Scott Kirby's CLT Crew News Update - July 29

[AirbusAVE]

Two points:

1. CLT doesn't have the O&D, just like PIT. If WN ever decides to enter they may have a profound affect, just like BWI.

Charlotte: cheap to operate out of
Pittsburgh: Expensive to operate out of

Charlotte: Is not near another US Airways Hub
Pittsburgh: Was near another US Airways hub

Charlotte: Provided US Airways access to the southern region
Pittsburgh: Provided US Airways access the same region as Philadelphia

Charlotte: Is in a region where there are only 3 airline hubs (Airtran, Delta, US airways)
Pittsburgh: Is in a region where there are 8 airline hubs (LCC, CAL, UAL, B6, DAL, AMR, WN, Airtran)


What makes you so sure Southwest would tear up US Airways at Charlotte? Surely you do not come to these conclusions based on US Airways pull-out of Pittsburgh? If you think US Airways would dismantle Charlotte just so Southwest could have flights to Las Vegas, Phoenix, Baltimore, Philadelphia, Orlando, Tampa, and Chicago (the cities that Southwest flies from Pittsburgh) ... then... power to you.



US Airways is strong at Charlotte - Unlike in Pittsburgh where US Airways was weak. If Southwest only has 7 destinations in Pittsburgh where US Airways is clearly not willing to put up a fight, what makes you think Southwest would come in Charlotte and decimate a very strong US Airways?



Edit: Regarding your second point about Shutting out IAD or PHL in a possible United/US merger. Neither would be shuttered. Both have large enough O&D to warrant hub/focus city status. Unlike Pittsburgh.

 

[hp_fa]

What are you suggesting?

Something akin to blackmail/extortion. I'm not sure what US Airways wants or desires right now but pretend for a second that it knows that it could sell much of its LGA assets to SWA. SWA would get instant presence at LGA. Everyone else would be terrified. So US Airways makes it know that gee, we could do this if we so chose and others come and inquire about what it might take to keep US Airways from doing that.

Like I said, a far out hypothetical.....

 

[luvn737s]

There is no reason a well managed airline can't capitalize on the asset that it has in LGA. I'd like to think that applied to US.

 

[nycbusdriver]

Yes, I am aware of how US Airways abandoned PSA's western operations. I just wasn't aware that Southwest specifically was the airline that got control of US's PSA operations. I at least thought American and United also gobbled up US/PSA operations.

Years after USAir pulled out of the west coast, Herb Kelleher was interviewed regarding the success of SWA. During that interview he said that SWA was getting hurt really badly on the west coast in the face of USAir's (PSA's) competition. He was weeks away from announcing a major west coast pullout by SWA, when Seth Schofield blinked first. SWA, given that huge victory over the much larger USAir, then became unstoppable as Herb started chewing away at everything USAir....and deer-in-the-headlights Seth Schofield caved at each challenge.

Kelleher has also been quoted as saying that the best thing that ever happened to SWA was USAir.

 

[nycbusdriver]

What makes you so sure Southwest would tear up US Airways at Charlotte?

I'm certain SWA would decimate USAirways in CLT inside a few years. In BWI, SWA started with one route to PVD, and USAir matched them fare-for-fare and airplane-for-airplane. What SWA has, and USAirways never did and still doesn't, is marketing savvy. SWA comes in with the media guns blazing, and suddenly no one even knows that USAirways is competing on the same routes. Then, SWA starts to grow itself route by route, picking off the best yielding (for USAirways) cities pairs from that hub one by one. Soon, the airport is jumping all over themselves supporting SWA, building new concourses for them, and adding their own media spin to get more business for SWA.

It will happen in CLT. It will happen in LGA. Unless USAirways get some management talent, it will happen that way in whatever city SWA decides to enter. SWA never comes into our hubs/focus cities to "kill us." They come in and inflict a million little cuts on us and we eventually bleed to death because we don't have the talent, ability and wherewithal to heal even the first of those million little cuts.

 

[usa1]

The way IM reading this, Republic holds all the cards on this deal?

Republic Buys Planes, Slots From US Airways.(Republic Airways Holdings, US Airways Express)
July 11, 2005

US Airways has decided to accept Republic Airways' offer to buy its fleet of Embraer 170s.

Last March, Republic offered US Airways a deal worth $235 million. It would invest $125 million to help recapitalize the bankrupt carrier and pay $110 million for the 28 existing Embraer planes and future purchase options, as well as the slot rights at New York LaGuardia Airport and Ronald Reagan Washington National Airport .

