That book was written before JetBlue, Skybus and VA existed. Plus, Air Tran, Spirit, Frontier and even Alaska were much smaller operations at that time. The competitive landscape is very different now.
Going forward, you will have many LCCs searching for growth (with no growth, stock prices will dive) with considerable pressure on yields from the upstarts. Have you seen how many airplanes SWA, Air Tran, VA, Jet Blue and Spirit have on order over the next year or two? That's a huge amount of capacity searching for growth. Meanwhile, you have the incumbants like Delta, UAL, AA, CAL and now NWA (leaving Chap 11 much stronger) who won't just lie down and die - they will fight to maintain market share. These legacies will continue to expand the use of lower-cost 70-90 seat RJs (these did not exist when NUTS was written). You see this with Delta using E170s and putting them on competing Air Tran routes - the E170s are just as comfortable for pax and yet the pax have access to Delta's worldwide route structure. Watch as Delta eventually adds lower-cost E190s (in addition to the growing stable of E170s and CR9s) and deploys them on competing Air Tran, SWA and Jet Blue routes all over the country (I presume the Delta pilots on the E190s will be paid wages similar to those paid the Delta Express 737-200 pilots pre-9/11).
The point is that the LCCs will increasingly compete with each other on overlapping routes while they search for growth and places to put their new capacity. Yields can not be maintained forever on increasingly competitive routes and profits will likely suffer - that's just logical. Watch what will happen in SFO as VA ramps up while SWA and Jet Blue enter that market to cut it off. That should be fun to watch - I doubt UAL will sit there and watch the battle without ensuring it maintains its diminishing piece of the domestic pie.
Boyd can knock Skybus and VA all he wants, but remember that Jet Blue was also very well funded years ago and its viability was called into question then too - you never know in this business... Fuel prices (and the ability to hedge fuel effectively) and currency exchange rates will continue to play a role for all airlines - nobody is immune including SWA. SWA's lack of IFE and its cattle-car boarding with unassigned seats won't help its cause either.
Bottom line, I don't think SWA will ever be hurt significantly, but it will no longer have the freedom to develop markets over time and its profit margins will likely not be as fat in the future - there are too many LCCs scrapping for its core market and the Legacies are deploying lower-cost 70-90 seat RJs to maintain market share and preserve international feed. Stock analysts will continue to look for growth and profitable LCC routes/markets will continue to attract competition with growing fleets and few good places to put those expensive airplanes... Should be interesting to watch.
That's my $0.02.
Again, Netjets/NJI would be a safer bet than a lot of these 121 carriers in my opinion. Netjets will always have wealthy customers willing to throw money around and it is the leader in its market by a very wide margin. I don't fly for Netjets, but if I didn't have my current gig I would certainly look into it.
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