Fool reiterates the falling SWA model

[SWAdude]

I'm sorry guys. We had a small tremor in our town today and my scale SWA 737 fell off the shelf. Well then a reporter called my house and asked about the condition of our home. I told them the only thing I had any concerns were the "falling of (my) SWA model.

A complete misunderstanding. My fault. I apologize. Carry on.

 

[Bavarian Chef]

Pure genius, SWAdude.

 

[FlyBoeingJets]

Yes, Lowecur, the model is in trouble.


Short LUV and buy up JetBlue.






P.S. In reality I believe your assumptions about the future are in trouble. But I can't possibly argue it. I just believe in a different version of the future that has yet to unfold.

Think about debt loads. Think about who is buying new airplanes, who is leasing and who are not getting new ones.

 

[Mgmt1Pilot]

I can already see this article annoying a lot of SWA guys. How dare anyone question the mighty SWA. But hey, someone had to take over that arrogant swagger after Delta lost it.

If you go back over the years a few airlines that were at the top of their game had the inflated ego syndrome. I still remember Pan Am, United, Delta, American. Now the first LCC has it, SWA. Soon another will have it when SWA eventually faulters, and oh yes, evenyone eventually faulters. If SWA thinks they will be Golden 20 years from now (can I smoke some) they need to remember LCC models are here to stay for everyone now and in the future.

Good luck you'all imp:

 

[lowecur]

Because he's a Pilot just like the rest of us. He is a JetBlue pilot based in FLL I believe.....I'm not a pilot, I'm in the Insurance Business? you're FLL based right Lowecur?? No, Boca Raton.

For some really immature F'd up reason he gets his jollies hiding on Flightinfo pretending to NOT be a pilot, and pretending NOT to work for Jetblue. He won't admit it..... in fact he'll be along any minute trying to slam me for pointing this FACT out.....LOL! Well it wasn't any minute, I do have to count my money sometimes.

I found all this out before when Mark (rest in peace my friend) the webmaster used to show the IP addresses of the posters. One day I got tired of him posting as Lowecur the retired insurance exec AND as a SWA FO, and decided to find out who he was. He is neither..... he is a Jetblue pilot. Wrong, and I told you before when you threatened to print my name to go ahead and do so if I worked in the airline business. Guess what, no name.

I outed him over a year ago and he quit posting as the SWA pilot....., Joe Peeoznotz rest in peace was my hero. but after awhile Lowecur slowly sytarted his same immature drivel.

CYA.

Like I said before, you should change your handle to Claire Voyent.

:laugh: imp:

 

[lowecur]

[FONT=&quot]Okay, I just can't let it go. Moteley Fool is still pumping jet blue stock after their less than stellar 4th quarter (CY). Now, if you read the article you'll see that he's going to do a follow up whether to buy the stock. Gee, I wonder what he'll say. Okay. But at least get your facts straight.

Okay, rant complete. And please, as I stated earlier, this rant isn't aimed at Jet Blue or their employees, in fact some of my best friends work for Jet Blue (a little humor there, although it is true); but at the MF column for shoddy reporting and irresponsible speculation. There are plenty of reasons to see positives for Jet Blue down the road, but I'm not sure any of them were pointed out in that column.[/FONT]

Lot's of Jetblue non-sense, but I still don't see where this present SWA model of opening 1st tier cities is going. If Gary intends to continue down the same path, the convergence of fuel costs and payroll expenses are going to meet. Gary will very calmly say, we need you guys/gals to get in line with the rest of the industry so that we can continue to be the LCC leader. He will then point out that you can't accuse mgt of not doing a great job. It will then be up to SWAPA to say yes you guys are the greatest and we can't hang our hats(like most of the other pilot groups) on what a bunch of greedy bastards mgt is and we are going to stick it to you.

Me personally, I believe the pilots are going to play hardball with ol Gary. It will be a knock-down drag out adversarial match where Gary will be welcomed to the real world of airline mgt.

After this is all completed and he realizes that SWA is no different than the rest of the pack, he will then award himself and all senior mgt a new record for stock options.

 

[firstthird]

Without a doubt the contract negotiations are going to be interesting.

I think the '2nd tier cities' as part of our bread and butter has always been a little overrated. We've been in LAX, PHX, and LAS for a while. We go where there are opportunities to make money rather than capture 'market share' or some other airline metric that gets quoted a lot. To paraphrase Gary it is all about our NIM (net income margin), ROIC (return on invested capital), CASM ex Fuel, and net income. None of those numbers are where we want them but most are trending the right way.

Gary says (and I believe) that we aren't competing against other airlines so much as we are against all fortune 500 companies. We're competing for the same capital, that we'd use to buy planes but Walmart would build stores with or GM factories. That is why we need to get numbers like NIM and ROIC up, which will move the stock, and we'll all be happy. Obviously the crux is how. That's why Gary gets the big bucks. As a pilot, I put our 3 SWA rules in action; Safety, Service, and Efficiently on Time. Well, that and fly my line unless I'm really sick, thus letting the company keep our 10.3 pilots per plane (or whatever it is) by not having to hire extra bodies to cover "sick leave vacation," although I must admit I'd like to see some kind of sick leave buyback in the next contract.

 

[737 Pylt]

There sure are a lot of airlines that would love to be failing just like WN is. I think the Motley Fool is....welll.....a fool. WN is well run by some smart folks and they enjoy good employee relations. Their business model works. The company has been profitable for decades. There may be a chink or two in the armor but my money is on WN staying in the game long term.

I agree....I wish my airline was falling like Southwest. But hey, when you're this low, you have to stand up to take a dump!
737

 

[Jim Smyth]

although I must admit I'd like to see some kind of sick leave buyback in the next contract.