Sold to Republic and leaseback to US Airways
financing of 113 commuter slots at Washington Reagan National
Airport and 24 commuter slots at New York LaGuardia Airport.

 

[wings396]

I'm certain SWA would decimate USAirways in CLT inside a few years. In BWI, SWA started with one route to PVD, and USAir matched them fare-for-fare and airplane-for-airplane. What SWA has, and USAirways never did and still doesn't, is marketing savvy. SWA comes in with the media guns blazing, and suddenly no one even knows that USAirways is competing on the same routes. Then, SWA starts to grow itself route by route, picking off the best yielding (for USAirways) cities pairs from that hub one by one. Soon, the airport is jumping all over themselves supporting SWA, building new concourses for them, and adding their own media spin to get more business for SWA.

It will happen in CLT. It will happen in LGA. Unless USAirways get some management talent, it will happen that way in whatever city SWA decides to enter. SWA never comes into our hubs/focus cities to "kill us." They come in and inflict a million little cuts on us and we eventually bleed to death because we don't have the talent, ability and wherewithal to heal even the first of those million little cuts.

I'm not to sure about that. It hasn't happened in PHL, and SWA has been there for a few years already. As the SWA workforce grows more senior, so will their costs. I have seen some SWA customer service first hand, and it ain't nothin to write home about. I was in line for a ticket with a friend, and the CSA's dealt with most of the passengers just like a big herd of cattle just as they do at the gate. In todays economy, even the mighty SWA has demonstrated that they to can lose money. A looming contract issue with their Pilots, along with a voluntary early-out progran demonstrate that they need to cut back in some areas as well. I wouldn't start packing up the supplies in CLT so fast. I agree that if PIT were such a goldmine after the US pulldown, that SWA would have swarmed the place with hundreds of flight by this time. Yoou can only go head to head with so many competitors in their hubs before it catches up with you. Is SWA a good company, certainly. But are they invincible? NO.

 

[captainJack]

I quickly typed notes from a Webcast and I'm not very good at dictation. If I could listen and type at the same time I could use better grammer; however, in many instances I directly quoted Scott. I tried to quote Scott and type, which is not easy to do. Have you ever tried to do this?

Given your self-professed deficiencies, why not just post the link or say where you got it? That way, you can actually let others interpret Kirby's speechifying from their own background and experiences.

BTW, transcribing from video, done right, is tedious and down to earth, hard work.

 

[ClueByFour]

US Airways is strong at Charlotte - Unlike in Pittsburgh where US Airways was weak. If Southwest only has 7 destinations in Pittsburgh where US Airways is clearly not willing to put up a fight, what makes you think Southwest would come in Charlotte and decimate a very strong US Airways?

WN's costs are several cents/mile lower than US. Ballgame.

Put WN's PHL operation in CLT, and it would immediately kill US' profitability, because they'd be unable to soak the last minute flyer out of CLT for $1/mile anymore.

 

[ClueByFour]

I'm not to sure about that. It hasn't happened in PHL, and SWA has been there for a few years already.

You presumably took note of the 2nd East bankruptcy filing, correct?

 

[captainJack]

You presumably took note of the 2nd East bankruptcy filing, correct?

Would you care to point out how that is relevant?

 

[ClueByFour]

Would you care to point out how that is relevant?

Mainline yields at PHL were collapsed to the largest domestic destinations by LUV.

 

[FutureUScapt]

You presumably took note of the 2nd East bankruptcy filing, correct?

And you have taken note that WN's daily departures at PHL will be down 20% YOY at the end of 2009 vs end of 2008, and that WN has discontinued service from more cities at PHL than they have from any other station in recent years, possibly the most ever?

Mainline yields at PHL were collapsed to the largest domestic destinations by LUV.

Yields will diminish anytime capacity is added to an existing market, and if they don't, it represents a failure of the incumbent's revenue management team in the first place.

 

[Pacemaker]

Pretty amazing the preeminent carrier in the northeast can't make money in the region's most important city. Sounds like the lack of a midwest hub still haunts the airline. Big gap between PHL & PHX.

 

[john john]

Baltimore is the only market I can think of that US Airways "gave" Southwest...

Just get a time table form WN and look at the cities that US mainline use to dominate in
There are your answers Of course you have to know US past history

You sounds like you live in the desert in denial