Southwest Grows More Midway Monstrous

[The Prussian]

The real shocker was pulling out of SJU. We used to fill up L10's in and out of there.

HT:
Got any idea what the BE load factor was to either SJU or MSP? Can't see any company pulling out of markets that are making decent money. If break even LF gets close to or over 100%, either the costs are too high or the prices aren't high enough to cover the costs (ie. stiff NWA competition in the case of MSP)...

 

[HalinTexas]

Here's the difference between ATA and everyone else: We don't advertise. Mgt. says otherwise, but here's some evidence. (1) A week ago, Sunday, I was working on my back porch with the radio tuned to the Cowboy game. I heard no less than 3 Airtran commercials on the radio in Dallas. (2) JetBlue gets tons of free press through Soros' connections and being HQ'd in NYC. No need for marketing. (3) My wife and I watch Fox and Friends in the AM. We'll see 2 or three UAL cartoon commercials in that hour or hour and a half. UAL's been in BK for 3+ years. (4) Five years ago when we were running service from SJU to JFK and MCO (with L10's), two a day to MCO, FLL, MDW we were full. We ran limited spanish language spots in the MIA area. Word spread quickly through the PR community on the mainland. Gas was cheap then, on the order of $0.80/gal for Jet A. When the spots stopped, loads diminished. We've slowly pulled out of SJU for a year, but the Carib. is still an untapped market for LCC's, hence the advancement of JetBlue, Spirit, and Airtran.

MSP: Lack of marketing is part of the problem. The last 12 months we've just been riding coat-tails of SWA, military charters (saved our a$$es again), and Pleasant Hawaiian (going away in Jan.). ATA had 6 AM departures, 7 days per week, from MDW. It was an originating flight. We never hauled more than 100 people, out of 160 or 175 seats, on most of those days. How good is that asset managment? We had a name for ourselves, along with Sun Country, in MSP. We had been doing charters out of there for years and years. NWA is tough, no doubt about it; there is some "home town company" loyalty to fight as well. But, there's always a market for the rebel iconoclasts that don't want to pay what NWA charges. Anyone remember their melt-down in MSP and DTW around New Year's in '98-'99? Man, that was ugly.

ATA's marketing philosophy is, "build it and they will come." Always has been.

Our management philosophy is "we can't do that. We've never done that before."

Our union is complicit in the above.

There is no doubt in my mind that charging less than $100 for a ticket is stupidity in itself. Fares in every market we've pulled out of have gone up. When we were trying to tap the SFO-EWR (NYC) market, we had our a$$es handed to us by CAL, with some help from AMR. We didn't advertise, we just brought out the B757-300's with $100 fares. The PIE-LAS and PIE-LAX flight? I don't want to talk about it, but the PIE-LGA flights were starting to pick up right before we dropped it. USA3000 and Airtran have moved into that market as well.

Airtran hasn't said how many of the gates they will take once we've moved out of the A gates in MDW, but there will be four available sometime in Jan. SWA is taking four of ours right now. I don't think it will be a blood bath. I think both SWA and Airtran will make money in MDW. There might be other changes in store for MDW. I think NWA largely exists there because of our flights to MSP and SWA's to DET. AMR exists in MDW because of our DFW and LGA flights; likewise with CAL and EWR. These may become more and more turned over to their regional (small jet) affiliates if they don't pull out all together.

Fuel prices being the accelerator, BK courts the catalyst, and increasing passenger traffic the carrot the next year our so is going to be a little more than just "interesting."

 

[Hamburgler]

Crazy, great news for ticket prices. I hope MSP comes down a bit, I'm sick of flying NWA there all the freaking time.

 

[capt. megadeth]

MSP.... next, I called it a few weeks ago!

Um, I called it when ATA announced they are pulling out. It was kind of obvious.