It has done nothing superior to it's competitors but hedge fuel, which has allowed it to expand while the rest of the industry has struggled to overcome a multitude of issues.
As that advantage begins to disappear, those who have bragged about how great a company and service SWA is and provides (you are among the loudest) will now be making excuses and I look forward to your continued presence here as you are going to be taking a lot of heat if/when SWA continues to merge with the industry financially.
There are a lot of press articles citing the decline of their fuel hedge, and that those that remain in place are NOT helping their bottom line as much as they should due to higher labor cost etc.
What comes around....
JBG
Boy, jb, for a disinterested neutral party you sure sound vitriolic.
I guess if push ever came to shove, Southwest could do what all the other airlines have done and eviscerate their employees' wages.
But it probably won't come to that. Not any time soon, anyhow. Southwest has some significant cost advantages that have nothing to do with fuel hedging.
The single fleet type is the first that comes to mind. The avoidance of the inefficiencies inherent in running a pure hub and spoke operation is another.
Have you looked at CASM ex-fuel for the various carriers. Yes, it is true, that with United paying First Officers a buck sixty an hour and making the Flight Attendants work for tips only, their labor cocsts have dropped and they are closer to Southwest in CASM than they once were.
But the problem is, and will continue to be, that their raw CASM is higher than Southwest's and, if adjusted for average stage length, is a whole lot higher.
If the legacy carriers, now that they've crapped on everyone's paycheck, ever start to make a profit how long do you think it will be before we start hearing the wails of the various unions wanting to recoup some of the lost pay and benefits (the answer is it won't be long at all).
Thus, what we are looking at is a SOuthwest Airlines Co whose labor costs will remain stable (or could go down, if management there did what management every place else did) and a bunch of legacy carriers whose labor costs have already been chopped as much as they possibly can be, which leaves them no place to go but up.
The expiration of the fuel hedges means Southwest will only enjoy a couple of cents advantage on CASM instead of 3 1/2 cents. An advantage is still an advantage, regardless of how you slice and dice it.
It is far too premature to predict any sort of problem for the folks with all the 737s. Others have done it many times, at their peril. Harding Lawrence told everyone who would listen that they'd be out of business in 60 days. When they survived that, he told everyone they would not last another 60 days.
When they broke out of the Texas/Wright Amendment area folks used to say that their costs would skyrocket once they started having to deal with (you pick) snowy weather up north, militant labor on the east and west coasts, higher costs for everything in California...that their low CASM was simply an aberration due to their flying solely in TX, OK, NM, LA...what many think of as "flyover country."
It's impossible to predict what will happem, but Southwest's CASM with fuel right now is less than the ex-fuel CASM of many carriers. And that is with a 600-some-odd mile average stage length whereas those legacy carriers enjoy an average stage length over 1000 miles. And yep, that makes a big difference.
We'll see what happens. But folks predicting financial catastrophe and ruin for Southwest over the past 35 years have about as good a track record as those who have predicted the 2nd coming of Christ or the next Elvis sighting.
