Could Southwest's run of profitability be coming to an end?

[jke406]

Those low paid Piiots that rolled the dice got "stock/profit sharing" instead of the high pay and juicy pensions the other airlines had. The one's retiring today are leaving typically with 3-4 Million cash! Highest one I heard of was 7+ Million.

7 million cash? really? that would be over 58,000 shares of stock at 12 bucks/share.

but you did say "cash" and not "stock."

 

[fiel12]

Your company spent 20 years at the bottom of the heap and are only on top now because everyone else took a pay cut.

Hmmmmmm. When did CAL, DAL, UAL pay their 737 CA's 250-300k a year?

 

[Sedona16]

Plain and simple if SWA lost its hedging advantage and had to raise prices across the board in every city to what all airlines were charging (including advanced fare) they would suffer badly. Their whole model is based upon low fares and a no frills product. They are falling further and further behind in the offerings with the likes of live TV and a host of other upgrades the other airlines are making to their fleets.

I know the southwest guys like to think there is loyalty to the airline with the uglies planes but it just aint so. Price is what keeps them afloat. Btw, adding some computer kiosks was a nice idea but not enough. SWA is the flavor of the month after 911. I think it is great they have so many profitably quarters in a row but the industry is quickly morphing into something unlike every seen and the domestic market is saturated. The model southwest used in the past will be more difficult (not impossible if they can cannibalize markets where other carriers are dying....read Frontier/Denver). Other than that they best keep their hedges in place or it does not bode well for them in the next ten years.

 

[fiel12]

Their whole model is based upon low fares and a no frills product.

FYI, I just jumpsat on a legacy carrier the other day on a 2 1/2 hr flight. The gate had no computer kiosks or comfey chairs. On the flight, bevs only, not even pretzels. But I will say the flight /cabin crew was great to me.
Thanks guys!
Oh yeah, sorry. What was that about no frills?

 

[Sedona16]

FYI, I just jumpsat on a legacy carrier the other day on a 2 1/2 hr flight. The gate had no computer kiosks or comfey chairs. On the flight, bevs only, not even pretzels. But I will say the flight /cabin crew was great to me.
Thanks guys!
Oh yeah, sorry. What was that about no frills?

Well barring your experience I think across the board there is little comparison. Delta has adapted much of what was on Song and I can tell you from first hand experience it is being well received. Do a word association with John Q. Public and throw the name Southwest Airlines out there and you will get "Cattle Car Operation" followed by "Low Prices".

Alaska is now facing a direct assault from VA on a model that has worked for them for years (read "can AK survive assault from VA" thread) and this is not unlike how many in the industry are raising the bar while SWA rides its old worn out ways. Alaska is trying to rise to the occasion but they have alot of ground to cover. Dont get me wrong, as a pilot I hate VA and think they are one of the new cancers to add to the long list of LLC's but they bring a new game to town as far as competition/amenities go, far beyond the no frills show SWA continues to try to run with.

PS- I suggest riding in the back on another flight because the advantages I am talking about are large in part found on the actual airplanes during the flight and not at the gate.

 

[Tanker Clown]

FYI, I just jumpsat on a legacy carrier the other day on a 2 1/2 hr flight. The gate had no computer kiosks or comfey chairs. On the flight, bevs only, not even pretzels. But I will say the flight /cabin crew was great to me.
Thanks guys!
Oh yeah, sorry. What was that about no frills?

Is being late a frill? That seems to be a legacy special.

 

[puddlejumper101]

Well barring your experience I think across the board there is little comparison. Delta has adapted much of what was on Song and I can tell you from first hand experience it is being well received. Do a word association with John Q. Public and throw the name Southwest Airlines out there and you will get "Cattle Car Operation" followed by "Low Prices".

Alaska is now facing a direct assault from VA on a model that has worked for them for years (read "can AK survive assault from VA" thread) and this is not unlike how many in the industry are raising the bar while SWA rides its old worn out ways. Alaska is trying to rise to the occasion but they have alot of ground to cover. Dont get me wrong, as a pilot I hate VA and think they are one of the new cancers to add to the long list of LLC's but they bring a new game to town as far as competition/amenities go, far beyond the no frills show SWA continues to try to run with.

