I think Boyd pretty much sums up SWAs strategy regarding DEN and not going to MSP/ATL. "[FONT=Tahoma, Verdana, Lucida]
go after the easy meat[/FONT]"
http://www.aviationplanning.com/asrc1.htm
[FONT=Tahoma, Ariel, Lucida]Yes, Even Southwest's Cutting Back
Less Capacity. But Not Zero Capacity[/FONT]
[FONT=Tahoma, Verdana, Lucida]Thinning. Pruning. But not cutting the tree down.[/FONT]
[FONT=Tahoma, Verdana, Lucida]That describes fall schedules. With a couple of exceptions, carriers are reducing market capacity, not eliminating it entirely. But the misconceptions are still being hyped: The first is that comprehensive network ("legacy") carriers are supposedly abandoning major markets wholesale. They're not. [/FONT]
[FONT=Tahoma, Verdana, Lucida]The second is that Southwest is expanding into the alleged gaps left open as legacies retreat. They aren't. To start with, there are only a couple such opportunities. Furthermore, it's more than clear that Southwest's main strategy is maximizing revenue - not wild expansion. [/FONT]
[FONT=Tahoma, Verdana, Lucida]Airports:USA has analyzed Southwest's current weekly schedules, comparing them to schedules filed for November. At this point, they are trimming, not adding capacity.[/FONT]
[FONT=Tahoma, Verdana, Lucida]At Southwest, both system departures and system seat capacity are being pulled down by almost 3%, which runs entirely counter to what some of the Wall Street types have been blindly predicting. [/FONT]
[FONT=Tahoma, Verdana, Lucida]Southwest: Managing & Shifting, Not Adding.[/FONT][FONT=Tahoma, Verdana, Lucida] What does become obvious from the Airports:USA analysis, however, is Southwest's strategy is to redeploy assets from its strongest and safest markets. Main goal: to mount a full-scale assault on Denver. [/FONT]
[FONT=Tahoma, Verdana, Lucida]In point of fact, Denver is the only airport that will see any major increases in WN service - 171 more flights per week. Fort Lauderdale is a distant second with less than a fifth of that number. Tellingly, three-fourths of Southwest's cities will see cuts in WN departures. Only ten - count them, 10, will get increases - and the vast majority of of this capacity shift will be at Denver.[/FONT]
[FONT=Tahoma, Verdana, Lucida]In fact, of Southwest's top 20 markets, all but one are seeing departure cuts. The one exception is Denver. [/FONT]
[FONT=Tahoma, Verdana, Lucida]Message: Southwest is managing its route system, not leaping into the non-existent service voids that some in the media have been reporting about, based mostly upon lore, not facts.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Message: The gauntlet has been thrown. Southwest wants to be the big dog at Denver, which makes tactical sense. The dominant carrier, United, has been strategically wallowing like a dinosaur in a tar pit, and apparently has no long-term direction whatsoever. The second carrier, Frontier, is "in Chapter." [/FONT]
[FONT=Tahoma, Verdana, Lucida]Actually, Consistent With Traditional WN Strategy.[/FONT][FONT=Tahoma, Verdana, Lucida] Southwest's expansion at Denver is, paradoxically, entirely consistent with one of its several traditional expansion strategies: go after the easy meat. [/FONT]
[FONT=Tahoma, Verdana, Lucida]With the current status of the two main home teams - United and Frontier - Denver can appear to be a lot easier to gain market share than, say, Atlanta or Minneapolis/St.Paul. That doesn't mean that either competitor will give up easily - particularly Frontier - but both are wounded. United is directionally clueless, and Frontier is trying to emerge from bankruptcy.[/FONT]
[FONT=Tahoma, Verdana, Lucida]
Comprehensive Network Carriers Are Adjusting, Too.[/FONT][FONT=Tahoma, Verdana, Lucida]
An Airports:USA review of other carriers' scheduling plans at their hubsites clearly show adjustment to capacity. The 7 nonstops to LGA may drop to 5. United and American are cutting literally one third of their capacity between DEN and ORD - but the sky will still be full of airliners on the route. This generally will tend to cut operational costs as well. These bankruptcies that some are predicting aren't in the cards - CNCs can adjust the cost/revenue mix in 2008 - 2009.[/FONT]