I would be very very carefull what you are asking for here. The company isnt going to be giving you anything for your sick bank considering what its really worth. If your times above are current you wouldnt really have that much to sell back either. A question you may want to ask yourself is "If it was a good deal for you why would the Company want to buy it back"? They surely arnt going to give you dollar for dollar or whats the use? What are they going to offer? 10 cents on the dollar? If the current sick bank system is gone what happens next? Does Pilot sick leave sharring program start costing us ALOT more each month because more guys will be using it? Do you have to start paying very high medical insurance if you are out for a while (ie no sick bank) Do we have any insurance for ourselves or our spouses from age 60-65 considering the current buy back for medical coverage at age 60? Does longevity raises, jump seat use, non rev flying, stock options continue if your out sick? Does senority or vacation continue to accrue if your out sick? I would tend to think getting rid of the sick bank would be very detremental to our best interest.

Back in 1994 they surveyed us to death prior to that contract. They had a section in the survey that asked about wanting home access to SWA via the internet/Maestro. So what did I put down? I said Yes on the survey. Well 6 months goes by and a read before fly comes out. It says since you guys all wanted home access ( I didnt even own a computor at the time but figured it would be nice for the guys that did) Southwest is doing away with paper bid packets. That saved Southwest at the time 400K a year in printing costs.
Now Jim gets to go out and buy a home computor,printer,monitor for 3K. I now have a second phone line bill. I now have a Compuserve ISP bill. I have to supply paper,toner all at my expense. This is one very small example of be very,very carefull what you ask for in the up coming surveys/contract!

 

[HalinTexas]

But hey, when you're this low, you have to stand up to take a dump!

Funny, from where I'm sitting, I have to stand up so DAL(and NWA) can dump on me.

 

[Andy]

While The Motley Fool points out one legit weak area for Southwest, they are completely off the mark due to Southwest's brilliant fuel hedging strategy.

The one legit weak area for Southwest is the frills. I don't know if Southwest has looked at IFE, but that is the only missing item that stands out to me. I'm not a fan of the cattle call seating system, but I guess that you can now 'check in' online up to 24 hrs in advance to get a precious low boarding number. I even read about a service that, for a small fee, checks you in and guarantees you in the first group. So the only major frill that I see missing is IFE.

Where TMF completely misses the mark is the pricing power that Southwest has and will retain for at least the next two years. They will be able to control base fares in EVERY market that LUV serves. Bar none. They can use that power to target certain markets as loss leaders and more than make up for it in other markets.
Note in this article: http://www.ecommercetimes.com/story/49346.html (originally posted by SWA F/O) that Southwest raised prices in about 2/3s of their markets. LUV can easily target one or two other carriers and put them out of business before LUV's fuel hedges expire. So there may be a reason why JetBlue didn't match LUV's fare increase; it's possible that LUV didn't raise fares on routes that it competes against JetBlue.
Predatory? Yes. A way of life in the airline industry? Yes.
I completely agree with FlyBoeingJets on the debt levels. LUV is a formidable opponent with the low debt levels that they carry; it is almost as powerful a cost advantage as their fuel hedging.

I found the second tier airport argument without merit. JetBlue has started to go into busier airports such as LGA and is seeing their on time performance drop precipitously due to flying into them. LUV has been able to turn aircraft quickly due to avoiding saturated airports.
It's my understanding that the reason why LUV abandoned SFO was due to the poor operational performance out of there. (Side note- flying in and out of SFO will either kill Virgin America or they will relocate).

Oh crap, I was supposed to say something bad about LUV for the orange/brown kool aid drinkers. I wouldn't want them to miss their standard harumph harumph (ala Blazing Saddles). How about this: I can't believe that LUV is so far behind the times that they don't have IFE. (FWIW, I don't see lack of IFE as an achilles heel; TMF overstated this weakness).

 

[7S3W7A]

Me personally, I believe the pilots are going to play hardball with ol Gary. It will be a knock-down drag out adversarial match where Gary will be welcomed to the real world of airline mgt.

I hate to say it but I agree with you. Every other captain I fly with is all about greed. Every SWAPA negotiating newsletter touts how great profits have been in the past. That's exaclty it, the past. However, you know many pilots are 'know it alls' (that's about 90% around here) and they feel like they deserve a huge pay raise because we HAD great profits. Doesn't matter they can't see past their greedy fat belly.

It's going to be a sad day when SWAPA demands anything in the face of this industry and mounting competitive pressure. Then Gary is going to have to ask for pay cuts and either it will be an eye opener or furloughs will happen.

 

[Bavarian Chef]

"So there may be a reason why JetBlue didn't match LUV's fare increase..."

jb did raise fares. Just waited a 'lil bit that's all.

http://biz.yahoo.com/rb/060317/airlines_delta_fares.html?.v=1

 

[Andy]

"So there may be a reason why JetBlue didn't match LUV's fare increase..."

jb did raise fares. Just waited a 'lil bit that's all.

http://biz.yahoo.com/rb/060317/airlines_delta_fares.html?.v=1

JBLU matched fares on routes that overlapped with Delta.
I wouldn't assume that those routes overlapped with LUV.

 

[Andy]

I hate to say it but I agree with you. Every other captain I fly with is all about greed. Every SWAPA negotiating newsletter touts how great profits have been in the past. That's exaclty it, the past. However, you know many pilots are 'know it alls' (that's about 90% around here) and they feel like they deserve a huge pay raise because we HAD great profits. Doesn't matter they can't see past their greedy fat belly.

It's going to be a sad day when SWAPA demands anything in the face of this industry and mounting competitive pressure. Then Gary is going to have to ask for pay cuts and either it will be an eye opener or furloughs will happen.

When's the contract amenable?
You can chew through a lot of profitability when you are in a predatory mode.