Southwest business model

[JS]

Re bankruptcy, it's not the case that airlines get a free pass. Any business can file Chapter 11, and it is expensive, not a joy ride. Bankruptcy law is necessary in order to provide an organized process to liquidation (Chapter 7), or to avoid having to go Chapter 7 (Chapter 11 or 13). Chapter 11 is a win-win situation, where creditors may get something and the business gets a second chance at life.

 

[Flying Photog]

does this mean they will have to pull out of the newer southwest airports?

I think they're more likely to pull flights out of OLDER cities than the new ones. :blink:

 

[KCFlyer]

Re bankruptcy, it's not the case that airlines get a free pass. Any business can file Chapter 11, and it is expensive, not a joy ride. Bankruptcy law is necessary in order to provide an organized process to liquidation (Chapter 7), or to avoid having to go Chapter 7 (Chapter 11 or 13). Chapter 11 is a win-win situation, where creditors may get something and the business gets a second chance at life.

Oh...no doubt that it's not a joyride or cheap. But what it DOES do is allows a company to operate for several years (United) or multiple times (USAirways) while they "restructure" their debt. In the meantime, they operate as though they've had a clean slate - cheap seats galore - and as a result, they put a strain on the finances of other, healthier carriers. In a time when the lower fares were caused by "too much capacity", the bankruptcy courts are keeping that overcapacity intact. Oh sure...the SWA detractors love to come back with "Southwest shouldn't have added so much capacity of their own". But you know what would happen if the bankruptcy courts had either provided for one "grace bankruptcy" or put a reasonable time limit to emerge from bankruptcy? It would have resulted in a reduction in capacity...that would be picked up by the stronger, healthier carriers.

As it is - the liberal bankruptcy laws, IMHO, are a big reason why Delta and Northwest had no choice but to file. What condition would they have found themselves in if the bankruptcy courts told U that they had already had their one "grace bankruptcy", or that United had to be out within one year? And when an employee of one of those poorly managed "Chapter 11 Queens" comes on to a board proclaiming bad news on the horizon, with smiley "thumbs up" signs in the post...well...

 

[magsau]

And when an employee of one of those poorly managed "Chapter 11 Queens" comes on to a board proclaiming bad news on the horizon, with smiley "thumbs up" signs in the post...well...

SWA business model broken?

Didn't want to disappoint. The music is playing for SWA, something I have been saying for a long time. Glad you are getting what is due. Enjoy the ride, I sure have.

 

[KCFlyer]

SWA business model broken?

Didn't want to disappoint. The music is playing for SWA, something I have been saying for a long time. Glad you are getting what is due. Enjoy the ride, I sure have.

Really? I thought you said UAL would be showing a billion something profit after their emergence from bankruptcy. What happened? Don't look know, but if you listen close, I think you might hear the first few notes of a funeral dirge for UAL.

 

[ramper_in_las]

Re bankruptcy, it's not the case that airlines get a free pass. Any business can file Chapter 11, and it is expensive, not a joy ride. Bankruptcy law is necessary in order to provide an organized process to liquidation (Chapter 7), or to avoid having to go Chapter 7 (Chapter 11 or 13). Chapter 11 is a win-win situation, where creditors may get something and the business gets a second chance at life.

Yes I understand what you are saying but why should any business be allowed to keep its doors open when they are letting millions of dollars slip through their hands daily (pre bankruptcy) if was any other business besides an airline it would have been shut down...

 

[scuba]

Yes I understand what you are saying but why should any business be allowed to keep its doors open when they are letting millions of dollars slip through their hands daily (pre bankruptcy) if was any other business besides an airline it would have been shut down...

Really, let me see.......the list is long, but distinguished....K-Mart, Sam Waltons first two companies, (liquidated) Dow Corning Corp, Southwestern Life Corp, Trans World Airlines, Grand Union Co, Rockefeller Center Porperties, Petrie Stores Corporation, Caldor Corporation, Harrah's Jazz, Bradlees Inc, Anchor Glass Container, Best Products, Ernst Home Center, 7UP/RC Bottler of Southern California, Presidio Oil Company, Marvel Entertainment, In-Flight Phone Corp, MobileMedia Corp, Alliane Entertainment Corp, Montgomery Ward Hldg, Acme Metals, Inc, Venture Stores Inc, Boston Chicken, Inc, Fruit of the Loom, Inc, Service Merchandise, Owens Corning, Montgomery Ward, LLC, Enron, Pacific Gas and Electric Co, Bethlehem Steel Corp, Sunbeam Corp, WorldCom Inc, Global Crossing, Budget Group, McLeoudUSA Inc, Kaiser Aluminum Corp, Fleming Companies, Winn-Dixie Stores...and the list goes on and on and on. I don't think any of the above companies were shut down the day they filed for bankruptcy.

