OT: WN ANNOUNCES NEXT CITY

[767jetz]

This is really a tired thread... zzzzzzzzzzzzzz...

IAD is a fortress for UA. And UA has learned quite well how to compete with the WN's and F9's of the world. Sure it will be more competition in some markets. But there are many people out there who refuse to fly WN at any cost. And I'm not just talking business travelers.

Example, the builder of my current home and his wife are a retired couple who travel exlusively on leisure. They recently flew WN from Islip to Florida for a cruise. On their return they vowed never to use WN again. They couldn't stand the "cattle car" operation and said it was like taking the bus.

Now factor in frequent flier programs and the reach of STAR Alliance, and you have solid customer loyalty. Sure there are some passengers who will chase price. There always will be. But trust me... this is nothing like USAir in Baltimore. I don't know the exact numbers, but just compare the number of markets served by UA just from Dulles to the number WN serves nation wide.

Cost is the only marketable advantage WN has. And it is a diminishing one. No one is going to be running away scared. If anything, IMO this is a bad move for WN and will only weaken them. They'd be better off sticking with airports like Baltimore and Midway. I'd be more worried if DL or AA decided to set up shop in IAD.

 

[KCFlyer]

Despite your cheerleading for SWA, their costs have been rising more than many airlines out there. With pilot raises of 10 percent recently while others are reducing rates - they are simply losing their cost advanatage. One of the problems with a point to point operation is that with all the ground time, it is inherently less eficient than longer haul, also the lack of a revenue premium is coming to bear as well. Jetblue's recent fall from grace should be an example of overexpansion and the resulting problems associated. In the past SWA would never have gone into DIA or IAD, now they have to pursue higher revenue customers to support an ever increasing cost structure. They will begin to make noises about labor costs after the contracts at NWA and DAL are finalized. Those deliveries will be in part deferred in the future as well.

Just simply continue to believe, it will make it easier for the rest of us.

"SWA vs the world, taking on all comers!!!"

We will see...

JBG

"All that groundtime"???? Yeah, short haul jets are on the ground about 30 minutes from touchdown to takeoff. That's about half the amount of time that a hub carriers planes are parked at the gate (not making money, I might add). Funny....not that long ago y'all were saying things like "BWI isn't DC...Southwest doesn't fly there". But now that they have announced it, suddently it's "overexpansion". JetBlue isn't a real good comparison. Jetblue announced a whole new aircraft type and grand plans to start service to lots of "smaller" cities...Southwest announces Denver & DC and that's "overexpansion". And not every UAL jet that pulls away from a gate is going on a "long haul". Fact is, most of them are going about the same distance as a Southwest jet.

And it strikes me as odd....the sense of pride in pay and benefit cuts to "become competitive".

 

[jbguppy]

"All that groundtime"???? Yeah, short haul jets are on the ground about 30 minutes from touchdown to takeoff. That's about half the amount of time that a hub carriers planes are parked at the gate (not making money, I might add). Funny....not that long ago y'all were saying things like "BWI isn't DC...Southwest doesn't fly there". But now that they have announced it, suddently it's "overexpansion". JetBlue isn't a real good comparison. Jetblue announced a whole new aircraft type and grand plans to start service to lots of "smaller" cities...Southwest announces Denver & DC and that's "overexpansion". And not every UAL jet that pulls away from a gate is going on a "long haul". Fact is, most of them are going about the same distance as a Southwest jet.

And it strikes me as odd....the sense of pride in pay and benefit cuts to "become competitive".

I am certainly not happy about our wage cuts, or proud. Simply stating the facts. As far as your statement about most of our jets going the same distance as SWA, not even close - we have over 360 jets that can fly farther than the 737 (except perhaps NG) and we use them to do so.

SWA has historically been a very sound economic operation, they are in fact straying away from what has made them successful - and all the declarations to the contrary are just "head in the sand" hopes and dreams.

It strikes me odd, the sense of pride in being the cheapest
and most like greyhound...what happens if you are not cheapest anymore???


JBG

PS -yeah I know, your not an employee, just a SWA groupie...

 

[convair880]

It's not all about you. What I mean is that SWA doesn't go into a market to harm or suck passengers away from a competitor. They usually stimulate new traffic and fill up the planes nicely with little concern to competition. They don't care about going to a "lot" of markets but are concerned with going where the city pair can make the most money. Going to "more markets" does not necessarily convert to more profits and is often little more than ego such as "Worldwide Service" painted on the side of airplanes. Do you want "worldwide service" or do you want to be profitable? Additionaly SWA wanted Dulles before Airtran or JetBlue could get much of a foothold there.

