AMWest Feelin' The LUV and a Little Blue

[storminpilot]

http://msnbc.msn.com/id/6860402/

]Southwest/ATA deal puts more pressure on America West


[font=Verdana, Arial, Helvetica, sans-serif]By Mike Sunnucks [/font]
[font=Verdana, Arial, Helvetica, sans-serif]The Business Journal of Phoenix[/font]
[font=Verdana, Arial, Helvetica, sans-serif]Updated: 7:00 p.m. ET Jan. 23, 2005[/font]

[font=Verdana, Arial, Helvetica, sans-serif]America West Airlines faces some heavy competitive pressure from some familiar rivals as Southwest Airlines maps out its new alliance with ATA Airlines and gains gates in Chicago and Jet Blue Airways adds more transcontinental flights to California. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Dallas-based Southwest recently acquired six terminal gates at Chicago's Midway Airport and entered into a code-sharing alliance with ATA. The deal coordinates SWA and ATA's reservation systems and flight schedules, and essentially allows Southwest to enter airports it has not previously served. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Southwest passengers now can use the ATA alliance to fly into airports such as Newark, N.J., Boston Logan, New York Laguardia, Washington National, Minneapolis-St. Paul, Denver, San Francisco and Honolulu. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Before the agreement, Southwest either did not serve those markets or flew into more outlying suburban airports in major cities such as San Francisco, Boston, Washington, D.C., and New York City. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]In those latter markets, Southwest flew into Oakland, Calif.; Manchester, N.H.; Long Island, N.Y.; and Baltimore instead of more centrally located airports favored by business travelers. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Both America West and New York-based Jet Blue used that previous Southwest route map as part of their marketing to convenience- and downtown-oriented business travelers. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]"It's now easier for our passengers to get into those markets by using the ATA code share," said Southwest spokeswoman Whitney Eichinger. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]ATA recently filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Dallas-based SWA also is entering the Pittsburgh market in May to take advantage of continued retrenching by troubled US Airways. Southwest launched new service previously in Philadelphia, another hub for US Airways. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Those changes will increase competition in those markets and put major pressure on Southwest rivals, including Tempe-based America West, airline industry analysts say. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]"They've opened up a lot more markets," said David Stempler, president of the Air Travelers Association, a consumer-oriented airline industry group. "Their steamroller has certainly gotten larger." [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Stempler said the ATA code-share and new Pittsburgh and expanded Chicago Midway operations will put downward pressure on fares and broaden Southwest's reach as it competes with low-cost rivals AmWest and Jet Blue and traditional flyers such as United and American airlines. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]"It will give Southwest some competitive edges against America West and Jet Blue," he said. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Eichinger said the Chicago gate acquisition brings the airline's presence at Midway up to 25 gates. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]AmWest spokesman Carlo Bertolini said Southwest's recent moves will put more pressure on traditional, higher fare "legacy" carriers, and AmWest is used to competing with SWA. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Bertolini said America West does not have any immediate changes in store for the markets impacted by Southwest. AmWest announced Jan. 18 new service between Las Vegas and Oklahoma City, and Bakersfield and Long Beach, Calif. AmWest also entered into a code-sharing agreement with Australia's Quantas Airways. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Southwest is not the only low-fare rival putting pressure on America West. Jet Blue announced Jan. 17 it is adding more flights between California and the East Coast (Boston, New York and D.C.) [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Transcontinental flights between the East Coast and Los Angeles and San Francisco have been a top priority in recent quarters for America West. And, California has been a very competitive market in recent quarters among discount and traditional carriers. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]"It's pretty fierce," said Bertolini of the current competitiveness level in the California market. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Jet Blue, which recently launched New York to Phoenix service, also is expected to boost its service to midsize markets with the acquisition of smaller planes. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Southwest and America West are the top two carriers at Phoenix Sky Harbor International Airport. In 2002, AmWest lowered its fare prices and reservation restrictions to better compete with low-cost king Southwest. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]Phoenix is one of Southwest's top operations hubs, including large aircraft maintenance and back office customer-service centers. [/font]

Get connected [font=Verdana, Arial, Helvetica, sans-serif]Southwest Airlines: www.southwest.com. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]America West Airlines: www.americawest.com. [/font]

[font=Verdana, Arial, Helvetica, sans-serif]URL: http://msnbc.msn.com/id/6860402/[/font]

 

[xanderman]

Competition is fierce. It'll be interesting to see how it pans out.

 

[PHXFLYR]

See what I mean,Andy? Nero (AWA) fiddles while Rome burns.
Welcome aboard,friend.....


PHXFLYR

 

[m80drvr]

Great I start class on the 7th. Hope I dont get furlough number 3

 

[PHXFLYR]

I really don't think it will come to that. We have 22 airplanes coming over the next 2 1/2 years.I would like to think you will be OK. I just wish we we're a little bit more of a "player" in the industry and were a little more aggressive in taking advantage of some of the opportunities that were out there recently. Somehow, I get the nagging feeling that our balance sheet is in tatters and just won't allow us any room for expansion unless of course it's done by Mesa RJ's.

PHXFLYR

 

[Wiskey Driver]

Furlough, naw it ain't gonna get that far!!! Just relax.


WD.

 

[xanderman]

See what I mean,Andy? Nero (AWA) fiddles while Rome burns.
Welcome aboard,friend.....


