Sw's Master Strategy

[KCFlyer]

KCFlyer, I have no problem with Southwest adding capacity to the airline system.

I DO have a problem when Southwest's management moans and groans about over capacity...When they are obviously adding to the problem that they are whining about. I would think this would be common sense to most people..

[post="274426"][/post]​

What Southwest's managment is "maining and groaning" about is that the capitalistic system isn't working as it was designed to. That system pretty much believes in "survival of the fittest". What we have is "Chapter 11 bankruptcy" that is not only being used...it's being abused. And if the capitalistic system were allowed to function as intended, there wouldn't be any overcapacity in the system. Indeed, the airlines who haven't sought protection of the bankruptcy courts would all be far healthier than they are. Especially when it's the bankrupt carriers who are prettying up load factor numbers at the expense of profitable airfares.

 

[insp89]

What Southwest's managment is "maining and groaning" about is that the capitalistic system isn't working as it was designed to.  That system pretty much believes in "survival of the fittest".  What we have is "Chapter 11 bankruptcy" that is not only being used...it's being abused.  And if the capitalistic system were allowed to function as intended, there wouldn't be any overcapacity in the system.  Indeed, the airlines who haven't sought protection of the bankruptcy courts would all be far healthier than they are.  Especially when it's the bankrupt carriers who are prettying up load factor numbers at the expense of profitable airfares.

[post="274467"][/post]​

What you are proposing is that instead of allowing airlines the right to reorganize "thru Chapter 11 bankrupcy" these airlines should just be destined to the land of liquidation...

The problem with this scenerio, is that eventually there would be only 1 huge airline...There can be only one airline that is the "fittest", Right ?

While there is no doubt that the bankrupcy laws in this country need a major overhaul, It would be foolish not to give companies the opportunity to whip themselves into competive shape..

There is no doubt in Usairway's case, that it has suffered with the most patethic excuse for management during the last 15 yrs.

But with that said, the Major reason the airline industry is in such a sorry state today, is due to Southwest's ability to "set" the fares due to their management's wise decision to Hedge Fuel. While other carriers decided to "pay as you go"..

This situation will not last forever. [Depending on what the price of Oil will be].

The capitalistic system that you speak of is based on competition. Looks like some are getting a little concerned as time marches on and the playing field is leveling.

 

[KCFlyer]

What you are proposing is that instead of allowing airlines the right to reorganize "thru Chapter 11 bankrupcy" these airlines should just be destined to the land of liquidation...

That's pretty much my point

The problem with this scenerio, is that eventually there would be only 1 huge airline...There can be only one airline that is the "fittest", Right ?

Not at all. However, instead of two airlines in bankruptcy and 3 airlines near bankruptcy, those 3 airlines near bankruptcy would be considerably healthier by meeting the demand, however reduced it might be (overcapacity-remember). Right now, the airlines in bankruptcy are dragging down the rest of the industry. If you have gangrene in your foot, if you try too hard to save the foot, you'll kill the body. If you cut off the foot, the rest of the body will survive...and adapt.

But with that said, the Major reason the airline industry is in such a sorry state today, is due to Southwest's ability to "set" the fares due to their management's wise decision to Hedge Fuel. While other carriers decided to "pay as you go"..

Actually, The bankrupt airlines are pretty adept at undercutting Southwest's fares in order to attract customers (Southwest usually isn't the lowest fare available in a market) and protect their market share.

The capitalistic system that you speak of is based on competition. Looks like some are getting a little concerned as time marches on and the playing field is leveling.

In the case of the airlines, "leveling the playing field" is sort of like the non-bankrupt airlines sending the first string offensive line out on the field, even though they've all got broken legs. That's sort of what the liberal use of bankruptcy court is doing....not just to Southwest, but to American, Northwest, Delta, and Continental to name a few.

