299 max for a one way ticket charging $350 max for a one way highly restricted ticket. If means charging $350 max for a one way, UNRESTRICTED TICKET, and providing better service. Currently the fare for such a ticket on US is closer to $1500 than $300 on many routes. That isnt viable, US doesnt provide that much better service.

With the admission that I am not an optimistic person, I dont see a good outcome in this. I dont think US will react quickly enough, aggressively enough or creatively enough to survive this. I think they are too close to the edge to run or survive the loss in PHL business.

 

[N421LV]

On the congestion issue:

I'll bet SWA probably realizes that PHL would be a lot less congested if USAirways was no longer operating... Since they have a ton of cash, and are profitable (while USAirways doesn't have a ton of cash and is not profitable), SWA is probably banking on the fact that it can outlive a "fare war" with USAirways, because a fare war would simply bleed U to death. In fact, they have probably moved in to help the demise of USAirways. Once U is gone, PHL is uncongested and in need of a lot of airline service... LUV will be there to fill in the void. Its a plan that, in the eyes of LUV, makes sense and is doable...

I would have to agree. It's the St. Louis strategy all over again: put up with the delays while betting the incumbent will eventually draw down ops. It's about to finally pay off big in STL...

 

[RowUnderDCA]

I think SW will be willing to put up with PHL because they realize if US Airways goes away then the door is wide open for them in PIT & CLT. PHL will be a necessary evil for SW but if it helps put the final nail in our coffin then it will be a wise investment for them.

That's a very good point. WN needs to keep growing to keep its workforce junior, otherwise, it begins to look like a mature carrier without so much of its cost advantage. And what's the downside? Not much. Again, wouldn't WN ops at PHL be like their ops at DTW? I still could see:

PHL- rolling hub, serving the PHL O and D and providing some hubbing and international service

PIT- MidAtlantic hub, providing mid-atlantic connectivity throughout the day with reduced cost and some of UAL's operations lost from ACA

IAD- Star Alliance hublet and DC long-haul O and D to complement DCA.

I know, I know.... DoT. But I'd take a stab at it anyway. They'll be happy as long as WN is in PHL and jetBlue can grow at IAD..... I think.

 

[mrman]

That's a very good point. WN needs to keep growing to keep its workforce junior,

Southwest has been around for 30 years. I believe you can still see the lines on the DAL based "Stews" legs from those go-go boots they used to wear.

Are they not older than US Air? When was the Piedmont merger?

 

[TomBascom]

KC,

Your illustrations of SW being a business oriented carrier don't fly here in the east. Also, the routing SEA-ISP or whatever was fine--I'd rather connect than sit on a plane through 3 stops.

SW in the east caters primarily to Joe and Jill Priceline--and that's fine. As long as the fares are fair and US continues to offer service where I need to go, I see no reason to change. I know you're a SW fan, so I am a US fan--I think we need to agree to disagree.

Thanks anyway and good luck.

Actually they do work just fine in the East. I even know people who fly WN on business to ISP.

WN knows what a customer is. They don't make the mistake of classifying customers as "business" or "leisure" based on the fare that they pay. As KC points out WN's route structure is actually very business travel friendly. For years they've been sneaking around pretending that they're all about "leisure" travel but the facts tell a very different story. Don't buy the propaanda -- that just qualifies you to run a legacy airline and you're smarter than that.

Complain all you want about cattle calls and the lack of assigned seats but when it comes right down to it Southwest's product is a pretty darned good business product. Especially now that the US product has been utterly debased and is nothing but a parody of its former self.

 

[MarkMyWords]

I agree with Tadjr.....CCY is going to have to start this operation over from scratch. Everything from aircraft utilization to employee productivity. From fares to amenities.

I found this quote from Dave to be interesting. It was found in a revision of the previous press release about WN's entry into PHL.

"Why shouldn't the major U.S. international airlines cooperate with (low-cost carriers) to feed their international or even long-haul domestic services," Siegel said. "Why not bring low-cost carriers into the major carrier frequent flier programs or other marketing efforts."

Could this be Chips UCT? I wonder what an A330 would look like in baby crap brown. :blink:

 

[GadgetFreak]

Hate Dave? Continue to do so if you choose. But in this case I would submit to you that "The Enemy of my enemy is my friend". In order to stay in business US MUST unite and fight the common foe not each other.