And each one of these companies, at some point had some pointy headed analyst, who never worked a day in their industry tell them, 'if you don't change x, you are headed y.' And don't foget the analyst who stated on national TV that Donald Trump was headed for bankruptcy if they didn't change...he got fired. Then Trump Industries, (or one of his gazillion companies) went into bankruptcy just like the analyst stated. Sometimes an analyst can call it and sometimes not.

Now all that being said, I agree with the post that said something like, 'wake me up when...' Southwest has beat the predicted death each and every time that others seem to wish on them. Those who think that the magician behind the curtain doesn't have a few more tricks to pull out of the hat is sorely mistaken. I'm sure that Southwest will plug along, slow but steady, taking advantage of opportunities that may arrise along the way, and when the time is right, they will make their mark once again on the industry. They have more equity in their company, (ie the best balance sheet in the industry) that if they needed to they could start some of the tricks the majors did in the late 80's and during the 90's. Sale/lease back of aircraft. Sale/lease back of gats. Set up XZY Corp to sell points with online auction, then sellout to bidder, ABC for cash.

Of course, if things really got bad, they could always dump the company off onto the employees, raid the bank, and leave fat dumb and happy. Then the employees could not see the trees form the forest and demand the, (what was it, oh yeah, "Industry Leading Contract") head of the CEO over and over and over. Eitherway, they have at least twenty years or more to play those games until they dump the company off on the employees and then the company still has another six to seven. Now all that being stated, lets see, 1971 to 2007 is 36years. 30 years to play games, (66) five to six to establish who will fund the ESOP, (72) five years for ESOP to run its course, (78) two years for them to implode on themselves, (80) then they should arrive into Bankruptcy Court in 2051 at the corporate age of 80, which would be three years older than United Airlines was when they made the fateful trip, the oldest airline at this point to go to bankruptcy (but not corporation.)

BTW, yes, I am bitter that United Airlines filed bankruptcy. Had they listend to me and all my ideas, they never would have made it there.

 

[KCFlyer]

I'm sure that Southwest will plug along, slow but steady, taking advantage of opportunities that may arrise along the way, and when the time is right, they will make their mark once again on the industry.

Great point. One of the things that has always been brought up about Southwest is "Well...try getting to Paris or Tokyo on them". Braniff International failed in large part because they expanded to a boatload of US cities and crowed about daily nonstops from DFW to Dusseldorf. It seems that several other airlines felt the same way..."We gotta be in the Pacific...we gotta get more Eurpoean destinations...we gotta buy this regional carrier to serve Podunk....we gotta get sleeper seats in First Class...we gotta capture the leisure market...we gotta be everything to everybody." Meanwhile Southwest was content to NOT be everything to everybody. Why worry about sleeper seats, Tokyo, Paris and Podunk when you have a slower growth plan in the good old U S of A? Sure...I can't get to Tahiti on Southwest, but does that really matter when all I wanted to do was get to Nashville? Yeah...can't turn in my miles (on all those discount "mileage runs" I took) to go to Tahiti...but does it do the other airlines any good when their Tahiti seats are filled with mileage runners redeeming their mileage awards?

 

[I'mRayFlyMe]

SWA business model broken?

Didn't want to disappoint. The music is playing for SWA, something I have been saying for a long time. Glad you are getting what is due. Enjoy the ride, I sure have.

Hey Mags, how's your buddy TED doing? 😀

 

[magsau]

Really? I thought you said UAL would be showing a billion something profit after their emergence from bankruptcy. What happened? Don't look know, but if you listen close, I think you might hear the first few notes of a funeral dirge for UAL.

