SWA being called PREDATORY of others' misfortune

[GlobeIII]

Homonym Alert!

Sorry couldn't resist
Fairs= Cotton Candy, Crappy Country Singers, Cheesy Rides and Blue Ribbons

Fares= The cost of a ticket

 

[Poahi]

why do you people not get it. if we paid more for fuel we would have higher ticket prices...why can't you understand that.

True, but then you would have lower load factors, negative growth, lower market share and layoffs. SWA's model works because it can remain profitable with pricing power. Hedges give you that edge.

 

[Deadalus]

I say good for Southwest. Southwest is an airline that puts its employees first. Wow, what an idea. You wouldn't see Southwest aquire another airline and then standby while it's original employees got screwed now would you? I hope Southwest takes over the world. F$%@ Virgin, Delta, US Airways, Alaska, etc, etc.

 

[Whataburger]

It wasn't capitalism that ran Braniff out of Love Field.

Was it Capitalism or the American way that ran Legend out of Love Field? How'd that lawsuit turn out?

 

[Whataburger]

Sorry couldn't resist
Fairs= Cotton Candy, Crappy Country Singers, Cheesy Rides and Blue Ribbons

Fares= The cost of a ticket

Crappy Country is better than any good HipHop.

 

[donvag]

No offense to anyone on this post but I see hipocracy. In alot of ways what WN is doing to Frontier in DEN what Wal-Mart does to Middle-America or as a vulture does to a dying racoon. As pilots we justify it because we admire pilots compensation in that company and that WN has been succesful in its ventures. We usually blame the other company WN competes with as if WN has done no wrong. I disagree with that argument. WN just hits the coup de grace. It would be interesting if NOW a days they would find their OWN routes instead of flying routes to run other companies to the ground. Then again that what competition is all about. I hear regional guys hating CHQ or Skywest for doing the same thing WN does but they think WN is ok because they pay their pilots better. While I hope my current company keeps growing I would hate for the growth of my company to consist of the lay off of friends and former colleages. Just an opinion.

 

[Tanker Clown]

Well, when you build a better mouse trap....

 

[zkmayo]

No offense to anyone on this post but I see hipocracy. In alot of ways what WN is doing to Frontier in DEN what Wal-Mart does to Middle-America or as a vulture does to a dying racoon. As pilots we justify it because we admire pilots compensation in that company and that WN has been succesful in its ventures. We usually blame the other company WN competes with as if WN has done no wrong. I disagree with that argument. WN just hits the coup de grace. It would be interesting if NOW a days they would find their OWN routes instead of flying routes to run other companies to the ground. Then again that what competition is all about. I hear regional guys hating CHQ or Skywest for doing the same thing WN does but they think WN is ok because they pay their pilots better. While I hope my current company keeps growing I would hate for the growth of my company to consist of the lay off of friends and former colleages. Just an opinion.

To a certain degree, I agree, and I thought the same thing. I doubt so many pilots or posters on here would be willing to agree with WN's ability/profitability if their pilots werent among the best paid in the industry. It would be "blah,blah,blah...their building it on the backs of labor..."

 

[Tanker Clown]

One thing I think we all can agree on is that when the hedges run out and it's a level playing field, SWA will have to reduce costs to compete.

 

[Mach 80]

donvag,

Your post hints at re-regulation of airline routes.

The USA is a capitialistc country. SWA didn't "DO" anything to Frontier. Frontier could have grown in a strong profitable manner but for whatever reason it didn't and the journey down that road started before SWA started adding routes. It's a liberal left wing rant to start bashing a company for being succesful and competing well and strongly -- it's what made this country what it is today. Darwinism in business needs to continue (even though the bankruptcy laws throw a curve into it).

Are you going to lobby Congress to not allow a CVS drugstore be built within 3 miles of a Walgreen's? Is that the way you want the United States to operate?

By the way, Wal Mart has done much for this nation. Many of the people who work there would otherwise be on welfare. Many of the lower income mothers who shop there can better afford shirts and shoes for their kids whereas before WalMart they couldn't afford to clothe their children as well. People can afford to feed their familes better due to WalMart. It's made life better for people and helped far more people than harmed.

Ever hear the arguement as to who has helped more people -- Mother Teresa or Bill Gates?

