Found this interesting article about what SWA is doing to "enlighten" the Ft Worth folks on the importance of SWA flying non-stops. I'm apologize in advance to those who may find this article insensitve to the plight of those AA folks who will suffer from a smaller AA. That is not my intent.
chase
SWA Non-Stops from DFW/DAL
Posted on Sun, Apr. 06, 2003
American's loss may be a gain for Southwest
By Mitchell Schnurman
Star-Telegram Staff Writer
Southwest Airlines likes to use billboards in its advertising, and the clever signs have been plastered around Dallas and Love Field for years.
Now the No. 1 low-cost carrier has gone on the offensive to the west, painting its message on at least three billboards near downtown Fort Worth, in the heart of American Airlines country.
"Nonstop nonstops," the ads proclaim.
The Wright Amendment limits the length of Southwest nonstops out of Love, so the ad's twist isn't as on-point as in Phoenix or Houston or Baltimore.
But the billboards still have a dire message for American: The world's largest airline isn't safe anywhere, even on its home turf.
While American struggles to stay afloat, the low-cost competition keeps gaining, and it's always looking for an easy mark.
"Why wouldn't we take advantage of this opportunity?" Gary Kelly, Southwest's chief financial officer, said about the turmoil in the airline business. "We'd be crazy not to.
"Our shareholders want us to, and that's what our employees want."
American, United and US Airways have been losing billions, obsessing over bankruptcy and cutting scores of flights and staff. That has created an opening for more nimble, efficient players, even during the market downturn.
American's domestic traffic alone has dropped 13 percent in the past two years, while Southwest's is up 15 percent since 2000, when American's decline began.
Southwest isn't immune to broad economic trends; just last month, its traffic slowed sharply because of the Iraq war, although the company still eked out a 1 percent gain.
Discounters are a key reason that network carriers are in deep trouble today, so it's not surprising that the former underdogs are turning up the heat now.
They're not fanning consumer fears about bankruptcy, probably because a Chapter 11 filing doesn't carry the stigma it once did; most passengers assume that flights will go on and that the frequent-flyer miles will still count.
But healthy, low-cost airlines have other advantages: the money and borrowing power to ramp up and create a growth spurt, and the business model to sustain it during a tough economy.
While the big guys are contracting, upstarts such as Frontier, AirTran and JetBlue are posting big gains in passenger traffic and even profits on the bottom line.
It's natural for any low-cost provider to pick up market share during an economic downturn simply because customers are more worried about price. But the discounters' gains in the airline industry are more than a stage in a temporary cycle.
Their market share doubled in the 1990s, and the head of Delta Air Lines has predicted that it will double again in this decade.
If the current downturn drags on for several years, many of the giants will continue to be hobbled, creating another great growth opportunity for the discounters.
Consider Southwest during the previous industry crisis. In 1990-91, airlines were being battered by recession, war in the Persian Gulf and fears of terrorism.
Losing billions of dollars, many airlines were shrinking and slashing costs. When US Air pulled out of six airports in California in April 1991, Southwest went contrarian: It hit the accelerator, not the brakes.
"We decided right then that we were going to pick up six more airplanes," Kelly said.
Later that year, Midway Airlines went belly up and liquidated, and Southwest immediately acquired its gates in Chicago and revved up its expansion. It later added service to Louisville, Ky.; Columbus, Ohio; Cleveland; and cities in the East.
Also in 1991, Southwest began a buying binge that would add 60 more aircraft than executives had budgeted for the following five years, Kelly says.
Since then, Southwest has become the largest intrastate carrier in California, controlling about 70 percent of the market. And it's a force in Chicago.
At the end of 1991, Southwest had 124 aircraft and $1.3 billion in annual revenue. Now it has 377 planes and $5.5 billion in yearly sales.
In a similar fashion, other discounters are trying to seize today's moment. Last week, ATA started new nonstop service between Chicago Midway and Pittsburgh, where US Air has a major hub.
US Air emerged from bankruptcy last week after cutting about a third of its operations, and said it was reducing flights in Pittsburgh.
In past years, network carriers would flex their muscles when they were challenged by a discounter in a key hub. They used their cash hoards and big networks to drive upstarts from the marketplace, even if it meant eating massive losses.
At Dallas/Fort Worth Airport, American forced out Vanguard and JetAir, matching their fares and offering more flights and amenities. It did the same against Legend Airlines at Love Field, investing even more money to specially outfit planes and build gate areas.
American's cost structure was so much higher that it had to lose money on most of those flights. But it easily outlasted the new competition, demonstrating that it would go to any length to defend its fortress hub.
That worm has turned. Now it's the discounters with the upper hand and the staying power. And the stomach for the fight.
Southwest still plans to add 11 new planes this year, even after the slowdown caused by the Iraq war. But Kelly says the company could always revise that plan -- upward.
"If more opportunities open up, we'd love to grow faster," Kelly said.
