DFW takes SWA to task because of Denver

[Flopgut]

canyonblue:

Longer upgrades, concessions, and stock price declines are part of this business. I'm not wishing any of that on you, but lets keep some perspective. SWA is wildly profitable, is growing exponentially and is seeking windfall legislation that would allow it to short circuit the competitive process. AA is struggling, and shrinking and is only asking that instead of changing laws, SWA be required to follow the same steps it, and every other airline did, to compete in earnest. I don't see where you can assert AA is being as self serving as SWA. They are not even trying to change the status quo.

There are down sides to everything in this business. Right now legacy airlines are in a terrible downside period. Really, all airlines are in a downside except SWA. I'm glad you are making money, I hope you are a captain soon, and I hope your retirement is always secure. I am also not ashamed to admit, that if you get the WA repealed (in this environment no less) I hope there is a backlash. It would be well deserved.

 

[miles otoole]

I am also not ashamed to admit, that if you get the WA repealed (in this environment no less) I hope there is a backlash. It would be well deserved.

I now hope more than ever it passes very soon!

 

[firstthird]

I'm a little confused. A backlash? From the people of North Texas when the prices out of DFW come down? I guess I can see that, not.
It is a tough issue, no doubt. But as a free enterprise type, I think that when all is said and done, the repeal of the WA would end up helping AA. The SWA effect raises traffic for everyone, albeit at reduced profit margins from the current prices that AA can charge out of DFW.
I also think that if DFW gets their wish for SWA to come on over, it might be much uglier than it would have been if the WA just went away. Careful what you ask for, you just might get it. Just my pilot level opinion.

 

[Annie]

I am wondering what the similarities are between SW effort in Texas and their effort to "re-open" Boeing field to the public in Seattle. A short summary of WA would be helpful.
For what it is worth, I much prefer SW over Alaska Air.

 

[FlyBoeingJets]

Longer upgrades, concessions, and stock price declines are part of this business. I'm not wishing any of that on you, but lets keep some perspective. SWA is wildly profitable, is growing exponentially and is seeking windfall legislation that would allow it to short circuit the competitive process. AA is struggling, and shrinking and is only asking that instead of changing laws, SWA be required to follow the same steps it, and every other airline did, to compete in earnest.

SWA has been unfairly profitable since 2003. And that profit is due to hedges. But hedges are losing their bite. Unfairly profitable for 3 years does not equate to keeping the WA as is. Perhaps a phased or delayed end to it.

AA is struggling but that will change as revenue continues to rise and they increase international flying next year by 7%. Southwest can't increase international flying. AA has a strong feed and have made it out of the woods. Look for them to take market share from NWA and DAL.

Side note: Aviation week states Denver fees will be about $8 per. Not the higher price DFW claims. DFW must be looking in the rearview mirror, not forward. Aviation week also says the highest fee airport SWA serves is Seattle. Any sane management would try to find ways to limit those costs.

I try to appreciate the pain all carriers felt moving to DFW, but the hub and spoke demanded the move. The reason for the move was a huge construction project and promise of future prosperity. The reason for the proposed move now is to keep hot dog vendors and the Fort Worth mayor happy. Its a turf battle.

So DFW fails to grow as much as they want to. It will be better for everyone if they aren't the only game in town. SWA will not continue to be "wildly" profitable and pay concessions are around the corner. Those of us proactive enough to see it coming want to work every angle to make the pain smaller.

 

[apdsm]

SWA has been unfairly profitable since 2003. And that profit is due to hedges. But hedges are losing their bite. Unfairly profitable for 3 years does not equate to keeping the WA as is. Perhaps a phased or delayed end to it.

Unfairly profitable? Do you really believe it is "unfair" or is that merely a poor choice of words?

 

[FlyBoeingJets]

Unfairly profitable? Do you really believe it is "unfair" or is that merely a poor choice of words?

From a competitor's point of view, especially with the losses to pay and retirements, I can see it being called unfair. Maybe I could use a different word but my meaning is that it is not perfectly equitable to the employees involved. My point is even if SWA has had a tremendous advantage, that advantage is diminishing and the past 3 years is not a good enough reason to continue the Wright Amendment.

If we had been born just a few years earlier, made a couple different decisions, or faired less well in the interview, more than a few SWA pilots would have become Delta, CAL, UAL or AA pilots instead. We would be the same people but be on the other side of the fence.

 

[SWA/FO]

:laugh: Just check some prices into DFW from anywhere in the country. You AA folks like to rip people off :angryfire ! That is what all this whinning is about...AA is about to lose all their "suckers". These folks don't know any better and fly into DFW. The WA will fall.....quote me on that one. Its all good, GO SWA!!

 

[FlyBoeingJets]

J.P. Morgan: Fuel's Silver Lining for Airlines
http://www.thestreet.com/tsc/c.gif
By Ross Snel
TheStreet.com Staff Reporter
10/25/2005 12:30 PM EDT
Click here for more stories by Ross Snel


Like the rest of the airline industry, AMR's (AMR:NYSE - commentary - research - Cramer's Take) American Airlines and Continental Airlines (CAL:NYSE - commentary - research - Cramer's Take) face a gloomy winter, with sky-high fuel prices and the normal seasonal travel slowdown.

However, J.P. Morgan analyst Jamie Baker believes next year is starting to look bright for the two carriers -- the only so-called legacy airlines able to avoid bankruptcy in the wake of the Sept. 11, 2001, terrorist attacks.

Baker, whose firm does and seeks to do business with companies covered in its research reports, raised his ratings on both stocks to overweight Tuesday.
His investment call lifted AMR 25 cents, or 2%, to $13.01, and Continental 29 cents, or 2.5%, to $12.14. Baker contends that high oil prices are at long last having a salutary effect on the industry by forcing excess capacity from the system and allowing carriers to boost unit revenue.

"Ex-fuel margins are reaching new highs," Baker writes in a research note. "By our account, a model that was supposedly 'not built for $40 oil' appears poised to function at $60, though you wouldn't guess it looking at how certain equities have performed as of late. Not surprisingly, we feel better about the industry's near-term fundamental prospects and equity potential upside than at any time this decade."

In 2006, rising unit revenue should help AMR record a profit of $1.60 a share and Continental EPS of $1.15, Baker writes, adding that his forecasts are based on crude oil averaging $62 a barrel next year and crack spreads -- which measure the additional cost of refining that oil into jet kerosene -- averaging $12 a barrel.

Judging by what his peers predict, the J.P. Morgan analyst is sticking out his neck. The average estimates of Wall Street analysts surveyed by Thomson First Call are for AMR to lose $2.22 a share next year and Continental to lose 79 cents a share.

 

[flyinglow]

:laugh: Just check some prices into DFW from anywhere in the country. You AA folks like to rip people off :angryfire ! That is what all this whinning is about...AA is about to lose all their "suckers". These folks don't know any better and fly into DFW. The WA will fall.....quote me on that one. Its all good, GO SWA!!

You Know I did just that. I went on AA.com and check prices between several cities, one out of ORD and the other out of DFW. There was no significant difference in the fares. Sometimes they were higher other times lower. In one case ORD was several hundred more. Go ahead and give it a try. This ripping people off mantra that SWA likes to throw out there has no merit.