Southwest Pit Flights

[BoeingBoy]

In the case of PHL, I feel sure you're right. PIT is where I'm not too sure. You have to completely disregard all the talk of "per head costs" because we've done that to ourselves (with some help from 9-11 for a while).

I'd almost be willing to bet that by the end of this year, WN will be emplaning more passengers from PIT than we are now, out of far fewer gates, so their "per head cost" will be more in line with CLT than PHL.

Besides, I don't have the data to break costs down to anywhere close to an airport by airport basis.

Jim

 

[funguy2]

PLUS with SWA what you really buy is NOT a confirmed seat but an opportunity to baord a plane to a specific destination. If the flight is oversold you get on the next one. At least that is my understanding.

I'm not so enamored with them never have been. It's an interesting business model to be sure.

Umm... This is really no different from the legacies who offer assigned seating to many, but not all passengers. Part of the difficulty of overselling a flight is that 2 different people cannot be assigned to seat 12F... So if the plane has 120 seats, and reservations for 130, at least 10 people do not have seat assignments.

In short, a seat assignment is no guarantee you get on the airplane, but rather its a mechanism to help some people sit where they want without having to show up at the airport 2 hours early to stand in line, and still get screwed when the thru passengers take the best seats anyway... The two concepts are almost identical, except that some people see value in doing it one way (i.e. reward the early birds for showing up early) and some people see value in doing it the other way (I still get my prefered aisle seat even if I am not in A group and have to go to the restroom, thus not stand in line, right before boarding...)

 

[a320av8r]

"If US is cheaper than WN when WN will be charging anywhere from $29 to $79 one way from PHL to PIT, how long can US possibly stay around?"

These are introductory fares- purchase within the next few days.

 

[ELP_WN_Psgr]

However, when you go into a new market and INTENTIONALLY UNDERPRICE your product the objective is clear: you're trying to kill your competition.

Look at it through eyes that aren't so biased towards keeping USAirways in business.

You have a stagnant market....two large cities in the same state roughly 300 miles apart...that have a strong community of interest between them.

This market can only be described as stagnant...422 O&D passengers per day between the two...because they have been held hostage to extraordinarily high fares for a long time. There has been no incentive to fly.

You are an airline entering the market. You want to shock the market back to life....sort of like paramedics do when they have a heart patient keeled over.

To shcock the market, you are going to come in with extraordinarily low fares. You are going to want to wake people up. That is the purpose of a $29 ticket. Not to kill USAirways. Not to bleed them dry. No, you are coming in with some $29 seats so that you let the population now that hay, there's a choice.

It's all about average airfare anyhow. I could argue that as long as the average airfare garnered on a route exceeds the cost of production, you are okay. Otherwise USAirways matching Southwest anyplace would be illegal.

But the $29 seats won't be what hurts U the most. It's the $79 walk up fares that will. And THAT, very simply, is where Southwest makes all its money.

Bob or somebody was posting that Southwest only had the low airfare in markets 26% of the time. I have no doubt but what that is absolutely correct. 74% of the time you can buy an advance purchase cheapie fare on a legacy carrier for less than what Southwest would charge.

But you can never find walk up fares on anyone that are as reasonable as what Southwest makes available as a general business practice.

 

[EyeInTheSky]

I'd almost be willing to bet that by the end of this year, WN will be emplaning more passengers from PIT than we are now

[post="248613"][/post]​

That would be interesting. And, in some 'weird way' US Airways should take advantage of that...that being connecting passengers. I brought up the interlining issues in another note. US Airways should have a manned kiosk at Southwest baggage claim to check bags into US flights. Charge people so much per bag instead of them lugging all the way over to the US terminals. It's a thought...

 

[justaumechanic]

For the umteenth time, I can buy a ticket for a Trenton Thunder game for $8.00 and get an assigned seat. When SWA sells a ticket for $7.99 then I'll fly them.