That's not a threat, just fair warning.
Even if American Airlines gets its labor concessions, its worries aren't over.
--------------------------------------------------------------------------------
chase
SWA Non-Stops from DFW/DAL
Posted on Sun, Apr. 06, 2003
American's loss may be a gain for Southwest
By Mitchell Schnurman
Star-Telegram Staff Writer
Southwest Airlines likes to use billboards in its advertising, and the clever signs have been plastered around Dallas and Love Field for years.
Now the No. 1 low-cost carrier has gone on the offensive to the west, painting its message on at least three billboards near downtown Fort Worth, in the heart of American Airlines country.
"Nonstop nonstops," the ads proclaim.
The Wright Amendment limits the length of Southwest nonstops out of Love, so the ad's twist isn't as on-point as in Phoenix or Houston or Baltimore.
But the billboards still have a dire message for American: The world's largest airline isn't safe anywhere, even on its home turf.
While American struggles to stay afloat, the low-cost competition keeps gaining, and it's always looking for an easy mark.
"Why wouldn't we take advantage of this opportunity?" Gary Kelly, Southwest's chief financial officer, said about the turmoil in the airline business. "We'd be crazy not to.
"Our shareholders want us to, and that's what our employees want."
American, United and US Airways have been losing billions, obsessing over bankruptcy and cutting scores of flights and staff. That has created an opening for more nimble, efficient players, even during the market downturn.
American's domestic traffic alone has dropped 13 percent in the past two years, while Southwest's is up 15 percent since 2000, when American's decline began.
Southwest isn't immune to broad economic trends; just last month, its traffic slowed sharply because of the Iraq war, although the company still eked out a 1 percent gain.
Discounters are a key reason that network carriers are in deep trouble today, so it's not surprising that the former underdogs are turning up the heat now.
They're not fanning consumer fears about bankruptcy, probably because a Chapter 11 filing doesn't carry the stigma it once did; most passengers assume that flights will go on and that the frequent-flyer miles will still count.
But healthy, low-cost airlines have other advantages: the money and borrowing power to ramp up and create a growth spurt, and the business model to sustain it during a tough economy.
While the big guys are contracting, upstarts such as Frontier, AirTran and JetBlue are posting big gains in passenger traffic and even profits on the bottom line.
It's natural for any low-cost provider to pick up market share during an economic downturn simply because customers are more worried about price. But the discounters' gains in the airline industry are more than a stage in a temporary cycle.
Their market share doubled in the 1990s, and the head of Delta Air Lines has predicted that it will double again in this decade.
If the current downturn drags on for several years, many of the giants will continue to be hobbled, creating another great growth opportunity for the discounters.
Consider Southwest during the previous industry crisis. In 1990-91, airlines were being battered by recession, war in the Persian Gulf and fears of terrorism.
Losing billions of dollars, many airlines were shrinking and slashing costs. When US Air pulled out of six airports in California in April 1991, Southwest went contrarian: It hit the accelerator, not the brakes.
"We decided right then that we were going to pick up six more airplanes," Kelly said.
Later that year, Midway Airlines went belly up and liquidated, and Southwest immediately acquired its gates in Chicago and revved up its expansion. It later added service to Louisville, Ky.; Columbus, Ohio; Cleveland; and cities in the East.
Also in 1991, Southwest began a buying binge that would add 60 more aircraft than executives had budgeted for the following five years, Kelly says.
Since then, Southwest has become the largest intrastate carrier in California, controlling about 70 percent of the market. And it's a force in Chicago.
At the end of 1991, Southwest had 124 aircraft and $1.3 billion in annual revenue. Now it has 377 planes and $5.5 billion in yearly sales.
In a similar fashion, other discounters are trying to seize today's moment. Last week, ATA started new nonstop service between Chicago Midway and Pittsburgh, where US Air has a major hub.
US Air emerged from bankruptcy last week after cutting about a third of its operations, and said it was reducing flights in Pittsburgh.
In past years, network carriers would flex their muscles when they were challenged by a discounter in a key hub. They used their cash hoards and big networks to drive upstarts from the marketplace, even if it meant eating massive losses.
At Dallas/Fort Worth Airport, American forced out Vanguard and JetAir, matching their fares and offering more flights and amenities. It did the same against Legend Airlines at Love Field, investing even more money to specially outfit planes and build gate areas.
American's cost structure was so much higher that it had to lose money on most of those flights. But it easily outlasted the new competition, demonstrating that it would go to any length to defend its fortress hub.
That worm has turned. Now it's the discounters with the upper hand and the staying power. And the stomach for the fight.
Southwest still plans to add 11 new planes this year, even after the slowdown caused by the Iraq war. But Kelly says the company could always revise that plan -- upward.
"If more opportunities open up, we'd love to grow faster," Kelly said.
That's not a threat, just fair warning.
Even if American Airlines gets its labor concessions, its worries aren't over.
--------------------------------------------------------------------------------
