SWA being called PREDATORY of others' misfortune

[lowecur]

Good for them! They are doing what any other self respecting management team would do in their place.

Much of the blame for the present situation needs to be shared by the Feds. They could have designed a new air traffic system along with percentage slots at the major hubs around the country, that would have allowed competition to flourish and limited the congestion that is wasting so much fuel. There is no reason carriers needed to have the kind of control in these major markets they do. It's all about keeping the other guy out first, and then building your network second. The regional's were allowed to propagate and swamp a system that was not designed to deal with that kind of traffic.

Hubs were a good idea for connecting the small/midsize market to the rest of the country on a limited basis, but they have grown into a bee's nest on steroids. Why do cities like Syracuse, Rochester, and Buffalo need 10-20 RJ's per day going into ORD? The airlines will tell you the business traveler demands frequency. That's BS. Those cities could all do very nicely with 25% of the frequency on larger a/c. It's all about keeping the competition out, period!

Management for these airlines are reaping what they sowed, but as usual the US taxpayer will end up bailing some of them out. The nice part about that is Congressional Committees likely will be formed to oversee disbursement of funds for BK DIP and exit financing. They should and will demand available capacity for low cost carriers to many of these hubs as a condition to qualifying for financing.

imp: ​

 

[Tejas-Jet]

It wasn't capitalism that ran Braniff out of Love Field.

Ahhh-kay....tell us then....what ran Braniff out of Love Field?

And where did you get your information?

And was that person actually involved in the decision making process at Braniff?...or just some line guy, fending off all the rumours like everyone else?

You have the floor....

 

[DOVPILOT]

Yes. This is true. The part about taking advantage. If other CEOs and executives would spend more of their time securing their airline's future instead of their own we would have little to exploit.

Oh God, this is sooooooo true!!!!

 

[Andy Neill]

Who is John Galt?

You beat me to it. My thoughts exactly!

 

[CA1900]

The real advantage that SWA has, is the missconception of having low-fares.

There's more than that... I find them generally easier to deal with if my plans change. Let's pick a random city pair: MCO to PDX. I want to travel a month from now, roundtrip, say, leaving August 1, returning August 5. Best price, with no more than one stop: Delta, for $295. Southwest is $436 -- significantly more.

But here's where it gets interesting... my plans have changed, and instead of leaving on August 1, I need to leave in a week. With Southwest, my entire $436 can be applied to the new ticket, so I'm only out another $45 for the fare difference. With Delta, I'm out a $100 change fee, plus the $199 difference in fare.

Sometimes the fares are close; sometimes they aren't. But if they're close, or if there's the slightest possibility my travel plans might change, the higher fare with Southwest is sometimes cheap insurance.

 

[contrail67]

Do you think that if the rolls were reversed that everyone else would be f'ing SW? Absolutely

And when and if that time comes...they will.

 

[LowlyPropCapt]

Plus, you'd have an upside-down hamburger.

Or you would have the burger resting on the crust side of the bread with all of the ketchup and grease running out. Not very yummy looking. That would be a total disaster!

 

[Tanker Clown]

Isn't John Gault a character in Altas Shrugged?

 

[Andy Neill]

Isn't John Gault a character in Altas Shrugged?

No, but John Galt was. That's the whole point of bringing his name up. The character John Galt had no time for people who thought that the successful should share their success with the mediocre and inept. The thrust of this thread is "If SWA was managed as poorly as the other airlines, they'd be losing money too." Well....yeah, but they're not. They're succeeding because they're getting it right. More power to 'em.

 

[Tonedrvr]

why do you people not get it. if we paid more for fuel we would have higher ticket prices...why can't you understand that.

Red,
I don't understand. Isn't SWA out there to make as much money as they can for their shareholders? Or are they providing a service to the consumers out of the goodness of its heart? If they are in the money business, shouldn't SWA be making as much money as they possibly can using the supply/demand model?
I seriously doubt your company is keeping fairs low out of the goodness of its heart.
I think SWA has done a great job of marketing itself as the discount carrier even though you often charge as much as the next guy. I don't think you have the ability to just raise fairs to keep making a profit.

 

[GlobeIII]

Homonym Alert!

Sorry couldn't resist
Fairs= Cotton Candy, Crappy Country Singers, Cheesy Rides and Blue Ribbons

Fares= The cost of a ticket

 

[Poahi]

why do you people not get it. if we paid more for fuel we would have higher ticket prices...why can't you understand that.

True, but then you would have lower load factors, negative growth, lower market share and layoffs. SWA's model works because it can remain profitable with pricing power. Hedges give you that edge.