 

[insp89]

That's pretty much my point

Not at all. However, instead of two airlines in bankruptcy and 3 airlines near bankruptcy, those 3 airlines near bankruptcy would be considerably healthier by meeting the demand, however reduced it might be (overcapacity-remember). Right now, the airlines in bankruptcy are dragging down the rest of the industry. If you have gangrene in your foot, if you try too hard to save the foot, you'll kill the body. If you cut off the foot, the rest of the body will survive...and adapt.

Actually, The bankrupt airlines are pretty adept at undercutting Southwest's fares in order to attract customers (Southwest usually isn't the lowest fare available in a market) and protect their market share.
In the case of the airlines, "leveling the playing field" is sort of like the non-bankrupt airlines sending the first string offensive line out on the field, even though they've all got broken legs. That's sort of what the liberal use of bankruptcy court is doing....not just to Southwest, but to American, Northwest, Delta, and Continental to name a few.

[post="274500"][/post]​

KC, I got some bad news for you, I do not see the bankrupcy laws changing anytime soon.

Don't know if you noticed, the whole airline industry is much more competitive today due to the bankrupcy laws. [Some carriers are actually in Charter 11, while others merely threaten to file to get the concessions they want].

I noticed that you mentioned Continential Airlines in your funny little football story at the end of your post. If memory serves me, Didn't Continential make use of the bankrupcy courts [ not once, but twice ?]

It's going to be interesting how things turn out when the fuel hedging advantage erodes.
Darn those people at Usairways and AmericaWest ! They just won't go away.

Keep those football and surgical stories coming. Very entertaining.

 

[KCFlyer]

KC, I got some bad news for you, I do not see the bankrupcy laws changing anytime soon.

Don't know if you noticed, the whole airline industry is much more competitive today due to the bankrupcy laws. [Some carriers are actually in Charter 11, while others merely threaten to file to get the concessions they want].

Competitive?...The fact that they filed bankruptcy pretty much demonstrated that they couldn't compete. If by competitive you mean a 'race to the lowest' in employee pay and benefits, then by all means, the bankrupt carriers are Super Bowl contenders. Maybe Hollywood will do a remake of "It's a Wonderful Life" this year, and show George Bailey, a pilot (or mechaninc, ramper, or agent) for American how his life would be different if the bankruptcy laws weren't quite so liberal.

I noticed that you mentioned Continential Airlines in your funny little football story at the end of your post. If memory serves me, Didn't Continential make use of the bankrupcy courts [ not once, but twice ?]

Yeah...I really thought long and hard about including CO in the list. But I figure I'm pissing off enough folks already, but what the hell...yeah - CO should have failed. Maybe then US might have been strengthened a bit...ya think?

It's going to be interesting how things turn out when the fuel hedging advantage erodes.

Yes, it will be. I guess they'll most likely come up with some other "unfair" method of keeping costs low without resorting to cutting pay and benefits to Walmart levels.

Darn those people at Usairways and AmericaWest ! They just won't go away.

It's still a bit early in the game. Personally, I think the merger will put more of a strain on AWA than they think - and pretty soon THEY will be "leveling the playing field (again) in bankruptcy court for their second....and US's THIRD bankruptcy.

Keep those football and surgical stories coming. Very entertaining.

Glad you like them.

 

[insp89]

Competitive?...The fact that they filed bankruptcy pretty much demonstrated that they couldn't compete. If by competitive you mean a 'race to the lowest' in employee pay and benefits, then by all means, the bankrupt carriers are Super Bowl contenders. Maybe Hollywood will do a remake of "It's a Wonderful Life" this year, and show George Bailey, a pilot (or mechaninc, ramper, or agent) for American how his life would be different if the bankruptcy laws weren't quite so liberal.
Yeah...I really thought long and hard about including CO in the list. But I figure I'm pissing off enough folks already, but what the hell...yeah - CO should have failed. Maybe then US might have been strengthened a bit...ya think?
Yes, it will be. I guess they'll most likely come up with some other "unfair" method of keeping costs low without resorting to cutting pay and benefits to Walmart levels.
It's still a bit early in the game. Personally, I think the merger will put more of a strain on AWA than they think - and pretty soon THEY will be "leveling the playing field (again) in bankruptcy court for their second....and US's THIRD bankruptcy.
Glad you like them.