Sorry to be full of ego here but my time is valuable and I not queuing up for the precious "A" boarding card so I can get a decent seat.

For SWA and how they are successful, Triple BBB laid the whole thing out on a cocktail napkin in a way that I could understand. It's a clever business model and you have to hand SWA alot of credit.

No seat assignment just does NOT work for me. And until that changes I'm not buying a ticket PERIOD!!!!

Afterall Spirit, Jet Blue, Frontier & AirTran, can all master the LCC business model AND sell an assigned seat. those carriers will get my business NOT SWA!

[post="248617"][/post]​

Thats ok.. You don't have to wait for the 7.99 WN ticket.. They don't want your business anyway.. Southwest is the master of the game... If you don't want to fly on them they don't care because there are 10 others that will. You are in the minority big time..

Southwest in PIT is huge.. They will stimulate massive traffic. At the fares they are charging with the MAX fare at 299 they will crush US Airways.. Crush them.

You can go to the airport and buy a ticket to LA for 299 right now.. Walk up and buy it.. 299.. Go to the US Airways ticket counter and try the same thing.. You will be suprised.. Then again maybe you won't.

32 years of sustained profitability.. They are doing something right.. And all the nay sayers saying they would be losing if they had not hedged fuel.. Well they did hedge it so they made money.. Make your point.. Profits are profits.. Take my word for it US Airways would be jumping in the streets if they could make a million a quarter profit.. 4 million a year profit is so much better than 500 million a year loss..

Southwest has good leadership, they offer the right product and they know how to treat their employee's.. Simple as that.. Its a winning formula.

 

[EyeInTheSky]

ELP_WN_Psgr, I agree with a lot of what your saying; however, PIT-PHL is not a stagnant market...it's been a one airline monopoly for years. Still, I disagree, Southwest is trying to kill US Airways. Let's face it: They've done a masterful job at going after US Airways' weaknesses, which as we know are abundant. That being said, since US Airways is touting itself as a "Low Cost Airline" they must match or exceed pretty much everything Southwest does in ticket prices and change policies. It's time for US Airways to go to the mattresses....

 

[funguy2]

whlinder: Right on!

USA320Pilot comments: I have seen the new business plan and the confidential financial projections and your numbers are way off, but what’s new? The business plan accounts for fuel prices that correspond to Crude Oil Future Contracts at a prices much larger than $35 per barrel. Furthermore, US Airways expects to be profitable later this year, with most of the loss coming in the first quarter. Furthermore, the company expects a net profit in 2006.

USA320Pilot: Well, apparently your information must be dated, or somehow out of sorts... I believe it was you, USA320Pilot, who has continued to say, over and over, that with the TP schedule in February, utilization will be increased, block hours will be increased, all be cause ALPA loosened work rule clauses in the contract which allow for 95 (or close to) block hour months...

Unfortunately, in YOUR post in the thread called "On Time", you quoted Lakefield as follows:

In his most recent phone message to employees, Bruce Lakefield congratulated employees for running an efficient, reliable operation during the initial course of the schedule change. He pointed out that “this occurred even with shorter turn times and a reduction of block hours from the schedule. Both represent a significant increase in efficiency and cost savings.â€￾

A reduction in block hours from the schedule does not sound like the increased block hours and utilization you have told us is evidence of the Transformation Plan. Furthermore, there has been no announcements of new flying based on routing aircraft more efficiently. In essence, the Transformation Plan thus far has not produced the things which you say it includes on the basis of your viewing the confidential information. So why should we believe you when even management and your own posts contradict you?

Everyone: Does anyone know when AirTran flew the route, and how many daily passengers there were? Seems like a real opportunity to look at history as a guide. I will hazzard a guess that fares dropped to similar levels, and passenger traffic soared. Of course, US Airways carried the traffic that AirTran stimulated, as folks in PHL and PIT voted with their wallets AND their FF program. But when the LCC went away, I'll bet lots of people went back to the PA Turnpike...