Again -- some of you need to read the article on page 45 of the April 3 edition of "Aviation Week and Sapce Technology" magazine titled "Hedging Isn't the Only reason for Southwest's Low Costs". SWA is well aware of increasing employee labor rates and decreasing hedges but has found ways to mitigate them. For example - walk thru a SWA terminal and you'll see half the gate podiums unmanned yet flights are operating from the associated gates. They have consolidated podium personnel resulting in fewer people. The point to point flying results in more efficient use of personnel and equipment to the point in which it more than offsets the higher labor rates. Any other airline do 10 flights a day from a leased gate? On a stage adjusted basis, SWA average yield is nearly equal to the 2000 level, an impressive statistic considering network carriers are down about 18%. Even though fleet rationalization has occured at the netwrok carriers fuel efficiency per seat at these carriers has not reached SWA levels (reference AWST article). SWA percentage of owned airplanes versus leased is far far higher than any other airline resulting in certain advantages. The airline is run so efficiently in so may ways that people at traditional network carriers just will never understand and are locked into just thinking about fuel prices and labor rates without considering various areas of efficiencies that offset.

As far as -- " they are in fact straying away from what has made them successful - ..." A company that keeps their head in the sand and doesn't evolve and change with the times is doomed. Just look at what's happened to all the network carriers.

 

[ualdriver]

And it strikes me as odd....the sense of pride in pay and benefit cuts to "become competitive".

The pride is no different, I guess, than the pride any other SWA employee felt when SWA was growing and growing due to its low costs. How soon we forget that SWA enjoyed low costs not only due to their high labor productivity (among other things) but also their "below market rate" labor force. SWA pilot total compensation, for example, was SIGNIFICANTLY less than legacy pay rates until recent years. That's why many pilots used SWA, until recently, as a stepping stone to the majors. Just because they're one of the highest paying airlines right now doesn't change the fact that for most of their existence SWA paid much less.

So again, I guess we all feel the same sense of "pride in pay and benefit cuts" as SWA employees did for most of their existence, using lower pay, no pension, and worse work rules to help subsidize the undercutting of the legacies.

 

[FWAAA]

You all are a bunch of simpletons. UAL vs LUV is more complex than CASM, what do you think your silly comparison would look like if UAL pulled out economy plus? Also, all those SWA employee raises are not factored into your numbers.

I love your attitude as you think LUV has it made forever, do us all a favor and keep believing that. The rest of the industry will appreciate it as well I would believe.

Where will you move your corporate HQ if PHX starts to do something for US Air????

JBG

Hey, make that consistently Profitable Simpletons.

Not consistently money-losing simpletons, like UA management.

Sure, WN is not invincible. Its recent changes may in fact harm its string of consistent profits.

Then again, it may actually be able to change while staying in the black.

Meanwhile, UA's competitive response has been a "pretend low-cost division" called TED. Run by the same high-cost personnel as the mainline (although their pay has been whacked over the past three years). All I can say to UA is "good luck with that."

I'm not cheerleading for WN to win and UA to lose. I'm just pointing out how tough WN is gonna make it for UA to win on the domestic side.

Yeah, yeah, I know - UA flies all over the world. Something WN and B6 will likely never do. But to feed all those international flights, and to support high-frequency domestic routes like LGA-ORD, UA has to attract lots of non-business, "fly whichever airline is cheapest that day" pax in addition to the frequent flier mile addicts and high-yield business pax. WN is gonna make it difficult for anyone (not just UA) to attract enough of those domestic-only low-fare crowd that are necessary to the success of UA's hub-and-spoke model.

 

[KCFlyer]

It strikes me odd, the sense of pride in being the cheapest
and most like greyhound...what happens if you are not cheapest anymore???
JBG

PS -yeah I know, your not an employee, just a SWA groupie...

Surprise!! Here in Kansas City, Southwest dominates. Every Sunday in the paper, they list the lowest fares found to about 20 different cities. Southwest isn't mentioned in a single one of them, but the bankrupt, recently bankrupt or nearly bankrupt carriers are mentioned several times. So Southwest apparently isn't the cheapest anymore. Looks like your strategy is to attract those "greyhound riders" away from Southwest.

 

[FWAAA]

Surprise!! Here in Kansas City, Southwest dominates. Every Sunday in the paper, they list the lowest fares found to about 20 different cities. Southwest isn't mentioned in a single one of them, but the bankrupt, recently bankrupt or nearly bankrupt carriers are mentioned several times. So Southwest apparently isn't the cheapest anymore. Looks like your strategy is to attract those "greyhound riders" away from Southwest.

Conventional wisdom is that nobody is willing to pay extra for anything associated with air travel. Is it possible that WN might be the exception to that general rule?

WN fares are not always the cheapest, but they're always fair. And more and more people learn that everyday. So WN may be successful at building some loyalty - people may think "Why bother checking every other airlines' fares - Southwest is always reasonable."

 

[UALDC767]

Meanwhile, UA's competitive response has been a "pretend low-cost division" called TED. Run by the same high-cost personnel as the mainline (although their pay has been whacked over the past three years). All I can say to UA is "good luck with that."