PS- I suggest riding in the back on another flight because the advantages I am talking about are large in part found on the actual airplanes during the flight and not at the gate.

Blah blah blah...yes we know SWA is going down in flames...they have been going down in flames for 37 years.
Kelleher build it...kept everyone happy...never screwed his own...made millionaires out of all of those employees that stuck it out in the 80's so yeah he should be well compensated. I bet you did not know that a few years ago SWA had the most millionaires working for them than any other COMPANY in the United States...even more than Microsoft. So yeah Herb deserves every penny, if anything, he should have made more.
Last I heard this cattle call thing has been exactly that since SWA started...their service has always been below that of legacy carriers or other discounters (or so they say)...and their hedges will run out and they will tank. Why don't we find a new topic to discuss??? Waiting for SWA to tank seems to be the hobby of most around here.

 

[Tanker Clown]

Plain and simple if SWA lost its hedging advantage and had to raise prices across the board in every city to what all airlines were charging (including advanced fare) they would suffer badly. Their whole model is based upon low fares and a no frills product. They are falling further and further behind in the offerings with the likes of live TV and a host of other upgrades the other airlines are making to their fleets.

I know the southwest guys like to think there is loyalty to the airline with the uglies planes but it just aint so. Price is what keeps them afloat. Btw, adding some computer kiosks was a nice idea but not enough. SWA is the flavor of the month after 911. I think it is great they have so many profitably quarters in a row but the industry is quickly morphing into something unlike every seen and the domestic market is saturated. The model southwest used in the past will be more difficult (not impossible if they can cannibalize markets where other carriers are dying....read Frontier/Denver). Other than that they best keep their hedges in place or it does not bode well for them in the next ten years.

No offense Sedona, but are you a retard or someting? Whatever you think of the Southwest model, it's the ONLY one that has been consistantly successful. UAL, DAL, and NWA all were in BK a few years ago. Who made money last quarter? WN and CAL. DAL has so much debt that it would have to have a couple decades worth of record profits to pay off their debt. UAL looks like it is starting to have a ton of issues. If I had a choice, I'd go with the "post 9-11 flavor of the month." But then again, I don't like pay cuts and furloughs.

 

[Sedona16]

Blah blah blah...yes we know SWA is going down in flames...they have been going down in flames for 37 years.
Kelleher build it...kept everyone happy...never screwed his own...made millionaires out of all of those employees that stuck it out in the 80's so yeah he should be well compensated. I bet you did not know that a few years ago SWA had the most millionaires working for them than any other COMPANY in the United States...even more than Microsoft. So yeah Herb deserves every penny, if anything, he should have made more.
Last I heard this cattle call thing has been exactly that since SWA started...their service has always been below that of legacy carriers or other discounters (or so they say)...and their hedges will run out and they will tank. Why don't we find a new topic to discuss??? Waiting for SWA to tank seems to be the hobby of most around here.

This is only one of a variety of topics I have weighed in on. If it hurts your feelings go have a good cry in the corner or quit coming to these threads you know all too well about then posting which no doubt further injects life causing the thread to grow further. I have noticed some southwest guys like to focus on small slices of the reality of the company they work for. It has been a good operation from a profiitablity standpoint. Some of the early guys did make alot of money on stock. How long has it been a top five pick to work for pilots? Id say about seven years of all the years it has been in existance (Im sure some will give antidotal evidence to the contrary). The higher pay RELATIVE to others these PAST SEVEN YEARS and growth have made it more attractive when others were going into BK. I dont see it being the flavor of the month into the next decade. Its reliance on "we just keep doin it the way weve done and will get what we have gotten" mentallity with a market that has and is changing is coming to bare.

 

[Tanker Clown]

Sedona...I don't even have a dog in this fight, but I would just say SCOREBOARD. Reguardless of what you think, they do something that no other airline does on a regular basis: MAKE MONEY.

What's the next "flavor of the month?" Delta, and all their debt. UAL & AMR are both significantly flawed. CAL is probably your best bet, but I had to pick a way to feed my family, I'd go with SWA any day of the week. You obviously aren't a fan, but you should thank the SWA guys for raising and holding the pay bar. No one else can claim that.