Southwest 'casually' Looking At Smaller Jets

[JS]

Originally posted by Ch. 12:
I sincerely hope that WN is smart enough to stay away from turboprops. There is an inherent negativity among the general public in regards to props and to go against the public will is not the WN way. There is no good way to market a turboprop. Props would be good if WN decided to fly to LNK or smaller but are of little use to a LCC that still wants to serve respectable markets. BUT, if they do wish to serve more of the mid-sized markets with high frequency, there are small enough RJs.

Every other airline out there has assigned seats, yet Southwest has managed to convince millions of Americans that assigned seats aren't necessary. It has to be possible for Southwest to convince people that turboprops aren't a death sentence.

One of these days I'm going to have to find out the cost of operating a turboprop and a regional jet of the same capacity (or if you know, just tell me). Should turboprops be cheaper, well, that's a plenty good exuse for using them, isn't it?

The public's fear of turboprops is a symptom of a larger problem. Too many people let the TV and the likes of Scary Mary tell them what to think. If people used reason and science rather than fearmongering, we wouldn't be burning coal and wasting natural gas just to generate electricity, we wouldn't have hoards of SUV's on the streets for "safety" reasons, and we wouldn't have 3 hour flights on regional jets. Instead, we would have cheap, safe and environmentally friendly nuclear power generating our electricity, we would have cheap, safe and environmentally friendly sedans on our roads, and we would have short turboprop flights to a nearby hub to connect to a comfortable mainline flight.

 

[Ch. 12]

I couldn't agree more that the fear of turboprops is unfounded. I also know that a business decision can't be made on what the perception SHOULD BE, but rather what it PRESENTLY IS. And although I don't doubt that the CASM on a turboprop is lower than an RJ (which are fairly uneconomical in my eyes), the RASM will be equally, if not more-so, lower on the turboprop. If there isn't a demand to fill the low CASM seats, then WN would be eating them.

Another issue is that if WN were to get smaller aircraft, it would not be the model of an AE or Comair. The purpose would not be to feed mainline but rather to serve full O&D's. I don't think that WN would start markets just for feed...they would only go to small markets if the local traffic is large enough to sustain high loads. That has been their model all along and I hope they stick with it. Feeder hubs are not profitable. It is the true local markets that generate the profit.

 

[JS]

"they would only go to small markets if the local traffic is large enough to sustain high loads."

That is impossible. The definition of a "small market" is one that does NOT have large amounts of local traffic.

The only way any airline, Southwest included, can serve small markets (profitably, anyway) is to use smaller planes. Should Southwest not go after small markets, their only choices for future growth (besides the gradual growth of existing markets) are places like BOS, LGA, JFK, EWR, ATL, DEN, etc., or international.

The problem with limited future growth is that profits will continue to drop towards zero. Limited growth will not bring in the profits seen in the past, while labor costs continue to rise due to increasing seniority.

 

[Ch. 12]

By "small markets", I had meant smaller cities. There are many opportunities (away from high cost areas such as DEN/ATL/JFK) that are still available to WN before heading to the tiny cities served with turboprops by the AE's, ACA's, Mesaba's, Mesa's, Great Lake's, etc, etc. It makes no sense to waste a turboprop on a market large enough to sustain a jet and it makes no sense to go to props (adding a huge complexitiy and cost issue to the WN business plan) if there are still markets available to them. For a long time, WN looked only at what would work for them and did not try to mimick other carriers. Now it looks as though they are trying to emulate JB which is finally starting to show weaknesses itself.

But...back to my first point...the public does not embrace turboprops. For the largest PR airline out there, it makes no sense for WN to follow a model that will discourage travel on them.

 

[JS]

By "small markets", I had meant smaller cities. There are many opportunities (away from high cost areas such as DEN/ATL/JFK) that are still available to WN before heading to the tiny cities served with turboprops by the AE's, ACA's, Mesaba's, Mesa's, Great Lake's, etc, etc.

Like what? They're all gone. Adding a RIC every other year is not going to hold back the increasing seniority that comes with slow growth. Eventually the "RIC"'s keep getting smaller, and labor costs will continue to inch upward. Does it make any sense for Southwest to have service at a station with three flights a day? Talk about inefficient.

I'll offer an alternative to expansion, and that is to jettison the unions and pay people what they are worth in terms of experience rather than in terms of seniority.

Assuming the chances of that happening is zero, Southwest's only choice is to expand into smaller markets.

I agree with you that there are some operational advantages to having planes of around 100 seats rather than a big gap between 30 or 50 seats and 122-137 seats. However, there is a cost to those operational advantages, and that is multiple fleet types.

In other words, from one perspective, the ideal fleet consists of planes having 1 seat, 2 seats, 3 seats, 4 seats, ..., 599 seats and 600 seats. Obviously, the cost of maintaining such a fractured fleet is huge, so the airline has to make do with gaps in capacity from one aircraft to the next.

Honestly, I do not know why JetBlue is ordering 100 seat planes when they already have A320's. I don't believe the small difference is worth the second fleet type, especially for an airline the size of JetBlue (nowhere near as large as Southwest or any other major).

