61 of 73 new markets lose money for SWA

[Lampshade]

http://yahoo.reuters.com/news/artic...5-29_14-31-42_BNG251594&type=comktNews&rpc=44

 

[General Lee]

Atleast LBB, AMA, and MAF are winners. Nobody else wants to go in there with mainline aircraft. Congrats!

Bye Bye--General Lee

 

[learherkjay]

um, we don't serve 73 markets and we have only added 5 or 6 markets since 2003 - somebody doesn't know what they are talking about

 

[Lampshade]

I think they are talking about city pairs not cities.

 

[lowecur]

um, we don't serve 73 markets and we have only added 5 or 6 markets since 2003 - somebody doesn't know what they are talking about

Should have been new routes:


McAdoo wrote in a research report that Southwest's growth model may not be working anymore. He wrote that most of the new markets Southwest has added since early 2003 have been consistently losing money, and the carrier is depending on profits from its West Coast and Texas routes to support the rest of the system.

While Southwest has added new flights and built revenue, its profits --and stock -- have been growing more slowly, he said.
"Until Southwest takes actions to make the last four year's new flights profitable, or exits some of these markets, or substantially slows the growth, we see little hope that the shares will do other than they have over the past four years," McAdoo wrote. "Our new rating reflects our feeling that there is no reason to own the shares until we see a new direction."

I've heard Neeleman has called Herb and said there are no hard feelings. He reiterated that had his suggestions been taken seriously...SWA would not be in the predicament they are in today. Didn't DL buy back lot's of it's own stock prior to it's big defication? Of course, the pilot's should continue to hold Gary's feet to the fire. Afterall, it's mgts job to pull a rabbit out of it's hat. I say they hire Chris Angel to run things in 2008.

Should have gone with those 190's!

imp:​

 

[Widow's Son]

Swa has lost money one quarter in the last 30 years. It has never lost money two quarters in a row since it turned profitable.
If the current market is such that SWA is going to turn unprofitable then the rest are toast.
The truth is the article is an example of statistics lying. For accounting purposes, new markets get front loaded with a lot of startup expenses, marketing, advertising, tenent improvements, et-cetera. Taking over abandoned markets to grab total market share is expensive on the short term and very profitable over the long term. Fortunately, SWA can afford to be patient. The highly profitable markets in California that are supposedly carrying the system were originally started this same way and were technically losers at first. This isn't the first rodeo for the management team of SWA.

 

[mwmav8r01]

Deleted

 

[Tejas-Jet]

yaaawwwwwnnnnnnn

 

[lowecur]

Swa has lost money one quarter in the last 30 years. It has never lost money two quarters in a row since it turned profitable.
If the current market is such that SWA is going to turn unprofitable then the rest are toast.
The truth is the article is an example of statistics lying. For accounting purposes, new markets get front loaded with a lot of startup expenses, marketing, advertising, tenent improvements, et-cetera. Taking over abandoned markets to grab total market share is expensive on the short term and very profitable over the long term. Fortunately, SWA can afford to be patient. The highly profitable markets in California that are supposedly carrying the system were originally started this same way and were technically losers at first. This isn't the first rodeo for the management team of SWA.

SWA is building it's fleet as though someone is going out of business in the next few years. You think that's going to happen?

With the realization that no one's going out of business anytime soon, they will do the same thing JBLU did and actually sell off the older planes as new ones come on board. Gary has actually tried to put US Air out of business and now he has moved on to FRNT with an asterisk to weaken UAL further at IAD and DIA. Good strategy for an airline that can afford it, but past economic history for SWA is not a realistic portrait of the future as network CASM continues to climb close to the legacys without any benefit from transatlantic profits.

Patience is a great virtue, but one that SWA will be unable to afford in the next few years.

imp:​

 

[SWA GUY]

Lowecur,

The Shinola goes on the top...