FWAA,

High Cost Mainline? Where and how do you figure?

Can you tell me what UAL employees on TED make more than SWA employees?

Not knowing other employee groups, I can tell you that the Pilots don't. And I would be surprised if the gate/ramp/F/a's don't as well.

So if the employee costs on a comparative basis (Ted vs. SWA) for the same market, coupled with Ted's larger seat capacity (156 vs 137 (i think)) then the seat mile cost for Ted should be less. Right? Of course you have to fill those extra seats, which Ted has been doing.

Heck even a mainline flight would be paid less (since there is no seperate payscale) than SWA for comparable equipment.

So mainline isnt so "high cost" as you espouse. A SWA Captain makes more per hour then one of our 747 Captains!!!

DC

PS IF anyone can post some comparisons between the various other workgroups of SWA vs. UAL would be nice.

thanks

 

[jbguppy]

Conventional wisdom is that nobody is willing to pay extra for anything associated with air travel. Is it possible that WN might be the exception to that general rule?

WN fares are not always the cheapest, but they're always fair. And more and more people learn that everyday. So WN may be successful at building some loyalty - people may think "Why bother checking every other airlines' fares - Southwest is always reasonable."

The statement that SWA is always fair and reasonable is just perhaps the most subjective statement I have ever read on this board.

You are simply another SWA cheerleader based upon their past success and cannot consider the possibility that they are managing their way into the rest of the industry, right now - out of necessity. With their fuel hedged at around 36 dollars a barrell for 06, they should out earn everyone by a mile...

That won't happen because of revenue increases that are going to the legacies and their stupid non-stop service and amenities. SWA cannot command and will not benefit equally from that.

Good Luck, SWA's best days are in the past,

JBG

 

[FWAAA]

FWAA,

High Cost Mainline? Where and how do you figure?

Can you tell me what UAL employees on TED make more than SWA employees?

There's a big difference between high wage and high labor costs. WN is in the first group (high wage) and UA is in the second group (high labor cost). The difference results from the amount of output per employee, and WN seems to squeeze more out of every employee hour than any other airline.

Yes, everyone knows that WN pilots are the highest paid in the majors. IIRC, they make more per hour than all except for AA's 777 captains. Their hourly rate exceeds all UA pilots.

Ted is simply a low-amenity carrier, not a low-cost carrier. Same high-costs.

 

[KCFlyer]

That won't happen because of revenue increases that are going to the legacies and their stupid non-stop service and amenities. SWA cannot command and will not benefit equally from that.

Good Luck, SWA's best days are in the past,

JBG

The problem is that a lot of the revenues going to the legacies are $X, and the cost to the legacy to provide that service is $Y, and X-Y is coming up to be a negative number. I don't care if you sell out every seat on the plane for every flight that is flown, as long as that equation works out to a negative number, all the revenue in the world would not be a good thing.

Legacy non stop service is usually only for folks travelling to or from the hub city. For me to get to Los Angels on United, I gotta stop in Denver.

 

[jbguppy]

The problem is that a lot of the revenues going to the legacies are $X, and the cost to the legacy to provide that service is $Y, and X-Y is coming up to be a negative number. I don't care if you sell out every seat on the plane for every flight that is flown, as long as that equation works out to a negative number, all the revenue in the world would not be a good thing.

Legacy non stop service is usually only for folks travelling to or from the hub city. For me to get to Los Angels on United, I gotta stop in Denver.

Considering the time you spend posting on the board, you have time to stop in Denver....

Seriously, if I had to travel to LAX from MCI - I would go for the non stop as well. I am glad you prefer non-stop travel vs point to point to point. For MCI-lax your answer is SWA if you don't mind the ride. In most cases the best non stops will not be on that carrier. You get what you pay for.

Good Luck

JBG

"why have frequent flyer miles when there is nothing to upgrade to?"

 

[KCFlyer]

Considering the time you spend posting on the board, you have time to stop in Denver....

Seriously, if I had to travel to LAX from MCI - I would go for the non stop as well. I am glad you prefer non-stop travel vs point to point to point. For MCI-lax your answer is SWA if you don't mind the ride. In most cases the best non stops will not be on that carrier. You get what you pay for.

Good Luck

JBG

"why have frequent flyer miles when there is nothing to upgrade to?"

Since I'm not titanium elite on United, and just end up riding in coach anyway, what extras does my money buy me over SWA?

 

[whlinder]

Conventional wisdom is that nobody is willing to pay extra for anything associated with air travel. Is it possible that WN might be the exception to that general rule?

WN fares are not always the cheapest, but they're always fair. And more and more people learn that everyday. So WN may be successful at building some loyalty - people may think "Why bother checking every other airlines' fares - Southwest is always reasonable."

And you can ALWAYS use the full value of your ticket if your itinerary changes. Sure wish the legacies would do this...