diverboy
Member
A man after my own heart. Bright minds think alike.mrman said:
You Guys Ought To Buy The Shuttle.....
- Thread starter ELP_WN_Psgr
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ELP_WN_Psgr
Senior
- Nov 29, 2003
- 419
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- #18
>>just wait and see. you guys think your unbeatable at wn. got anoter thing coming to you. u just pissed off the wrong airline.<<
I am interested in seeing what the plan might be.
I don't think WN or its employees are guilty of complacency nor do I think they believe themselves unbeatable. Besides, this is business, not sport.
You also have to stop and think that half the customers that go to-and-from PHL are going to be from "the other end of the route."
WN is strong at MDW, PHX, MCO, TPA, BNA, etc etc. So even if U was able to convince every single Philadelphia passenger to stay away from WN (they won't).....WN still has a pretty good shot at generating traffic from their strongholds.
U can't afford to engage WN in any sort of fare war. No cash reserves to speak of, and a requirement by the ATSB to keep a certain amount of cash on hand.
Even if U employees agreed to work for free (they won't do that either) U's costs would be greater than those over at WN.
You talked about WN having "pissed off the wrong airline". Let me suggest to you that U has spent many years pissing off the wrong passengers. If I were U, here is what I'd be afraid of.....the fact that for years, with little or no competition, I had been taking advantage of my captive markets with incredibly high fares.
Tell me it makes sense to charge folks $350-$500 or even more for a one way 200---250 mile flight to upstate NY. Those people will remember. And even if U does chop the fares, these same people will want to know why U hadn't chopped the fares to more affordable levels earlier.
Matching Southwest's fares and giving them an assigned seat is a given. Everyone expects that. And in the short term it may cause WN's loads to grow more slowly. In the big scheme of things at BWI that ultimately didn't matter.
Besides, a growing pie means bigger slices for everyone. Southwest's entry into PHL with the lowered fares which will accompany their arrival will stimulate traffic. There should be no question about it. Southwest doesn't have to carry all the passengers to make a buck.
So, instead of threatening Southwest with "Plan Nine from Crystal City and Outer Space" you ought to be trying to figure out how you can thrive carrying more passengers for less money. That's what will ultimately happen.
If U were really concerned about public good and convenience you would be working towards that goal. The end game is not to force WN out of a market then hike your fares back to "Oh My God" levels and watch passengers glock to automobiles or buses.....the goal ought to be figuring out how to provide a quality product at the fare levels which will prevail after WN's arrival.
I am interested in seeing what the plan might be.
I don't think WN or its employees are guilty of complacency nor do I think they believe themselves unbeatable. Besides, this is business, not sport.
You also have to stop and think that half the customers that go to-and-from PHL are going to be from "the other end of the route."
WN is strong at MDW, PHX, MCO, TPA, BNA, etc etc. So even if U was able to convince every single Philadelphia passenger to stay away from WN (they won't).....WN still has a pretty good shot at generating traffic from their strongholds.
U can't afford to engage WN in any sort of fare war. No cash reserves to speak of, and a requirement by the ATSB to keep a certain amount of cash on hand.
Even if U employees agreed to work for free (they won't do that either) U's costs would be greater than those over at WN.
You talked about WN having "pissed off the wrong airline". Let me suggest to you that U has spent many years pissing off the wrong passengers. If I were U, here is what I'd be afraid of.....the fact that for years, with little or no competition, I had been taking advantage of my captive markets with incredibly high fares.
Tell me it makes sense to charge folks $350-$500 or even more for a one way 200---250 mile flight to upstate NY. Those people will remember. And even if U does chop the fares, these same people will want to know why U hadn't chopped the fares to more affordable levels earlier.
Matching Southwest's fares and giving them an assigned seat is a given. Everyone expects that. And in the short term it may cause WN's loads to grow more slowly. In the big scheme of things at BWI that ultimately didn't matter.
Besides, a growing pie means bigger slices for everyone. Southwest's entry into PHL with the lowered fares which will accompany their arrival will stimulate traffic. There should be no question about it. Southwest doesn't have to carry all the passengers to make a buck.
So, instead of threatening Southwest with "Plan Nine from Crystal City and Outer Space" you ought to be trying to figure out how you can thrive carrying more passengers for less money. That's what will ultimately happen.
If U were really concerned about public good and convenience you would be working towards that goal. The end game is not to force WN out of a market then hike your fares back to "Oh My God" levels and watch passengers glock to automobiles or buses.....the goal ought to be figuring out how to provide a quality product at the fare levels which will prevail after WN's arrival.
ELP/Tx-
I think you very clearly pointed out what many people fail to "get" about Southwest's business model. It's not built upon taking passengers away from other airlines, but rather upon drawing passengers away from other modes of transportation. And, moreover, while US Airways has the market share advantage in Philadelphia, Southwest has larger market share in every single city being connected non-stop to PHL (and most that can reach PHL with a single connection).
etops1-
US Airways could have benefited tremendously from Southwest's entry into BWI *if* they had had a competitive cost structure. For example, BWI-PVD traffic increased over 800% (i.e. over 9x as much traffic year-over-year) between 3Q96 and 3Q97. WN only had 49% of that market in 3Q97, and clearly US had most of the rest. On that specific route, US Airways traffic likely increased by 300-400%! Both airlines were filling their planes, but only one had the cost structure to make money doing it.
