SWA LF's continue slump

lowecur

Well-known member
Joined
Sep 14, 2003
Posts
2,317
Total Time
na
While other LCC's continue to grow at a much faster pace, SWA just can't seem to find the sweet spot on the LF front. I see they have put the midwest on sale to try and get some marketshare back. In the last quarter the emphasis has been on maintaining price and it should show in their 2nd quarter profit numbers, but Gary and Co are now starting to worry about losing market.

http://biz.yahoo.com/prnews/050706/daw009.html?.v=17
 

enigma

good ol boy
Joined
Nov 26, 2001
Posts
2,279
Total Time
>1500
lowecur said:
While other LCC's continue to grow at a much faster pace, SWA just can't seem to find the sweet spot on the LF front. I see they have put the midwest on sale to try and get some marketshare back. In the last quarter the emphasis has been on maintaining price and it should show in their 2nd quarter profit numbers, but Gary and Co are now starting to worry about losing market.

http://biz.yahoo.com/prnews/050706/daw009.html?.v=17

By your own admission, their second quarter emphasis has been on profit. You also predict that their profits will reflect that emphasis.

If profits continue to climb, what difference does load factor make? Why should a SWA pilot/employee (or any airline pilot/employee since we are discussing this on an aviation venue, not a financial one) care about load factor if they are making money with their presently achieved load factor?

I'd rather look at the numbers and say, "Wow, SWA is so well managed that they can make money with fewer pax than the other guys. Look how much MORE money they'll make when conditions improve".

Anyway, thanks for the link.

enigma
 

lowecur

Well-known member
Joined
Sep 14, 2003
Posts
2,317
Total Time
na
enigma said:
By your own admission, their second quarter emphasis has been on profit. You also predict that their profits will reflect that emphasis.

If profits continue to climb, what difference does load factor make? Why should a SWA pilot/employee (or any airline pilot/employee since we are discussing this on an aviation venue, not a financial one) care about load factor if they are making money with their presently achieved load factor?

I'd rather look at the numbers and say, "Wow, SWA is so well managed that they can make money with fewer pax than the other guys. Look how much MORE money they'll make when conditions improve".

Anyway, thanks for the link.

enigma
I agree Enigma. They definitely know how to manage their pricing and capacity. However, they are beginning to realize that it's important to maintain marketshare against those legacys and LCCs that will be a viable threat in the future. With more and more of the public using the internet to price shop, it's no longer taken for granted that SWA has the lowest fare. I think even the unsophisticated buyer that SWA has catered to is shopping around. They will need to be on their toes in order to maintain the right balance between price and loyalty.
 

lowecur

Well-known member
Joined
Sep 14, 2003
Posts
2,317
Total Time
na
chris69 said:
Belf 60-63%
I have my doubts about that Chris. I think the BELF will be 65-67%. I'll let you know when the 2nd Q numbers come out.
 

737 Pylt

Banned
Um....Floats anyone??
Joined
Jul 8, 2003
Posts
3,085
Total Time
enough
lowecur said:
I have my doubts about that Chris. I think the BELF will be 65-67%. I'll let you know when the 2nd Q numbers come out.
Can you also let me know who will get the NL wild card! I need to call my bookie!
SHEESH!
737
 
4

410dude

WOW, sounds like concessions are in order for SWA and it also sounds like they need E-jets!
 

apdsm

Well-known member
Joined
Feb 18, 2004
Posts
221
Total Time
8500
lowecur said:
but Gary and Co are now starting to worry about losing market.
Really, did they tell you that?

they are beginning to realize that it's important to maintain marketshare against those legacys and LCCs that will be a viable threat in the future.

Right, they just realized that within the last couple of months. What a rude awakening for them to finally learn the importance of market share after all these years.
 

lowecur

Well-known member
Joined
Sep 14, 2003
Posts
2,317
Total Time
na
737 Pylt said:
Can you also let me know who will get the NL wild card! I need to call my bookie!
SHEESH!
737
Marlins:)
 

SDF2BUF2MCO

Bird Nerd
Joined
May 13, 2002
Posts
7,673
Total Time
Adding
lowecur said:
While other LCC's continue to grow at a much faster pace, SWA just can't seem to find the sweet spot on the LF front. I see they have put the midwest on sale to try and get some marketshare back. In the last quarter the emphasis has been on maintaining price and it should show in their 2nd quarter profit numbers, but Gary and Co are now starting to worry about losing market.

http://biz.yahoo.com/prnews/050706/daw009.html?.v=17
So if I read in-between the lines correctly, this means demise of SWA is imminent? If I were ATA I'd get my ducks lined up and buy'em out.
 

FlyBoeingJets

YES, that's NICE
Joined
Mar 20, 2003
Posts
1,802
Total Time
>5000
lowecur said:
While other LCC's continue to grow at a much faster pace, SWA just can't seem to find the sweet spot on the LF front. I see they have put the midwest on sale to try and get some marketshare back. In the last quarter the emphasis has been on maintaining price and it should show in their 2nd quarter profit numbers, but Gary and Co are now starting to worry about losing market.

http://biz.yahoo.com/prnews/050706/daw009.html?.v=17
Bankrupt UAL Corp.'s (UALAQ: news, chart, profile) United Airlines said that systemwide traffic in June fell 1% while capacity for the month fell 3.4%. Load factor rose 2.1 percentage points to 88.1%, the company said. United's Pacific routes saw a large increase in traffic while North American routes slipped.

