The Parrots Are At It Again:Low Fare Airlines Will Dominate The World

[JFK777]

KCFLYER,

SW may not want to own a market but the JETBLUE formula of being based at an airport(JFK) accessible to over 10 million people and offer service to the most popular domestic routes is a good plan. I think JetBlue will have other JFK sized operations in the future. FLL, LGB and IAD I think will be large focus cites for JetBLUE. SW is a series of regional airlines flying under one name. In florida it is one thing, another in Texas, another in Nashville and then Las Vegas, PhX and the west coast. It is very hard to fly one one region of SW to another. How do you connect? At least JetBlue, at JFK you can connect all through there network. SW could fly from the DFW airport but unless it was going to have 200 flights, in total, a day with hourly service to ORD, New York, LAX, SFO, MIA and BOS then itreally would hurt AA. Look at what happened in Miami in the early 1990's when AA arrived, it raised the bar of expectation.

 

[JS]

Originally posted by KCFlyer: JFK777 - Want to make AA's day? Just let SWA announce that they are leasing a couple of gates at DFW to serve LA, Chicago, Baltimore, and Oakland. Southwest never sets out to own any market. ISP is a good example. Last I checked, Long Island had a prett decent sized poplation base. Maybe it's not New York City, and maybe they won't get people who won't want to put up with the hassle of getting out there (which strikes me as odd in a city where a large number of folks take the train to get to work, but wouldn't consider taking a train to Long Island to save a few bucks) but they'll get enough folks who want to fly out of there. And one has to wonder if ISP wouldn't be even bigger if JetBlue were not in the picture, offering low fares from convenient JFK. SWA stopped service into SFO because the delays caused by the airport design were impacting their flights down the line. But OAK is just about the same distance from downtown San Fran as SFO is, and it isn't subject to the same delays that SFO gets.

Hi, KC. Two points:

1. Until recently, it probably was a good idea for WN to stay away from DFW. Now, with AA hemorraging red ink and acting like a discount airline, and with turn times increasing across Southwest's entire system (for security), maybe DFW isn't such a bad idea after all, relatively speaking.

2. Most people in NYC who take the train to work don't spend 60 to 80 minutes on the train. That's how long it takes from a NYC LIRR station to Islip, plus A) getting to the LIRR station to begin with; B) an idiotically short but necessary taxi ride at ISP; and C) LIRR frequency, which is OK most of the time, but is three *hours* if you arrive ISP in the late afternoon (pretty common time to come back from a trip). With JetBlue at JFK and Spirit, ATA, and AirTran at LGA, there is no need to go from the city all the way out to ISP.

 

[Busdrvr]

[blockquote]
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On 10/17/2002 6:33:37 PM JFK777 wrote:

KCFLYER,

At least JetBlue, at JFK you can connect all through there network.
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[/blockquote]

SLC to DEN via JFK? HARDLY!!

 

[mga707]

[blockquote]
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On 10/17/2002 8:31:27 AM JFK777 wrote:

MR. MAN,

SW served SFO but stopped, it serves Oakland, not a great substitute. [/blockquote]

The millions who live in the East Bay area (more than live on the SFO side of the bay, BTW) would beg to differ...

 

[Bob Owens]

MileHighGuy;
Where is Laker Airlines?
If all consumers strictly made purchases based on price there would only be Yugos on the road.
Right now times are hard, the airlines have to adapt but this change is no more permanent than it was in the Eighties when Laker came on the scene.

 

[N421LV]

I think there are quite a few airline analysts and CEOs who would differ with your assertion of how temporary the changes we are seeing in the airline biz will be.

 

[KCFlyer]

[P]JS, my point on ISP is that SWA doesn't feel the need to capture the NYC market. The population of Long Island is fairly significant, is it not?[/P]

 

[KCFlyer]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 10/17/2002 6:33:37 PM JFK777 wrote:
[P]KCFLYER,[BR][BR] SW is a series of regional airlines flying under one name. In florida it is one thing, another in Texas, another in Nashville and then Las Vegas, PhX and the west coast It is very hard to fly one one region of SW to another. How do you connect?[/P]----------------[/BLOCKQUOTE]
[P]Hmmm...[/P]
[P]Change planes I guess...SWA has a buncha nonstops, or one stops with no change, or for those who miss the hub experience, they can actually change planes in cities like BNA,STL,MCI,SLC,PHX,MDW etc. [/P]
[P]MCO-MCI-SEA pretty much gets Florida, the midwest and the west coast...all without changing planes[/P]
[P]From what I heard today, BWI-SJC will connect the eastern region and western region. [/P]
[P]And on Jetblue, how exactly does one get to Kansas City? There is a great big area between the Atlantic and Pacific oceans that JetBlue calls flyover country...Southwest I guess calls it their midwest region Y'all should drop in sometime, it's actually kind of nice here. [/P]

 

[Tango-Bravo]

[blockquote]
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On 10/16/2002 1156 AM AirplaneFan wrote:

[FONT size=2]


A comment from Mr. Boyd. Now we always have to remember that he is a paid consultant who will spin his words and results to whomever is paying the bill.[/P]


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[/blockquote]


Excellent observation. My immediate thought while reading what Mr. Boyd had to say about the state of the full-service majors was the same. To me, the real parrot is Mr. Boyd, falling into line for the worn out game of he who pays the piper calls the tune.