[post="274574"][/post]​

KC, You kinda disappointed me with your comments on fuel hedging. [the rest of your post is just the same ole , same ole..Nice stories though], I believe there is nothing unfair about fuel hedging, just good management, [Something that is woefully missing at Usairways, [right now]. The sad part is you can't count on Hedges forever.
If I were a stockholder in Southwest, I also would be concerned about competing with other carriers when the fuel hedges lose their luster..

Survival of the Fittest, The world according to KC..=One world Airline, One World Government, One World Oil Company..etc...etc...Yeah, Great

 

[KCFlyer]

KC, You kinda disappointed me with your comments on fuel hedging. [the rest of your post is just the same ole , same ole..Nice stories though], I believe there is nothing unfair about fuel hedging, just good management, [Something that is woefully missing at Usairways, [right now]. The sad part is you can't count on Hedges forever.
If I were a stockholder in Southwest, I also would be concerned about competing with other carriers when the fuel hedges lose their luster..

Survival of the Fittest, The world according to KC..=One world Airline, One World Government, One World Oil Company..etc...etc...Yeah, Great

[post="274579"][/post]​

You point out good management. My point is that I really doubt that management at SWA is sitting back, slapping themselves on the back about the fuel hedges. I sort of like to believe that they are still actively looking for future cost savings - keeping employee pay and benefits cuts as a very last resort. As a matter of fact, I'd kind of like to believe that they listen to ideas submitted by the lowly employees for cost savings ideas...and more than that, they implement some of them.

What strikes me as odd is that for so long, SWA has been blasted as "lowering the bar" for the industry. Now, bankrupt carriers are REALLY lowering the bar for the rest of the industry...and taking some sort of perverse pride in that - look at your "wait til the fuel hedges run out" comments.

I don't doubt that Parker at AWA is a far sight better at running an airline than any past US managment - but I still think he's taking a huge risk with this merger. Pardon me for sounding heartless, but I think he'd have been better off letting US fold, then being first in line to take what he REALLY wants - without the added debt and headaches that a merger will bring.

You take my views to a bit of an extreme...you make it sound as though the only solution of the free market is ONE airline...ONE world government...ONE World oil company... But I look out there and see Shell and BP and Exxon all making pretty good profits and competeing. I see Honda and Toyota competing with the likes of Hyundai and Kia, Ford and GM. I see Sprint competing with AT&T. I see T-Mobile and Verizon and Cingular all holding their own...why does "survival of the fittest" in the airline industry mean ONE airline?

It's like Hertz and Avis...Avis is and has been number 2 for years. They had a slogan - "We try harder" for years. Are you saying that since they can't unseat number one Hertz that they should just throw in the towel? The free market welcomes competition - on a playing field that doesn't need "leveling" help from the bankruptcy courts. I'm saying that the market has a place for a number 2 (or 3 or 4) player...if they make profits, that's great - it helps keep number one on their toes.

 

[insp89]

KC, there is no "perverse" pride concerning fuel hedging. Just the reality of the situation..

How would Parker "get first in line" if Usairways folded ?

I noticed that you do see competition as a good thing. Why are you against giving companies the opportunity to get their act together to GET competitive ?

 

[KCFlyer]

KC, there is no "perverse" pride concerning fuel hedging. Just the reality of the situation..

How would Parker "get first in line" if Usairways folded ?

I noticed that you do see competition as a good thing. Why are you against giving companies the opportunity to get their act together to GET competitive ?

[post="274592"][/post]​

Because American, Northwest, and Delta are trying to get their acts together and GET competitive WITHOUT making the trip to bankruptcy court. Competition IS good - trying to compete with companies "getting their act together" (round 2) is not.

 

[a320av8r]

If, if, if...