 

[Deadalus]

I say good for Southwest. Southwest is an airline that puts its employees first. Wow, what an idea. You wouldn't see Southwest aquire another airline and then standby while it's original employees got screwed now would you? I hope Southwest takes over the world. F$%@ Virgin, Delta, US Airways, Alaska, etc, etc.

 

[Whataburger]

It wasn't capitalism that ran Braniff out of Love Field.

Was it Capitalism or the American way that ran Legend out of Love Field? How'd that lawsuit turn out?

 

[Whataburger]

Sorry couldn't resist
Fairs= Cotton Candy, Crappy Country Singers, Cheesy Rides and Blue Ribbons

Fares= The cost of a ticket

Crappy Country is better than any good HipHop.

 

[donvag]

No offense to anyone on this post but I see hipocracy. In alot of ways what WN is doing to Frontier in DEN what Wal-Mart does to Middle-America or as a vulture does to a dying racoon. As pilots we justify it because we admire pilots compensation in that company and that WN has been succesful in its ventures. We usually blame the other company WN competes with as if WN has done no wrong. I disagree with that argument. WN just hits the coup de grace. It would be interesting if NOW a days they would find their OWN routes instead of flying routes to run other companies to the ground. Then again that what competition is all about. I hear regional guys hating CHQ or Skywest for doing the same thing WN does but they think WN is ok because they pay their pilots better. While I hope my current company keeps growing I would hate for the growth of my company to consist of the lay off of friends and former colleages. Just an opinion.

 

[Tanker Clown]

Well, when you build a better mouse trap....

 

[zkmayo]

No offense to anyone on this post but I see hipocracy. In alot of ways what WN is doing to Frontier in DEN what Wal-Mart does to Middle-America or as a vulture does to a dying racoon. As pilots we justify it because we admire pilots compensation in that company and that WN has been succesful in its ventures. We usually blame the other company WN competes with as if WN has done no wrong. I disagree with that argument. WN just hits the coup de grace. It would be interesting if NOW a days they would find their OWN routes instead of flying routes to run other companies to the ground. Then again that what competition is all about. I hear regional guys hating CHQ or Skywest for doing the same thing WN does but they think WN is ok because they pay their pilots better. While I hope my current company keeps growing I would hate for the growth of my company to consist of the lay off of friends and former colleages. Just an opinion.

To a certain degree, I agree, and I thought the same thing. I doubt so many pilots or posters on here would be willing to agree with WN's ability/profitability if their pilots werent among the best paid in the industry. It would be "blah,blah,blah...their building it on the backs of labor..."

 

[Tanker Clown]

One thing I think we all can agree on is that when the hedges run out and it's a level playing field, SWA will have to reduce costs to compete.

 

[Mach 80]

donvag,

Your post hints at re-regulation of airline routes.

The USA is a capitialistc country. SWA didn't "DO" anything to Frontier. Frontier could have grown in a strong profitable manner but for whatever reason it didn't and the journey down that road started before SWA started adding routes. It's a liberal left wing rant to start bashing a company for being succesful and competing well and strongly -- it's what made this country what it is today. Darwinism in business needs to continue (even though the bankruptcy laws throw a curve into it).

Are you going to lobby Congress to not allow a CVS drugstore be built within 3 miles of a Walgreen's? Is that the way you want the United States to operate?

By the way, Wal Mart has done much for this nation. Many of the people who work there would otherwise be on welfare. Many of the lower income mothers who shop there can better afford shirts and shoes for their kids whereas before WalMart they couldn't afford to clothe their children as well. People can afford to feed their familes better due to WalMart. It's made life better for people and helped far more people than harmed.

Ever hear the arguement as to who has helped more people -- Mother Teresa or Bill Gates?

The answer is Bill Gates. He caused to employ millions of people around the world providing income for people to take care of themselves and provide good medical insurance -- not just Microsoft but all the ancillary companies that arose around Microsoft such as computer manufactures. His work also improved productivity dramatically thus lowering costs for everyone -- so get the big picture and don't become some left wing liberal when it comes to how the capitalstic system in this country works. It's a tough world out there but that's the way it is and it's still far better than socialism or communism. People who lose jobs think it's the end of the world and it's certainly not fun and it is stressful -- I know -- I've been there. But history has shown those people often end up working at a stronger more secure company later. There are plenty of ex-Braniff, ex-Midway, furloughed UAL and AA at SWA and they are happier than they ever were at previous emplyers. Life does go on.
tankerclown -- SWA may not have to reduce costs. How about they raise fares instead? By then they will be more monopolistic in their markets and be able to do that to cover costs. They are keeping fares relatively low now while they can to make things difficult for the competition and solidify their markets. They can continue to do this for the next several years then if necessary start raising fares more.