SWA Business plan Tanking..Did I miss something?

[jonjuan]

Can't wait to see the Virgin America FAs and IFE - they will set the standard.

You forgot the Virgin America pilots. Likewise, they will also "set the standard." Tool.

 

[cessnapilot]

http://www.forbes.com/2007/05/30/mc...ity-cx_cg_0530markets10.html?partner=yahootix

How much longer will these cool guys, be cool guys? All the boasting and rash comments on this forum. Every dog.....

We need all the good paying airlines to do well. It doesn't do anyone any good to gloat if swa finds itself having a hard time. I admit, many swa guys seem to not be so modest... but was it any different at United or AA? I was at TWA, and they were a humble group (for obvious reasons). It would be nice if we could just appreciate what we have and wish the best for the others. We don't need to see VA or Skybus redefining the industry... but hopefully swa people realize that they aren't totally safe, and there is no reason to gloat about the new contracts at nwa or Delta... as I had one capt do to me when jumpseating... We only do well if we see our counterparts at other good airlines doing well.

 

[Hose A. Jiminez]

It's called "market share." Southwest will fly a route (even if they lose money on it) just to secure market share. Once they attract and establish a customer base on that route with extremely low fares, they'll start raising the fares enough to make a profit. This strategy is talked about in the book, "Nuts." That article was one person's opinion. I'm sure Gary Kelly and Southwest management know what they're doing!

The book "NUTS" said we specifically avoid expanding solely to grab market share. Granted our business plan today has changed, and im not saying that doesnt happen now (SFO?). Just wanted to point out what the book really said.

 

[On Your Six]

You forgot the Virgin America pilots. Likewise, they will also "set the standard." Tool.[/quote]

Why don't you re-read what I wrote Jacka$$. I specifically referred to VA's flight attendants and the in-flight entertainment vs. SWA's limited offerings. I mentioned nothing about the pilots - we are all aware of how low wages will negatively impact the profession. Check it out: http://www.virginamerica.com/difference/

You can't tell me SWA can compete with this product on overlapping routes if the prices are similar - especially on longer routes.

Jonjuan, you need to focus on what we are discussing - we are looking at the changing competitive environment - get it? Again, name calling and personal attacks are not great substitutes for logical arguments. This is a discussion board and I'd love to hear some counterpoints or people who don't believe SWA can be impacted by the rising LCC storm. Sometimes the truth hurts.

 

[SWA GUY]

On Your Six eats his own poop!

How's that for debating?

 

[Skyboy722]

Six- You have to realize that SWA HAS BEEN competing with this product for some time now. I will agree that this is an ever-changing and much more competitive landscape. And I also agree that SWA needs to be able and willing to adapt. But for you to say that "NOBODY LIKES" that cattle call boarding process, or the FA's jokes, or the SWA product in general is a bit excessive. Ticket prices are all pretty much the same these days, and in many markets, SWA is not the cheapest way to get there. Yet SWA carries more pax than anyone, and with consistently industry leading customer satisfaction. Hard to argue that "NOBODY LIKES IT".

 

[beytzim]

On Your Six,

As a former Netjets pilot, I will tell you that rich people will NOT "throw their money" at will. In fact, many of them are the cheapest a-holes out there. Rich people fly Netjets at any cost because the current perception is Netjets the safest and most reliable corporate airline. If that perception ever changes, Netjets will fail the next day. Nothing is written in stone, even Netjets, my friend. In fact, Netjets has some major flaws, such as most of their profits are from selling new shares - what happens when their growth flattens (and for more than just 18 months, like it did in '04)?

My favorite line from that article:
Instead of emulating the corrective steps taken by Delta Air Lines (nyse: DAL - news - people ) and AMR (nyse: AMR - news - people )'s American Airlines, Southwest's mangement simply implemented “modest cost-cutting” and other minor measures, he said.

Classic.

 

[momalley81]

The only thing worse than airline executives talking about airline economics, is airline pilots talking about airline economics.

 

[On Your Six]

Six- You have to realize that SWA HAS BEEN competing with this product for some time now. I will agree that this is an ever-changing and much more competitive landscape. And I also agree that SWA needs to be able and willing to adapt. But for you to say that "NOBODY LIKES" that cattle call boarding process, or the FA's jokes, or the SWA product in general is a bit excessive. Ticket prices are all pretty much the same these days, and in many markets, SWA is not the cheapest way to get there. Yet SWA carries more pax than anyone, and with consistently industry leading customer satisfaction. Hard to argue that "NOBODY LIKES IT".

Skyboy,

SWA has never had to compete with a better product at a similar price point on competing routes. That's the point. The LCCs are scheduled to receive a huge number of airplanes in the next year or two (Air Tran has incoming 700s and Jet Blue will continue to add A320s/E190s while Skybus and VA increase their fleet sizes) and they will look for profitable routes to target. If SWA is profiting on certain routes, these other LCCs could enter those markets to capture a piece. It's bound to happen and you are already seeing competition heating up at MDW, FLL, MCO, DEN and shortly SFO. People put up with SWA because there haven't been many choices at the low price point up until now. Sure, SWA has a loyalty program, but it does not have a great international tie-up like other carriers. Up until now there really haven't been any non-Legacy choices. Given the option and travel flexibility, I'd much rather fly Jet Blue from LGB-IAD than SWA from LAX-BWI because a 5 hour flight on a crowded 700 (with a crap seat because I was in the last 30 boarding numbers) with no IFE is not a good option... Most people would agree - regardless of whether they like the SWA FA jokes or not.

Give me a break about the cattle-car boarding. Do you really like not knowing whether you will get a preferred seat or not? Really? You don't care. I bet 95% of current SWA passengers would prefer assigned seating. I actually know people who avoid SWA specifically because of that reason - if they can find a comparable fare they will select the other choice because of the anxiety created by the cattle-car boarding. Sounds funny but that's the case. SWA's lack of entertainment options on their newer transcon 737-700 flights is also a negative with other carriers providing a lot more for comparable fares.

Another big issue (as I stated previously if you read my original post) is that the Legacies are putting more E170s/CR9s and E190s into the mix at lower operating costs. I would rather fly on a USAirways E170 than a SWA 737-300/700 because the reserved seats are far more comfortable. Obviously this is not good for the pilot profession (we want more high-paying jobs), but it will impact the competitive environment. Delta is using Shuttle E170s to directly compete with Air Tran out of ATL (note ATL-MDW flights for example). Expect more use of these airplanes going forward to better match LCC cost levels.

The environment is changing and we can either ignore it or adapt. Sounds like a lot of people on this board are oblivious or they simply can debate effectively.

 

[momalley81]

Give me a break about the cattle-car boarding. Do you really like not knowing whether you will get a preferred seat or not? Really? You don't care. I bet 95% of current SWA passengers would prefer assigned seating. I actually know people who avoid SWA specifically because of that reason - if they can find a comparable fare they will select the other choice because of the anxiety created by the cattle-car boarding. Sounds funny but that's the case. SWA's lack of entertainment options on their newer transcon 737-700 flights is also a negative with other carriers providing a lot more for comparable fares.

SWA did a VERY intensive study about assigned seating out of SAN. The pax overwhelmingly voted for NO assigned seating. So, I guess you are wrong in that respect. Most SWA pax actually prefer they way it is done now.

As far inflight entertainment, until they can get a 15% ROI it aint going to happen. People still are not willing to pay more for TV's and XM radio. SWA has studied it indepth and has the data. Until they can get 15% ROI for it, they aint buying it.