Same for Southwest -- how could the cost of a second fleet type possibly justify planes having merely 22 fewer seats? Southwest already makes do with a load factor lower than the typical major airline. What's another 22 seats here and there?

How many markets are there that simultaneously satisfy these two criteria: 1) big enough to support a 100 seat plane; 2) too small to support a 122 seat plane. I think the number of markets like that is ZERO. The demand market is just not that exact.

We all know that morning and evening is a more popular time to fly than mid-afternoon, and that Monday and Friday is a more popular time to fly than Saturday. The way to bridge much of the gap between 30-50 seat turboprops and 122-137 seat 737's in the medium size markets is to put the 737's on the peak flights and the turboprops on the off-peak flights.

 

[Art at ISP]

Here's a wild thought: How 'bout a "New Generation" 737 series with the original, stubby 737-100 fuselage? HP had a few old -100s (originally built for MSA and Avianca) that were configured 107Y back in the '80s , so with WN's roomier pitch it would probably work out to be just about 100 seats.
Maybe Boeing would bite if an airline like WN showed enough interest. It would give them a smaller plane without adding a totally new fleet type.
The "737-550", anyone? B)

There is one--it's called the 737-600, and it's around the size of the -200 if not a bit shorter. It's costs are supposedly high since they are the almost the same as for the -700 and it carries fewer passengers.

 

[AirwAr]

....

How many markets are there that simultaneously satisfy these two criteria: 1) big enough to support a 100 seat plane; 2) too small to support a 122 seat plane. I think the number of markets like that is ZERO. The demand market is just not that exact.

...
The way to bridge much of the gap between 30-50 seat turboprops and 122-137 seat 737's in the medium size markets is to put the 737's on the peak flights and the turboprops on the off-peak flights.

JS,
I'm not really sure why you are so stuck on turboprops, especially given the reasons that CH.12 has posted. I think it would take very specific routes for a turboprop to work, such as, operating in a market were there is no jet competition.

However, I agree with you on your analysis that the demand in markets is not that exacting to allow for a 22 seat difference. I think it would be interesting to see what WN could do with 50 seat RJs. Not only could they serve smaller markets, but they could get around the Wright Amendment. All an airline needs is to have aircraft with less then 56 seats and they could fly from DAL to anywhere in the US.

 

[JS]

JS,
I'm not really sure why you are so stuck on turboprops, especially given the reasons that CH.12 has posted. I think it would take very specific routes for a turboprop to work, such as, operating in a market were there is no jet competition.

However, I agree with you on your analysis that the demand in markets is not that exacting to allow for a 22 seat difference. I think it would be interesting to see what WN could do with 50 seat RJs. Not only could they serve smaller markets, but they could get around the Wright Amendment. All an airline needs is to have aircraft with less then 56 seats and they could fly from DAL to anywhere in the US.

According to Ch. 12, RJ's cost more to operate than turboprops (of the same seating capacity I assume). That should be a good enough reason.

If Southwest starts to jack up their costs more than necessary just to be like the other guys, I would sell LUV, 'cause it means the party's over. Southwest survived and then prospered in large part because of their cheapness.

Look how long they held on to their grotty plastic boarding passes. You get paper now supposedly because of new secret security requirements, not because people got tired of those re-usable plastic boarding passes.

I don't expect Southwest to use 50 seat jets out of Love Field anytime soon, if ever. AA will simultaneously flood the market from DFW and sue half the Metroplex to stop that. Just take their reaction to Legend and multiply by 25.

 

[KCFlyer]

JS,
I'm not really sure why you are so stuck on turboprops, especially given the reasons that CH.12 has posted. I think it would take very specific routes for a turboprop to work, such as, operating in a market were there is no jet competition.

However, I agree with you on your analysis that the demand in markets is not that exacting to allow for a 22 seat difference. I think it would be interesting to see what WN could do with 50 seat RJs. Not only could they serve smaller markets, but they could get around the Wright Amendment. All an airline needs is to have aircraft with less then 56 seats and they could fly from DAL to anywhere in the US.

According to Ch. 12, RJ's cost more to operate than turboprops (of the same seating capacity I assume). That should be a good enough reason.

If Southwest starts to jack up their costs more than necessary just to be like the other guys, I would sell LUV, 'cause it means the party's over. Southwest survived and then prospered in large part because of their cheapness.

Look how long they held on to their grotty plastic boarding passes. You get paper now supposedly because of new secret security requirements, not because people got tired of those re-usable plastic boarding passes.

I don't expect Southwest to use 50 seat jets out of Love Field anytime soon, if ever. AA will simultaneously flood the market from DFW and sue half the Metroplex to stop that. Just take their reaction to Legend and multiply by 25.

I'm completely opposed to SWA introducing any second type of aircraft into their fleet, but which is more profitable - an RJ at 8 cents per mile fully loaded, or a turboprop at 5 cents per mile that is half empty because the customer got the heebie jeebies thinking about boarding a plane with a propeller and bought a ticket on the competitors RJ instead?