The consensus among objective consultants and expert analysts overwhelmingly tells us what the real-world results shout at us:

The business model under which the full-service majors operate is no longer viable.

Even if Southwest, jetBlue, AirTran, ATA and Frontier were to disappear tomorrow, the malaise (nearing meltdown) of the full-service majors would continue unmitigated IMO, due to the fact that their business plan for short- to medium-haul service (up to 5 hours flight time) is utterly dysfunctional and, therefore, unviable in and of itself regardless of low-fare competition or the lack thereof.

There simply isn't enough high-yield business to support the excesses and follies of even one of the Big Six cartel airlines -- and there never will be, regardless of consolidation and market manipulation schemes they have in mind (the current surrogates of choice for these futile machinations are code-shares and alliances).

Or to quote the succinct words of Michael O'Leary (Ryanair CEO), the full-service major airlines are stupid businesses. I.e., (in my words) the full-service majors are collapsing under their own weight rather than the onslaught of low-cost, common-sense driven competitors who are simply responding to market realities while the full-service majors expend an inordinate amount of their time contriving strawman scapegoats for their record losses.

Attention employees of US, UA, AA, DL, NW and CO: the real threat to your paychecks is not WN, B6, FL, TZ or F9 (or even all of the above). The real threat to your paychecks comes from your own management who have yet to wake up and deal with the real world that has been unfolding around them for some 20 years -- while parroting the mantra that labor is to blame for the industry's woes.

 

[DLFlyer31]

[blockquote]
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On 10/18/2002 1203 PM Tango-Bravo wrote:

The business model under which the full-service majors operate is no longer viable.

Even if Southwest, jetBlue, AirTran, ATA and Frontier were to disappear tomorrow, the malaise (nearing meltdown) of the full-service majors would continue unmitigated IMO, due to the fact that their business plan for short- to medium-haul service (up to 5 hours flight time) is utterly dysfunctional and, therefore, unviable in and of itself regardless of low-fare competition or the lack thereof.

There simply isn't enough "high-yield" business to support the excesses and follies of even one of the Big Six cartel airlines -- and there never will be, regardless of consolidation and market manipulation schemes (the current surrogates for these futile machinations are code-shares and alliances) they have in mind.
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[/blockquote]

Not true in the least bit. Trust me, if UA and US disappeared tomorrow, the remaining carriers would snap back to profitability very fast. Yields don't have to rise that much for the airlines to be profitable again. Both CO and NW are already pretty close already.

If you read what Boyd is saying (and its obvious you didn't), he's arguing that the hub-and-spoke model still works. He's NOT arguing that the airlines pricing schemes work....they don't. However, the hub-and-spoke model does work and even many low-fare carriers are adopting it...ATA,Airtran and FRNT.
Even venerable WN is leaning more and more toward hub operations....BWI being the prime example.

The pricing schemes and costs structure of the majors are broken and must be fixed. The hub-and-spoke model still works.

 

[KCFlyer]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 10/18/2002 4:09:54 PM DLFlyer31 wrote:
[P]
[BLOCKQUOTE][BR]Even venerable WN is leaning more and more toward hub operations....BWI being the prime example.[BR][BR]The pricing schemes and costs structure of the majors are broken and must be fixed.  The hub-and-spoke model still works. [BR][BR][BR][/BLOCKQUOTE]
[P][/P]----------------[/BLOCKQUOTE]
[P]The main difference in WN's BWI operation is that they don't wait for 3/4's of their fleet to show up at the same time to accommodate massive connections. [/P]

 

[kirkpatrick]

[blockquote]
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On 10/18/2002 6:07:56 PM KCFlyer wrote:

The main difference in WN's BWI operation is that they don't wait for 3/4's of their fleet to show up at the same time to accommodate massive connections.
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[/blockquote]

AA is in the process of depeaking its hubs and is making great claims as to the increases in efficiency, on time performance, freeing up the equivalent of 17 aircraft, etc. I can't help but wonder why the hubs were ever peaked in the first place.

MK

 

[WXGuesser]

And some of the hub-and-spoke carriers are depeaking their hubs...

Listen, both models work to a level. Point-to-point carriers will never fly to the smaller markets or internationally, or even to Hawaii I would bet. Hub-and-spokes will never be as efficient as point-to-point. Both work. Each has advantages and disadvantages.

The pricing structure of the majors is broken; eventually they will fix it, one way or the other.

Right now, there are too many dogs fighting over too little food... what dog is going to lose the fight is the question.

Peace!

 

[grndproxwarning]

GREED!!!!!

 

[mga707]

[blockquote]
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On 10/18/2002 10:02:52 PM WXGuesser wrote:

Right now, there are too many dogs fighting over too little food... what dog is going to lose the fight is the question.

Peace!

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[/blockquote]

Right at the depth of the previous industry downturn, circa 1991-92, I distinctly recall some self-appointed 'expert' declaring that the then-seven major domestic 'full service' carriers were, in fact, two too many for the market as a whole.

Well, one is now gone (TW). Who knows, maybe if one more bites the dust profits will return and he'll have been proven right after all...