AMR Corp. (AMR: news, chart, profile) said that American Airlines' traffic in June rose 7.8% from last year while load factor increased 3.8 percentage points to 82.8%. Domestic traffic increased 5.1% while international traffic jumped almost 13.6%. Capacity rose 2.8% overall but domestic capacity was 0.4% lower.


You're right Lowecur, Southwest is in trouble and the Wright Amendment should be repealed immediately to bail the out. Otherwise bankruptcy may soon follow.
 

lowecur

Well-known member
Joined
Sep 14, 2003
Posts
2,317
Total Time
na
apdsm said:
Really, did they tell you that?No, Herb thinks I'm a twit! But I think maybe todays sale kinda let's me read between the lines.:rolleyes:

Right, they just realized that within the last couple of months. What a rude awakening for them to finally learn the importance of market share after all these years.
I think they are just starting to realize they can't have it both ways. Check out Jetblue and Airtrans LFs along with their growth this month. You think that hasn't got ol Herbie's attention. My guess is even AWA is kicking butt. Time to pull that Airline show, it's kill'n em.:)
 

FlyBoeingJets

YES, that's NICE
Joined
Mar 20, 2003
Posts
1,802
Total Time
>5000
UAL--RPMs North America

6,348,217 6,867,195 -7.6%

SWA--RPMs

5,432,024 4,955,951 9.6 %
 

T1bubba

Well-known member
Joined
Nov 26, 2001
Posts
317
Total Time
8K+
Lowecur,

When I saw the news release this morning with the load factor drop, my first thought was "I wonder how long it will take Lowecur to post some comment about how the other LCC's are beating us on market share?"

The answer, apparently, was about 30 minutes. Don't look now but you're getting even more predictable than usual. :)

T1
 

scoreboard

Please keep moving...
Joined
Jan 11, 2004
Posts
574
Total Time
7500
Go Lance!!

lowecur said:
While other LCC's continue to grow at a much faster pace, SWA just can't seem to find the sweet spot on the LF front. I see they have put the midwest on sale to try and get some marketshare back. In the last quarter the emphasis has been on maintaining price and it should show in their 2nd quarter profit numbers, but Gary and Co are now starting to worry about losing market.

http://biz.yahoo.com/prnews/050706/daw009.html?.v=17
This is like saying Lance Armstrong needs to ride fatser to win by an even bigger margin. Geesh...
 

FlyBoeingJets

YES, that's NICE
Joined
Mar 20, 2003
Posts
1,802
Total Time
>5000
lowecur said:
I think they are just starting to realize they can't have it both ways. Check out Jetblue and Airtrans LFs along with their growth this month. You think that hasn't got ol Herbie's attention. My guess is even AWA is kicking butt. Time to pull that Airline show, it's kill'n em.:)

You are right, seriously, that JetBlue and Airtran deserve some recognition. Good on them.
 

skykid

On Point
Joined
Jan 24, 2002
Posts
759
Total Time
6000
UAL--RPMs North America

6,348,217 6,867,195 -7.6%

SWA--RPMs

5,432,024 4,955,951 9.6 %
UAL pulled down North America about 13% and increased international about the same - a smart move in my opinion. Post your Asian numbers so we can compare those.
 

kingaira90

Well-known member
Joined
Mar 17, 2003
Posts
357
Total Time
4000
usually not the cheapest on advance purchase

lowecur said:
I agree Enigma. They definitely know how to manage their pricing and capacity. However, they are beginning to realize that it's important to maintain marketshare against those legacys and LCCs that will be a viable threat in the future. With more and more of the public using the internet to price shop, it's no longer taken for granted that SWA has the lowest fare. I think even the unsophisticated buyer that SWA has catered to is shopping around. They will need to be on their toes in order to maintain the right balance between price and loyalty.
I have to say that anytime I have been traveling between city pairs Southwest serves, they have never been the cheapest. I usually book a couple to a few weeks in advance, so I guess their real economy might be in the walk up ticket. I can usually find a ticket for a hundred or more less on cross country flights. It seems like they find the balance between price and load that continues to make boat loads of money, good for them.-kingaira90
 

Flying Illini

Hit me Peter!
Joined
Mar 9, 2003
Posts
2,291
Total Time
6000
Maybe these airlines with slumping LF's should introduce the "you pay what we pay" deal. It seems to be working for the auto industry!
 

jball2

Well-known member
Joined
Nov 27, 2001
Posts
371
Total Time
nuff
What good is market share if you lose money by having it? SWA doesn't believe in losing money just to have braggin rights on market share. I believe Delta has market share in ATL, at a loss. USAirways has it in PHL PIT & CLT -$$$. Need I say more.
 
Top