 

[JS]

KCFlyer, I've taken many turboprop and RJ flights, and I have not noticed a significant difference in the load factor between those and the jet version.

For example:

AVL-CLT on a Dash-8 -- completely full
CLT-AVL on a Dash-8 -- completely full
DFW-HOU on an EMB-120 -- full during the day, lightly loaded at 5:40 AM on a Sunday morning
DCA-GSO on a Dornier 328 -- completely full, on a Saturday afternoon to boot
GSO-CLT on an ERJ -- pick a seat, any seat
PIT-CAK and back on an ERJ -- virtually empty
PIT-GSP on an ERJ -- virtually empty
CAK-PIT and back on a Dornier 328 -- 1/2 to 3/4 full
DCA-PHL on a Dash-8 -- full
LAX-FAT on a Saab 340 -- 1/4 full, early on a Sunday morning
IAH-DFW on an ERJ -- 3/4 full
TUL-DFW on an ERJ -- 1/4 full on a Saturday evening
DFW-PHX on a CRJ -- full
DFW-MGM on a CRJ -- almost empty
etc.

The load factor seems to be a function of time of day more than anything else.

 

[KCFlyer]

KCFlyer, I've taken many turboprop and RJ flights, and I have not noticed a significant difference in the load factor between those and the jet version.

For example:

AVL-CLT on a Dash-8 -- completely full
CLT-AVL on a Dash-8 -- completely full
DFW-HOU on an EMB-120 -- full during the day, lightly loaded at 5:40 AM on a Sunday morning
DCA-GSO on a Dornier 328 -- completely full, on a Saturday afternoon to boot
GSO-CLT on an ERJ -- pick a seat, any seat
PIT-CAK and back on an ERJ -- virtually empty
PIT-GSP on an ERJ -- virtually empty
CAK-PIT and back on a Dornier 328 -- 1/2 to 3/4 full
DCA-PHL on a Dash-8 -- full
LAX-FAT on a Saab 340 -- 1/4 full, early on a Sunday morning
IAH-DFW on an ERJ -- 3/4 full
TUL-DFW on an ERJ -- 1/4 full on a Saturday evening
DFW-PHX on a CRJ -- full
DFW-MGM on a CRJ -- almost empty
etc.

The load factor seems to be a function of time of day more than anything else.

I'll put a "personal spin" on this then. I wanted to go from MCI-AVL. USAirways only had turboprop service into AVL. Delta had jets. Guess which one got my business. You know as well as anyone that when LUV enters a market, the other airlines will match the fare. If LUV would enter the market with the distinct disadvantage of a turboprop plane (and they ARE a disadvantage to a lot of travellers), they will be cedeing a chunk of business to the competition - something that LUV hasn't done very much of at all in their history.

 

[JS]

Then why doesn't Southwest offer meals, or seat assignments (let alone advanced seat assignments), a First Class cabin, frequent flier trips on partner airlines, elite status check-in, and so on? Just think of all the revenue Southwest is leaving on the table for other airlines to grab.

 

[SWAFA30]

JS,

Look how long they held on to their grotty plastic boarding passes. You get paper now supposedly because of new secret security requirements, not because people got tired of those re-usable plastic boarding passes.

Nothing "secret" about it. Post 9/11 the FAA/TSA required that we verify the person who booked the flight was the person who boarded the flight. The only way to do that was to issue a passenger specific boarding card. At first, you got both the plastic boarding card and a printed paper card for ID purposes. However, it did not take long for that to become cumbersome so the logical thing to do was to do away with the plastic boarding card. Believe it or not most passengers actually miss the old boarding cards....they were such an integral part of the SWA experience. During irregular ops you will still see the old plastic cards now and then.

 

[KCFlyer]

Then why doesn't Southwest offer meals, or seat assignments (let alone advanced seat assignments), a First Class cabin, frequent flier trips on partner airlines, elite status check-in, and so on? Just think of all the revenue Southwest is leaving on the table for other airlines to grab.

Because people have shown that they are willing to forgo meals, movies, first class and assigned seating - most folks don't have a fear of missing these things (except for the pantywaists who think not having an assigned seat is more horrible than having your fingernails pulled out with pliers), yet they will still hold on to their irrational fear of anything with a propeller on it.

 

[mga707]

There is one--it's called the 737-600, and it's around the size of the -200 if not a bit shorter. It's costs are supposedly high since they are the almost the same as for the -700 and it carries fewer passengers.

The fuselage lengths of the -200/-500/-600 are all nearly identical: 100-102ft.

My hypothetical new variant would have the 94ft length of the original 737-100. The -100 is not well known, as only 30 were built, mostly for 737 launch customer Lufthansa. PeoplExpress/Continental later used these aircraft. Malaysia-Singapore (they were one airline then) and Avianca were the only other buyers. I believe the last operational -100 was the purple Phoenix Suns plane ("Barney Jr.") that America West retired about four years ago.
Boeing very quicky had to stretch the airframe and create the -200 to get orders from United/Western/Piedmont and other early operators.