The answer is Bill Gates. He caused to employ millions of people around the world providing income for people to take care of themselves and provide good medical insurance -- not just Microsoft but all the ancillary companies that arose around Microsoft such as computer manufactures. His work also improved productivity dramatically thus lowering costs for everyone -- so get the big picture and don't become some left wing liberal when it comes to how the capitalstic system in this country works. It's a tough world out there but that's the way it is and it's still far better than socialism or communism. People who lose jobs think it's the end of the world and it's certainly not fun and it is stressful -- I know -- I've been there. But history has shown those people often end up working at a stronger more secure company later. There are plenty of ex-Braniff, ex-Midway, furloughed UAL and AA at SWA and they are happier than they ever were at previous emplyers. Life does go on.
tankerclown -- SWA may not have to reduce costs. How about they raise fares instead? By then they will be more monopolistic in their markets and be able to do that to cover costs. They are keeping fares relatively low now while they can to make things difficult for the competition and solidify their markets. They can continue to do this for the next several years then if necessary start raising fares more.

 

[Amish RakeFight]

Good points, Mach80.

 

[Tonedrvr]

Sorry couldn't resist
Fairs= Cotton Candy, Crappy Country Singers, Cheesy Rides and Blue Ribbons

Fares= The cost of a ticket

Thanks Globe III I saw that as soon as I pulled up the thread this morning. I posted it with the kids yelling in the background. I was lucky to even put a coherent thought together last night.

 

[suupah]

what pisses me off about southwest is that they aren't a really good transpo option for the country. Try to book seattle to nyc on southwest!

they cherry pick routes. like leeches.

On the other hand they are now the best service out there.

 

[Dumb Pilot]

SWA's model works because it can remain profitable with pricing power. Hedges give you that edge.

Working for a company that is 100% hedged for the next few years, I can tell you that you are correct in "principle" but.....! Fuel hedges allow you to price at a fixed cost during market fluctuations but it doesn't eliminate the effects of rising fuel costs, it only delays them. The market is not fluctuating, it is rising and we won't see under $100 barrel of oil ever again in my opinion. When all is said and done, the ticket prices will have to be raised to absorve the fuel costs and the overcapacity will have to be reduced

 

[nimtz]

why do you people not get it. if we paid more for fuel we would have higher ticket prices...why can't you understand that.

And you are sure that the customers would be willing to pay that higher ticket price? Guess what with the sh!t storm this economy is in they won't...

 

[donvag]

Mach 80
What I said had nothing to do with liberal this, conservative that or socialist this. I don't think your response had anything to do with the substance. I missed your point. Sorry.

 

[MILPILOT17]

One thing I think we all can agree on is that when the hedges run out and it's a level playing field, SWA will have to reduce costs to compete.

When the hedges run out it won't matter because there won't be anyone flying. I for one am not looking forward to the end of the world.

 

[Mach 80]

>>>>they cherry pick routes. like leeches<<<

No, like smart businessmen.

I don't see anything about airlines being a public utility.

I do recall seeing (and maybe they still have it) on UAL airplanes alogo of "Wordwide Service", including on the little turbo-prop "regional partners". Comes across like some sort of boast. Well, they are steadily droppping some of the "wordwide service".

Perhaps if THEY had cherry picked their routes, their balance sheet may look a little better and they would have never gone into bankruptcy.

It is ignorant to think an airline should be operted for the purpose to get all people to any and all destinations. Much much better fore the employees to have them operate to stay profitable.

Maybe you should lobby Congress to re-regulate the airlines.

nimtz -- loads will fall off some with higher fares. SWA will find the ideal price point to maximize revenue. Due to competitive reasons, they probably aren't at the best price point for revenue at the present time.

donvag,

You said this:" We usually blame the other company WN competes with as if WN has done no wrong. I disagree with that argument. "

Maybe you didn't mean it, but to me it certainly appears you are saying SWA has done wrong because you said "as if SWA has done no wrong", but you say you disagree with it thus it appears you are saying SWA has done wrong.

Done wrong for being successful, remaining profitable, remaining a strong competitior?? If you really think that, than you are leaning towards being a left wing socialistsic liberal.

 

[Mach 80]

In the long run, you guys can quit worring about there being an American airline industry. After the U.S. airline industry gets worse, there will be strong lobbying to get rid of the 25% foreign ownership of U.S. airlines and then foreign airlines will end up propping up the U.S. airlines.

