Interesting...CAL load factor over 10% Higher than SWA...

[Sedona16]

How long has it been like this? I would have thought SWA, who historically has gone after economies of scale (lower prices but more people....make it up in volume) would have higher load factors. Any insight?

Southwest also reported that November traffic grew 2.6 percent, measured by miles flown by paying passengers. That growth, however, failed to keep up with a 6.4 percent increase in capacity.
As a result, average occupancy on Southwest flights slipped to 69.3 percent from 71.8 percent in November 2006.
Those results mirrored numbers late Monday from Houston-based Continental Airlines Inc., which also cut its growth expectations for 2008 to between 2 and 3 percent, down from 3 to 4 percent. The entire increase will be international — the carrier said it will shrink domestic capacity.
Continental also said its average occupancy or "load factor" in November slipped 0.7 percent to 80.4 percent from last November.

http://ap.google.com/article/ALeqM5gTb0EeHIRZ37YNj6FzkvQgurPccgD8TAUI0G0

 

[Bake]

SWA has always had the lowest load factors.

 

[Sedona16]

So just to be sure, they have always had the lowest load factors, they have hisorically always had the lowest or near the lowest price for tickets and now have the highest pilot wages. The trifecta of their business model then is less debt, better fuel hedges, year over year growth, and running their airplanes more hours than the next guy?

 

[firstthird]

It isn't just less debt, hedges and growth.

You left out single aircraft type and point to point vs. hub and spoke.

But yes, SWA has traditionally carried a lower LF and still made money. Our model is changing some (boarding procedures, ticket prices, code share) but it remains to be seen how wide ranging the change is.

 

[Benhuntn]

You also left off productivity...We fly 8 legs a day and that would kill any Conny guy.

 

[Ex737Driver]

It isn't just less debt, hedges and growth.

You left out single aircraft type and point to point vs. hub and spoke.

quote]


Meals, first class, pillows, blankets, entertainment (no, not FA's), President clubs, and I'm sure a few other things I can't think of.

 

[firstthird]

not to mention international, heavy metal, etc.

was just sticking with the simplistic ideal of the thread.

many of the other LCCs that are supposed to be emulating SWA in reality are not (due to more than one a/c type and/or pseudo hub and spoke systems; ATL for airtran or JFK for B6 anyone?)

In fact, SWA does much more connecting traffic than we used to through our pseudo-hubs (pilot bases) but still there is a fundamental difference in business plan.

hub and spoke carriers can offer thousands of destinations (through codeshare and partners) and go from very small to very big cities. They can also charge a premium for this service, while SWA is in the business of providing frequency from/to bigger/middle size cities. simpler operation = lower fixed costs.

neither is necessarily right or wrong, just different. hub and spoke carriers tend to make big money when the economy is doing well (before 9/11) and lose/stay even during recessions. SWA is more steady eddy never making the multi-billion profits but so far also not losing money in the down cycles.

So, it is much more than fuel hedges, debt and growth. In fact, the ability to hedge and keep low debt are directly attributable to the simple spoke to spoke system that can thrive at lower LFs than a hub and spoke tends to do.

The reason more legacies and other LCCs aren't better hedged isn't because of some management failure but rather the inability to get financing cheap enough to make hedges worthwhile.

 

[flygirlqt]

If you factored out our International traffic, I would guess CAL's domestic load factor would be fairly close.

 

[d.fitz]

If you factored out our International traffic, I would guess CAL's domestic load factor would be fairly close.

I guess you haven't tried to commute on CAL lately... If it's not oversold, they will reduce capacity until it is, or eliminate the flight all together.

 

[flygirlqt]

I guess you haven't tried to commute on CAL lately... If it's not oversold, they will reduce capacity until it is, or eliminate the flight all together.

Experiences about where one would commutes from does skew reality.

 

[Flopgut]

You also left off productivity...We fly 8 legs a day and that would kill any Conny guy.

Oh, how I admire you....

 

[RDG]

The last couple of months before November had year over year load factors up. Seems to ebb and flow like the tide.

 

[CHQ Pilot]

Overall load factors really aren't a good measure of performace. The break even load factor is a better determination of overall health with regards to actual load factor. SWA has been able to keep a lower break even LF which complements the overall operation (ie don't have to fill the plane to make money which helps in turn times, number of employees per aircraft required).

 

[Mach 80]

As inferred in an earlier post -- hub and spoke airlines, with all the connecting traffic, tend to have higher load factors than a point to point system, but the lower load factor in the point to point system is more than off-set by various efficiencies with the point to point flying.

 

[Ben Franklin]

You also left off productivity...We fly 8 legs a day and that would kill any Conny guy.

I don't agree that #of legs flown per day is an accurate determination of pilot productivity.

Sincerely,

B. Franklin