 

[BoeingBoy]

Call it what you will, but the PIT-PHL traffic numbers for 3Q of 02, 03, & 04 are"

2002 - 627 ($180 average O/W fare)
2003 - 463 ($260 average O/W fare)
2004 - 422 ($266 average O/W fare)

Jim

 

[shaka]

Well said ELP_WN_Psgr. The phl-pit market has been stagnant and once again Southwest is going to back Bronner and Company back into that same corner they are used to standing in.

I must admit Southwest is the wrong airline Bronner wants breathing down his neck, these folks are damn good at what they do.

 

[BoeingBoy]

Everyone: Does anyone know when AirTran flew the route, and how many daily passengers there were? Seems like a real opportunity to look at history as a guide. I will hazzard a guess that fares dropped to similar levels, and passenger traffic soared.

[post="248627"][/post]​

I think it was diogenes that mentioned they started service just before 9-11.

2Q01 - 742 pax per day @ $226 average O/W fare (FL not listed)
3Q01 - 1004 pax per day @ $90 average O/W fare (US - $101, FL - $54)
4Q01 - 842 pax per day @ $85 average O/W fare (US - $92, FL - $55)
1Q02 - 968 pax per day @ $90 average O/W fare (US - $99, FL - $48)
2Q02 - 866 pax per day @ $124 average O/W fare (US - $133, FL - $51)
3Q02 - 627 pax per day @ $180 average O/W fare (FL not listed)

Obviously, 9-11 had an effect on passenger numbers - how much for this market is anybody's guess.

Jim

 

[funguy2]

Good work BoeingBoy. Its easy to see the stimulation effect of a low-fare carrier in that example.

 

[ClueByFour]

In conclusion, Since you do not work at US Airways

Thus, unlike a U mainline pilot sliding toward the bottom of the list, I have many options that will continue to pay me 6 figures. It brings objectivity, as opposed to spinning everything left and right to keep my seat.

and obviously have an “xx to grindâ€￾

Really? I think CCY has taken the best group of employees in the business and driven the place into the turf--twice. I've been consistant in this message. You, on the other hand, have been all over the map in order to try to consistantly defend a failed (twice, and going on thrice) business plan with innuendo and unnamed sources. I believe you claimed to have seen the last business plan ("competitive RJ response," anyone)? I guess, in that light, both your word and the business plan itself are questionable at best, or is it "no, we really think this plan will work...

I don't really believe you have seen the business plan. I don't believe that executives whisper in the ear of line pilots (specifically so they don't do what we see here and on the ALPA boards). They don't have enough time in one MEC session to which you were lucky enough to hold a proxy to breif all of this stuff (much less the NDA's themselves). In short, your insider information (which has proven to be worth less than the bandwidth required to download it) is bunk.

I find your comments to be ClueLess. But what’s new?

You want to play "go after the poster?" I'll obviously play. In the meantime, post any information (above what you insinuate and have no corroboration for) to suggest that U will have a lower cost structure than B6 or LUV or retract.

BTW, why has no exit investor, much less a DIP investor, lined up for such a juicy prospect yet?

Reality at 11.

 

[Phoenix]

I believe they're revenue passengers, which would exclude non-rev commuters.

Jim

[post="248581"][/post]​

Yeah, some of them are paying commuters because the planes are so packed!

 

[mweiss]

PLUS with SWA what you really buy is NOT a confirmed seat but an opportunity to baord a plane to a specific destination.

That's true with anyone. I've had "my" seat taken away from me more than once, without any compensation.

If the flight is oversold you get on the next one. At least that is my understanding.

That understanding is half of the story. If a flight is oversold and you don't get on, you get on the next one. It's called an IDB. According to the DOT Air Travel Consumer Report, WN had 0.64 IDBs per 10,000 passengers in Q4, 2004. US had 0.76 IDBs per 10,000, 19% more than WN. In other words, it happens on US, too, and 19% more often than it happens on WN.