Southwest's 'stealth Entry' May Target Northwest:

[a320av8r]

Southwest's 'stealth entry' may target Northwest: Less than a week after a study stating fares at Northwest's Minneapolis/St. Paul hub are among the highest in the nation, discount giant Southwest announced service to the Minnesota airport. You won't see Southwest's signature brown and orange planes in the Twin Cities, but the carrier will offer service under its code-sharing deal with ATA. As part of that deal, Southwest will put its flight number and sell seats on ATA flights on 11 routes. For example, Minneapolis passengers can now catch an ATA flight to Chicago Midway, then pick up a Southwest flight to one of 27 destinations from Midway — all on a single Southwest ticket. But Southwest's "stealth entry" into Minneapolis could make a dent in Northwest's revenue at the hub, the Minneapolis Star Tribune (free registration) reported. Southwest's alliance with ATA means there is now "another significant competitor in the Twin Cities market," said Joel Denney, analyst for Piper Jaffray. Northwest provides non-stop service to 167 destinations from the Twin Cities. Denney argues many people will accept a layover at Midway to get lower fares on Southwest. Northwest seems unfazed. "We compete on price, product and schedule with five low-cost carriers in the Twin Cities," said airline spokesman Kurt Ebenhoch. "Seventy percent of our customers have a low-cost carrier option available to them."
-USA Today

 

[firstamendment]

Northwest seems unfazed. "We compete on price, product and schedule with five low-cost carriers in the Twin Cities," said airline spokesman Kurt Ebenhoch. "Seventy percent of our customers have a low-cost carrier option available to them."
-USA Today

[post="239359"][/post]​

Sounds familar. That was US Airway's attitude from 1989 until now. Let's see..Nothing left of PSA (except employees) and the west coast, Florida, BWI? Use to have 52,000 employees..now 24,000. Had over 450 a/c..now 279. Yeah, yeah, high cost structure...they're good!! Watch your back. Americans are no longer loyal and care nothing about your product. They want cheap and I will guess your cost structure is higher than SW. WATCH YOUR BACK!!

 

[mrman]

!! Watch your back. Americans are no longer loyal and care nothing about your product. They want cheap and I will guess your cost structure is higher than SW. WATCH YOUR BACK!!

[post="239420"][/post]​

1st this is what you don't get. Americans do care about their product and thats why they choose WN, they get a reliable ontime airline, no hub connection,better coach ammenities than the mainline, no RJ, and great customer sevice including at headquarters. Try writing a letter to U and getting a reply. WN replys to every correspondance from a customer. Try getting a reservation line within 30 seconds and not being charged for the priviledge of giving U much needed revenue. It is apparent that America does value product.

 

[JetClipper]

1st this is what you don't get. Americans do care about their product and thats why they choose WN, they get a reliable ontime airline, no hub connection,better coach ammenities than the mainline, no RJ, and great customer sevice including at headquarters. Try writing a letter to U and getting a reply. WN replys to every correspondance from a customer. Try getting a reservation line within 30 seconds and not being charged for the priviledge of giving U much needed revenue. It is apparent that America does value product.

[post="240398"][/post]​

I agree with you on one thing; Americans still value product. However, that is also why I believe WN’s “stealth†entry into the MSP market will have a limited effect on NWA.

Given a reasonable difference in fares, most business travelers (and some leisure passengers) will choose nonstops over connecting service. More time at your destination (or home) and less hassle enroute are powerful incentives.

That being said, I believe Delta’s recent fare action will have a far more negative effect on NWA, as the fares it can charge in any market have been effectively “capped†by DL. Passengers will still be willing to pay a premium for convenient, nonstop service, but the “base†on which that premium is added is now limited to DL’s fare for that particular origin/destination.

 

[ITRADE]

Interesting point that I had not thought about. MSP really is now opened up if the code-share pricing does flow though....

Hmmm....

 

[coolflyingfool]

I hardly believe that a total of aproximately 1250 seats a day on a code-sharing basis is going to have an affect on NWA. SWA will not grow in MSP so I think NWA is safe and I don't even look for them to respond. This way NWA can say to any regulators that everyone has an option out of MSP, that way NWA can continue to grow there. Just my thoughts.......

 

[Whadayano]

NWA can ignore 1250 seats a day to Midway--but then add seats over Cincinnati (Delta) and Cleveland (CAL) and SLC (DAL) to the W. Coast, and soon you're talking real capacity that NWA has acknowledged is hurting big, or they wouldn't have lashed out at DAL the way they did when DAL put in their price changes. They have to match in the flow markets, and if that means the differentials with the non-stops get too big, then they'll have to bring those down too or bleed traffic. Not a pretty picture, any way you look at it.

 

[ITRADE]

Doesnt matter how many seats are available, its the fact that the fare is in the system to disrupt the revenue streams.

You could have 10 seats available, but if your fares are all $99, the competition is usually going to have to match.

 

[Whadayano]

Doesnt matter how many seats are available, its the fact that the fare is in the system to disrupt the revenue streams.

You could have 10 seats available, but if your fares are all $99, the competition is usually going to have to match.

[post="240908"][/post]​

Naah, that's not the way it works in the real world. If someone has very limited capacity of cheap seats you "match," yeah, but onlywith the minimum seats you can get away with, once yours and the competitors are filled prices jump to the next bucket. Although in the case of NWA that's not been the way they do it with new competitors--one reason they are so relatively untouched is that they are brutal when it comes to competitive response. When someone comes in they upguage and put a 757 on either side of the newbie--1 20 minutes before and another 15 minutes after, say. And they open the buckets wide up, at $5 less than the newbie. And newbie, whose come into what was a 5 DC-9 trip a day market with one RT 737, finds NWA is now at 4 DC-9 and 4 757's a day. Newbie cries to the DOJ, "unfair!" But the DOJ does nothing and newbie airline goes to somewhere more profitable/less awful. And within 4-6 months NWA is back to 5 DC-9's a day.

 

[markkus757]

I think the only thing limiting this excursion is how ATA handles the flights. There are plenty of loyal WN customers that will conveniently hop onboard as long as they are treated similarly to what WN does. If ATA has their act together they will have big brother there to help fend off NW and their attempts at getting rid of the excursion.

 

[PacificNWflyer]

I think Northwest will have to pay attention to WN, but they do offer a slightly different product. There are a lot of people who just want cheap fares, but then there are still a number of people, like me, who like the perks of Platinum status, World Clubs, and upgrades. I feel with some of the new fares that I would even purchase a first class ticket as my income grows. WN just doesn't offer that product. Going to LAX means lines on WN out to the next terminal, and I will never deal well with that.

Besides, MSP will still serve as the hub for NW for people coming from other cities which will enable them to fill planes. And they have a very nice WorldClub on C-concourse with a very nice airport for a stopover.