Do you think the reason that only about 120 people fly between PVD and PHL daily is the fact that they prefer to drive/take the train, or do you think that the *average* $310 one-way fare might have something to do with it? If the traffic increase on that route looks anything like the BWI-PVD route did, US will need to run A321's and 757's to handle the demand (if they match WN's fares).
The problem is that CCY management still doesn't seem to get it, or some group of people is just unwilling to make the necessary changes to make the airline operate more efficiently. Operating hub banks at an airport like PHL is dumb, especially when management knows that O&D traffic is what makes PHL valuable to US. Replacing mainline with ERJ's, CRJ's, and EMB-170's to compete with LCC's is dumb. Why would you fly on an RJ (with no F cabin) to ATL when AirTran offers brand-new 717's with a business class cabin? And US Airways (to hear the pilots and flight attendants tell it) still hasn't been able to improve the way it schedules people (and thus pays people to sit around). Moreover, there has been little done to fix the pricing model beyond trying to penalize frequent flyers for purchasing non-refundable tickets!
Did you know that Southwest's revenue yield (fare paid per miles flown) is only about 5% lower than US Airways'? They sell a far greater percentage of their seats as modestly priced refundable tickets than US sells of its seats as full "business" fares. They dump a smaller percentage of their seats at deeply discounted fares.
WN has lower costs than US and will continue to have lower costs than US even if CCY could manage to cut costs by $500 million/year. Management needs to restructure operations, fix the pricing structure, and realize that they do not have the resources to try to kick WN out of PHL with a price war or by gumming up the operation. LUV has deeper pockets and PHL will represent < 1% of their system when it opens. UAIR needs to play to the strengths of its product (assigned seating, IFE, network, etc.), market it, and price it competitively. If the only response is a price war without fixing the fundamentals, US Airways will simply run out of money.
To go back on topic...
I agree whole-heartedly that WN could pretty much print money on the shuttle routes. Their walk-up fare between DAL and HOU (if they priced a hypothetical WN Shuttle service comparably) is lower than Acela's fares, and far lower than the current Shuttle walkup fares.
I think you very clearly pointed out what many people fail to "get" about Southwest's business model. It's not built upon taking passengers away from other airlines, but rather upon drawing passengers away from other modes of transportation. And, moreover, while US Airways has the market share advantage in Philadelphia, Southwest has larger market share in every single city being connected non-stop to PHL (and most that can reach PHL with a single connection).
etops1-
US Airways could have benefited tremendously from Southwest's entry into BWI *if* they had had a competitive cost structure. For example, BWI-PVD traffic increased over 800% (i.e. over 9x as much traffic year-over-year) between 3Q96 and 3Q97. WN only had 49% of that market in 3Q97, and clearly US had most of the rest. On that specific route, US Airways traffic likely increased by 300-400%! Both airlines were filling their planes, but only one had the cost structure to make money doing it.
Do you think the reason that only about 120 people fly between PVD and PHL daily is the fact that they prefer to drive/take the train, or do you think that the *average* $310 one-way fare might have something to do with it? If the traffic increase on that route looks anything like the BWI-PVD route did, US will need to run A321's and 757's to handle the demand (if they match WN's fares).
The problem is that CCY management still doesn't seem to get it, or some group of people is just unwilling to make the necessary changes to make the airline operate more efficiently. Operating hub banks at an airport like PHL is dumb, especially when management knows that O&D traffic is what makes PHL valuable to US. Replacing mainline with ERJ's, CRJ's, and EMB-170's to compete with LCC's is dumb. Why would you fly on an RJ (with no F cabin) to ATL when AirTran offers brand-new 717's with a business class cabin? And US Airways (to hear the pilots and flight attendants tell it) still hasn't been able to improve the way it schedules people (and thus pays people to sit around). Moreover, there has been little done to fix the pricing model beyond trying to penalize frequent flyers for purchasing non-refundable tickets!
Did you know that Southwest's revenue yield (fare paid per miles flown) is only about 5% lower than US Airways'? They sell a far greater percentage of their seats as modestly priced refundable tickets than US sells of its seats as full "business" fares. They dump a smaller percentage of their seats at deeply discounted fares.
WN has lower costs than US and will continue to have lower costs than US even if CCY could manage to cut costs by $500 million/year. Management needs to restructure operations, fix the pricing structure, and realize that they do not have the resources to try to kick WN out of PHL with a price war or by gumming up the operation. LUV has deeper pockets and PHL will represent < 1% of their system when it opens. UAIR needs to play to the strengths of its product (assigned seating, IFE, network, etc.), market it, and price it competitively. If the only response is a price war without fixing the fundamentals, US Airways will simply run out of money.
To go back on topic...
I agree whole-heartedly that WN could pretty much print money on the shuttle routes. Their walk-up fare between DAL and HOU (if they priced a hypothetical WN Shuttle service comparably) is lower than Acela's fares, and far lower than the current Shuttle walkup fares.
Piedmont4US
Member
- Jan 8, 2004
- 94
- 0
US Shuttle is now $110 walkupmga707 said:
Well, just don't forget all the fine print:Piedmont4US said:
"US Airways announced today that customers booking last minute travel now can fly for as little as $110 each way..."
and
"All fares are capacity-controlled and subject to availability. Seats are limited and are not available on some flights at peak times."
Translation:
"We've got some flights which are half-empty a lot of the time, and we'll give you a break on those because no one else wants to fly on them for what we charge otherwise."
You won't get the cheap walk-up fares at peak hours. And Acela is still less expensive.