 

[donvag]

Mach 80

I still dont think one thing has to do with the other but whatever.

I do not know if you have ever jumpsat on Frontier and WN but Frontier has a better product. My two cents. WN management seems to know what its doing.
Like I said, from past experience I do not like to see when 1000 people lose their jobs to benefit a few others pay raise. That is not political and its not good for competition either. I do not like to even see Captain Opentime losing his job.

Im not saying to re-regulate the airlines but the next big one that goes belly up should simply be allowed to liquidate. Tax dollars shouldn't be used to save a company that time and time again has been proven to be mismanaged. (Oh wait, Now Im sounding like a capitalist, republican, right-winger.)

 

[Dude]

There cannot be an itelligent comparison of Southwest Airlines and Wal-Mart. Two completely different companies. Wal-Mart is no champion of labor and falls short with service. There is little attempt at Wal-Mart to improve the quality of life for the average employee and this is 180 degrees from WN. Wal-Mart isn't making goods more affordable, they are making them cheaper. There is a profound difference.

A loose comparison could be made regarding pricing, but that's it. Wal-Mart has the capital, leverage, and bargaining power to tell manufactureers how much they are going to charge for their own product. They actually tell people what their price will be. That's pretty powerful stuff. In turn, they imobilize every small business with low prices and eventually the public is unwilling to support a small business because its product is 10-20% higher, regardless of service and commitment to their community. Southwest is able to keep fares low with their hedging protection while oil is high. With a healthy balance sheet and protection, WN can sustain a surge in costs that others cannot. You will find happoer employees at WN, as well.

 

[Quimby]

what pisses me off about southwest is that they aren't a really good transpo option for the country. Try to book seattle to nyc on southwest!

they cherry pick routes. like leeches.

On the other hand they are now the best service out there.

So you use one city pair as your argument that the largest domestic airline is not a good "transpo" option for the country?

Hey Elvis.....if SWA offered you a flying job today, you'd turn it down right? You wouldn't turn around to work for the "leeches"...........riiiiiiiight.

 

[FR8mastr]

While the argument about incompetent management at other airlines is certainly true, and cant be argued.

Does anyone remember about 10 years ago when the legacy carriers were still strong, SW was pitching a fit about predatory pricing to congress. They won. So basically its ok for SW to undercut everyone, its just not ok for a legacy to do the same.

History is a pain isn't it.

 

[Dizel8]

Dude,

One ould argue, that LUV, which in the past paid less than industry standard, has used the very same business tactic as Wallyworld.

Now, it has to be said, that LUV treats their employees much better, but pay wise, LUV was lacking.

Don't harbor any animosity, jsut palying devils advocate.

 

[inline]

Southwest

This will be the new designated great satan for liberals/WalMart haters. They'll lead the chorus for re-regulation of the airlines.

 

[Mach 80]

First of all, do you guys really understand what predatory pricing is? It's when someone sells a product well below the cost of the product in order to drive someone else out of business. The major airlines did this all the time years ago.

Now, if SWA has ticket prices that it sells which are lower then the competition's yet not below THEIR cost of product -- that is NOT predatory pricing. You can't just cite a few seats at special fares in an effort to prove either --you have to look at all the flights and all seats at all times. With SWA's total costs, someone will have a very tough time proving SWA is doing 'predatory pricing'.

 

[ultrarunner]

Do you think that if the rolls were reversed that everyone else would be f'ing SW? Absolutely

Like stink on a monkey. It would happen so fast, even Herb would be impressed!

 

[ultrarunner]

Red,
I don't understand. Isn't SWA out there to make as much money as they can for their shareholders?

In theory, yes. But their performance in that department is dismal at best.

 

[ultrarunner]

One thing I think we all can agree on is that when the hedges run out and it's a level playing field....

You're not quite up to speed on how a fuel-hedging program works, are you?

 

[ultrarunner]

...Does anyone remember about 10 years ago when the legacy carriers were still strong, SW was pitching a fit about predatory pricing to congress. They won. So basically its ok for SW to undercut everyone, its just not ok for a legacy to do the same.

History is a pain isn't it.

I believe that was predatory pricing AMONG SWA competitors. Price-fixing if you will.

I don't think SWA is colluding with itself, do you? And I don't think they're making any pricing deals with anyone either.

They are going in were others are failing. I'm ok with that.