I did?? Show me a post and I will admit I was wrong. As for the funeral dirge, it might just be SWA's that you are hearing and mistaking it for UA's. I have heard the that song before and we were given a life anew. So you can just keep hoping. In the meantime don't forget to call all the press folks and tell them they are wrong about SWA. There could be nothing wrong with them, right?

If you are not going to enjoy this, then I will.

TED is doing fine. In fact TED is doing much better than SWA at IAD. I have an old friend that we call BK. He said he was going to look you guys up at SWA and give you a visit. He is tons of fun. Doesn't buy his own drinks so you will have to cover him out of your pocket but he said his visit to you was well over due.

 

[SKY HIGH]

And when an employee of one of those poorly managed "Chapter 11 Queens" comes on to a board proclaiming bad news on the horizon, with smiley "thumbs up" signs in the post...well...

Ohhh, CORN BOY,
every airline has their day....just maybe, it's YOUR TURN.

 

[KCFlyer]

Ohhh, CORN BOY,
every airline has their day....just maybe, it's YOUR TURN.

Yep...you've had your two turns (three if you count your savior airline). You're a funny guy....first you blame Southwest for "lowering the bar" in the industry...after all, your management told you that they couldn't afford to keep paying you MORE than Southwest paid their people. So today, you make LESS than Southwest employees, and rather than pointing to them and telling YOUR management that you should be paid as much, you would rather see them take cuts and visit bankruptcy court. Amazing. You want a never-ending vicious circle to start...a "race to the lowest" if you will. Because you know, just as soon as SWA employees end up making less than you, your management will once again point to them and tell you that you can't compete when you are paid so much more than they are. For your sake...I hope your dream comes true...it'll be a blast watching you go thru another round of cuts.

 

[swflyer]

Really?

Uh, my "ignore posts" for Magsau only works when you don't quote his post to respond.

Thanks in advance 😀

 

[SKY HIGH]

Amazing. You want a never-ending vicious circle to start...a "race to the lowest" if you will. Because you know, just as soon as SWA employees end up making less than you, your management will once again

........obviously, your ALCOHOLIC former CEO, Ohh, Herb blew the cardinal rule at your AIRLINE. Keep costs down. You now have high LABOR COSTS, and soon, HIGHER FUEL COSTS.
You keep flying those half empty planes around as your FUEL COSTS rise. LOL. You're cost advantage is disappearing, like your full flights. LOL. And, you have the nerve to say....."race to the lowest?" Your JED CLAMPLETT Airline has forever changed the industry to NO FRILLS. It USED to compete on service, now?....lol, you call service, HERDING passengers onto flights with your tacky A, B, C lanes, (hanging from the ceiling in LAX), handing them a drink off a tray, and arriving at your destination. Wow, Worldclass!
And, CORN BOY, keep thinking your not white trash in that 400,000 dollar house in """"KANSAS""""". Isnt it time for you to do your walking laps at the Mall yet????

 

[KCFlyer]

........obviously, your ALCOHOLIC former CEO, Ohh, Herb blew the cardinal rule at your AIRLINE. Keep costs down. You now have high LABOR COSTS, and soon, HIGHER FUEL COSTS.
You keep flying those half empty planes around as your FUEL COSTS rise. LOL. You're cost advantage is disappearing, like your full flights. LOL. And, you have the nerve to say....."race to the lowest?" Your JED CLAMPLETT Airline has forever changed the industry to NO FRILLS. It USED to compete on service, now?....lol, you call service, HERDING passengers onto flights with your tacky A, B, C lanes, (hanging from the ceiling in LAX), handing them a drink off a tray, and arriving at your destination. Wow, Worldclass!
And, CORN BOY, keep thinking your not white trash in that 400,000 dollar house in """"KANSAS""""". Isnt it time for you to do your walking laps at the Mall yet????

AFter those Clampitts have been herded on board, they get complimentary pillows or blankets. On flights over 2.5 hours, they get a snack pack. What does U provide the average coach passenger that is any different? Your right..the airlines DO compete on service. Sadly for you, SWA provides more service to regular old coach passengers (you know, the folks occupying the BACK 120 some odd seats on a US jet) than you do. Go ahead and call me white trash in a $400,000 house in Kansas...I'm still living in the lap of luxury compared to your $400,000 house in My #### don't stink East Coast US. Here's to another round of cuts for YOU after your dream of SWA bankruptcy comes true...