PHXFLYR

Hey buddy! Haven't seen ya around much... Yeah I know what you mean. But I'll still try to be as positive as one can.
Andy

 

[PHXFLYR]

Good for you!! Will try to do the same. Hope the folks in the "Tempe Tombstone" have some plan going forward. If not, I just might have to take you up on your offer of meeting your Twin Otter buddy down in Eloy!! Hope you had a nice Christmas and New Years Holiday. You gonna be home for the Super Bowl?

PHXFLYR

 

[TWA Dude]

m80drvr: I've seen to much to ever feel furlough-protected. AWA's losses aren't good but losses alone won't lead to furloughs. That being said I'd never rule anything out. Our hiring plans could come to a screeching halt in an instant. Just admit that you're taking a chance, albeit an educated one, and you'll find peace more easily. I have no regrets about my career decisions so far even though things haven't worked out as well as hoped.

 

[xanderman]

Good for you!! Will try to do the same. Hope the folks in the "Tempe Tombstone" have some plan going forward. If not, I just might have to take you up on your offer of meeting your Twin Otter buddy down in Eloy!! Hope you had a nice Christmas and New Years Holiday. You gonna be home for the Super Bowl?

PHXFLYR

Yeah the holidays were great! How about you? As far as the Super Bowl, I will be working. I bid LAS and was able to hold a line!

Just let me know about the Twotter...
Andy

 

[PHXFLYR]

Thanks! But lets hope it doesn't come to that if you know what I mean. Hey, great news about LAS. Much better to be a line holder than to be stuck on reserve. You gonna move there or try commuting for a while?


PHXFLYR

 

[PHXFLYR]

-------

 

[xanderman]

Thanks! But lets hope it doesn't come to that if you know what I mean. Hey, great news about LAS. Much better to be a line holder than to be stuck on reserve. You gonna move there or try commuting for a while?


PHXFLYR

I don't think it will come to that either...

Actually we bought a house down here in PHX so I'll be commuting for some time. Shouldn't be too tough though. I think between AWA and SWA there is a flight every five minutes...
Andy

 

[PHXFLYR]

You know,if you bought in Las Vegas,you wouldn't have the state income tax bite like you do in PHX. Might make a little difference in take home pay,no?

PHXFLYR

 

[Sandhawk]

Good for you!! Will try to do the same. Hope the folks in the "Tempe Tombstone" have some plan going forward. If not, I just might have to take you up on your offer of meeting your Twin Otter buddy down in Eloy!! Hope you had a nice Christmas and New Years Holiday. You gonna be home for the Super Bowl?

PHXFLYR

Hey PHXFLYR,

I think I'm junior to you, so if things go TU, I'll be back to full time in the Otter in Eloy...

Xanderman's Diver Driver Buddy

 

[PHXFLYR]

Well,I guess that would make me jr to you if we should all land up in Eloy!! But like I said earlier,lets hope it doesn't come
to that PHXFLYR

 

[xanderman]

PHXFLYR meet Sandhawk!

Okay now that the intro's are complete...

Andy

 

[Cactus73]

I really don't think it will come to that. We have 22 airplanes coming over the next 2 1/2 years.I would like to think you will be OK. I just wish we we're a little bit more of a "player" in the industry and were a little more aggressive in taking advantage of some of the opportunities that were out there recently. Somehow, I get the nagging feeling that our balance sheet is in tatters and just won't allow us any room for expansion unless of course it's done by Mesa RJ's.
PHXFLYR

You hit the nail on the head. We can't really be a "player" in the industry do to some of the things that are left over from Bill Franke.

-Really high debt and a junk rating. Can't raise much cash.
-High fuel prices with hedges in the $40 range
-Two leisure market hubs that have real revenue problems. To give Parker credit he has been trying to get around some of this by some point-to-point expansion. He just didn't expect the irrational response from our competitors.
-A 1997 agreement with MESA to bring in way more RJ's than we need or want. We need MESA but we don't need them to be as big as they are.
-Operational performance that just sucks. We have a problem getting flights out on-time. Everytime we misconnect pax or are late we lose a lot of money. I wonder how much of our $49.7 million loss can be attributed to this horrible performance?

Add all these up and the picture looks grim. The good news is that I think we will survive and as you noted we have 22 Airbus on order coming over the next two years. We will need pilots just to keep alll our airplanes flying.

Don't lose hope yet.

 

[PHXFLYR]

I won't......

PHXFLYR

 

[UALjan15]

-Operational performance that just sucks. We have a problem getting flights out on-time. Everytime we misconnect pax or are late we lose a lot of money. I wonder how much of our $49.7 million loss can be attributed to this horrible performance?

I'm new to the airline and still in the schoolhouse. I'm just trying to get some perspective on the "why" for the reality of the above statement. Some of my hunches include:

• • Spillover delays from the shabby Mesa operation?
  • Crowded departure banks cause lengthy takeoff delays (although these may be built into block time)?
  • VFR optimized PHX operation falls like a house of cards during summer monsoon and winter storms?
  • Corndogs getting taxi and takeoff priority (Just kidding! I've seen that thread before...Close that can of worms fast!)
  • Blue-Hairs just can't get on and off the airplane fast enough?

Any of you more seasoned Cacti like to comment on these or any other ideas?