Go back to the beginning of deregulation.
If American didn't buy Eastern's South American assets they would probably have stayed in Texas and SW wouldn't have gotten started.
If Delta hadn't bought Western, Piedmont would have (they were only a day behind DL) and SW wouldn't have grown on the west coast.
If TWA had failed instead of BK then they wouldn't have tried to buy USAir, who in turn bought Piedmont, to become too big for Icahn (TWA) to take over.
If Piedmont had continued to grow SW would probably not be here today.
So if it weren't for bankruptcy protection YOU wouldn't be here.

How's that for convoluted :blink: .

 

[corl737]

If, if, if...

[post="274610"][/post]​

If competing airlines hadn't gone to court to delay Air Southwest (WN's original name) startup in 1967 they would:
1) have been flying old Lockheed Electra turboprops. Boeing cut a great deal on three idle 737 jets in '71 allowing SWA to begin as an "all-jet" airline. And
2) would have been a party to the provisions of the 1968 Dallas-Ft Worth Concurrent Bond Ordinance requiring signatories to abandon Dallas Love Field operations when Dallas-Ft Worth International opened in '73.

Thus, Southwest owes its success to the actions of other air carriers . By fighting to avoid competition they indirectly created the world's most efficient and profitable airline.

Always, always be careful what you ask for.

 

[Swaplt]

If competing airlines hadn't gone to court to delay Air Southwest (WN's original name) startup in 1967 they would:
1) have been flying old Lockheed Electra turboprops. Boeing cut a great deal on three idle 737 jets in '71 allowing SWA to begin as an "all-jet" airline. And
2) would have been a party to the provisions of the 1968 Dallas-Ft Worth Concurrent Bond Ordinance requiring signatories to abandon Dallas Love Field operations when Dallas-Ft Worth International opened in '73.

Thus, Southwest owes its success to the actions of other air carriers . By fighting to avoid competition they indirectly created the world's most efficient and profitable airline.

Always, always be careful what you ask for.

[post="276966"][/post]​

.....Corl,, good to see you here!! Welcome aboard! (My first day too.)

Tom F.

 

[mga707]

If competing airlines hadn't gone to court to delay Air Southwest (WN's original name) startup in 1967 they would:
1) have been flying old Lockheed Electra turboprops. Boeing cut a great deal on three idle 737 jets in '71 allowing SWA to begin as an "all-jet" airline.

Of course, 'old' is relative: The US carriers that were busy trying to unload their Electra fleets in that 1967-70 time frame--American, Braniff, National, Northwest, PSA, and Western (Eastern was still hanging on to most of theirs)--were all getting rid of fairly low-time aircraft that were only eight to ten years old (1958-61 delivery dates)! They just SEEMED old when compared to the new DC-9/727/737 aircraft that were replacing them.

Always, always be careful what you ask for.

Got THAT right!

 

[luvn737s]

I'm sure the HP folks will remember their day in the sun...where their company "saved" a bankrupt carrier, and then the bankrupt carriers employees took their jobs.

[post="273887"][/post]​

Perhaps the NewU won't inflict any damage on today's WN, but WN had better be content with what it has now in terms of breadth of service. I think WN will find many doors to future expansion (Carib, Mex, any US city they don't currently serve, etc. ) slammed shut.

It looks like that pesky little gnat from Phoenix is going to grow into a big blue, grey and red swarm.

 

[corl737]

It looks like that pesky little gnat from Phoenix is going to grow into a big blue, grey and red swarm.

[post="277531"][/post]​

Ok, I'll mark my calendar to note that this is the day of the "big prediction." As of today, June 16, 2005, there is NO "new US Air" anywhere but on a piece of paper sitting on a judge's desk.

If the merger (or whatever that messy joiniing of disfunctional airline entities can be called) does happen don't be surprised if your insect-inspired vision is met by an exterminator wearing a canyon blue hat.

As always, I wish every airline and every airline employee well ... just not too well!