Truer words are seldom spoken nor more likely to be ignored.

 

[FLYLOW22]

On the congestion issue:

I would have to agree. It's the St. Louis strategy all over again: put up with the delays while betting the incumbent will eventually draw down ops. It's about to finally pay off big in STL...

Yeah. That's why SWA is pulling service from STL.....

 

[ClueByFour]

"Why shouldn't the major U.S. international airlines cooperate with (low-cost carriers) to feed their international or even long-haul domestic services," Siegel said. "Why not bring low-cost carriers into the major carrier frequent flier programs or other marketing efforts."

That's funny.

In case Dave-O has buried his head in the sand, he will note the transcons being flown by WN and B6, some of which originate at BWI (oh, the irony). I remember flying BWI-SFO on US. Not anymore.

US, should it survive, will end up shrinking to a commuter/regional, soley to feed UA's international ops and the LCCs mainline domestic operations. Brilliant.

LUV does not need to feed US to survive. He's grasping at straws.

 

[Fatherknowsbest]

Today's news is nothing less than chilling to U's Employees (this one anyway). My best guess before today was that U had 18 to 20 months before Bronner would just shut it down because there were no profits. Now my guess is 12 months.

There is no way (for U) to compete with LCC's that also have highly motivated employees. They are motivated at SW and JETB because of stock options. They (and rightfully so) will go head to head with anyone to keep the thousands, tens of thousands, and more that are held in their accounts. (Don't forget costs are already much lower than U - even after chapter 11)

Wolf, Gangwal, and now Siegel all had the opportunity to "share the wealth" with employees. They all decided they wanted the wealth just for themselves, they made that bed, Siegel will pay dearly for it. You cannot motivate employees with Management that has no moral character.

The competition learned long ago the employees will work harder and motivate themselves when they are given a piece of the action. That way it's much easier to keep everyone on the same page, for the same goals and working together.

I have joked for months, that if Rakesh hadn't forgotten to leave "plan B' in the desk drawer, Siegel would still be looking for a plan.

It may not be too late for US Airways, but this is the death sentence for Siegel. He is not capable of rallying the troops.You have to be a decent human being to have that chance.

Good luck for all the U Employees and Families

 

[mga707]

Southwest has been around for 30 years. I believe you can still see the lines on the DAL based "Stews" legs from those go-go boots they used to wear.

Are they not older than US Air? When was the Piedmont merger?

Answers: No, and 1989.

The Piedmont merger was not the start of USAir. the name change from Allegheny to USAir occurred ten years earlier, in 1979. Allegheny had been around as one of the original Local Service carriers for many, many years. Originally called All American, mail service started in 1939 and passenger service a decade later, in 1949.

Southwest is now 32 years old, starting intrastate Texas flights in 1971.

 

[whlinder]

Umm, I don't think WN is too worried about the PHL weather... they manage to do just fine with nearly 40 flights a day in Seattle. :blink:

 

[cavalier]

Today's news is nothing less than chilling to U's Employees (this one anyway). My best guess before today was that U had 18 to 20 months before Bronner would just shut it down because there were no profits. Now my guess is 12 months.

There is no way (for U) to compete with LCC's that also have highly motivated employees. They are motivated at SW and JETB because of stock options. They (and rightfully so) will go head to head with anyone to keep the thousands, tens of thousands, and more that are held in their accounts. (Don't forget costs are already much lower than U - even after chapter 11)

Wolf, Gangwal, and now Siegel all had the opportunity to "share the wealth" with employees. They all decided they wanted the wealth just for themselves, they made that bed, Siegel will pay dearly for it. You cannot motivate employees with Management that has no moral character.

The competition learned long ago the employees will work harder and motivate themselves when they are given a piece of the action. That way it's much easier to keep everyone on the same page, for the same goals and working together.

I have joked for months, that if Rakesh hadn't forgotten to leave "plan B' in the desk drawer, Siegel would still be looking for a plan.

It may not be too late for US Airways, but this is the death sentence for Siegel. He is not capable of rallying the troops.You have to be a decent human being to have that chance.

Good luck for all the U Employees and Families

YES! The sound of reason and truth which is refreshing.

U's managements reaction to the LCC is with threats and heavy handed tactics which are destroying this airline a little each day while at the same time the LCC's are only becoming more successful each day with their opposite approach of management style.