SWA operating expenses higher than competition

[MALSR]

I just heard that AirTran has lower operating costs than SWA now. There's a whole bunch of bankrupt carriers coming out of chapter 11 soon as well. Where do people see SWA in 5-10 years?

 

[Hutchman]

Looks like a good time for all the other airlines to get a payraise. I know SWA is wishing for it.

 

[MALSR]

Looks like a good time for all the other airlines to get a payraise. I know SWA is wishing for it.

Thats just it, they already hold the bar really high.

 

[Non Union]

I see people prefering airlines with meals, movies and satellite radio instead of the no-frills Southwest flight. I also predict people will avoid Southwest because of the amount of stop-overs required to get to their destinations. Price will be about equal between the airlines, since all the legacies have cut costs.

Also, pilots will have other options with other airlines, so Southwest will have a tough time getting qualified applicants. Why fly a 737 for SW bouncing around Texas for 4 legs, when you can go to CAL and fly one leg to Rome?

Tough times ahead for Southwest. The business model is flawed.

 

[GogglesPisano]

I see people prefering airlines with meals, movies and satellite radio instead of the no-frills Southwest flight. I also predict people will avoid Southwest because of the amount of stop-overs required to get to their destinations. Price will be about equal between the airlines, since all the legacies have cut costs.

Also, pilots will have other options with other airlines, so Southwest will have a tough time getting qualified applicants. Why fly a 737 for SW bouncing around Texas for 4 legs, when you can go to CAL and fly one leg to Rome?

Tough times ahead for Southwest. The business model is flawed.

You just can't resist stirring the pot. imp:

 

[MALSR]

Price will be about equal between the airlines, since all the legacies have cut costs.

Due to internet bookings, all airlines charge the same fares from one point to the next (say, MSP-ORD or SFO-LAX) ...so it comes down to who has the lowest costs in order to make a profit.

 

[Non Union]

You just can't resist stirring the pot. imp:

Hey Goober. Seriously, you are in CAL training, right? Things are looking good at CAL as well as all the legacy airlines. Don't you agree?

Southwest's days are numbered at being the premier airline to work at. And fly on, too.

 

[GogglesPisano]

Southwest's days are numbered at being the premier airline to work at. And fly on, too.

Since you are a CEO with an MBA, why not give us a professional analysis of this topic? Feel free to use the balance sheets of the carriers in question, and reference each carrier's RASM, CASM, ASM's... P&E's, market caps, 10-K's should be referenced as well.


No plagiarism now. :laugh:

 

[SWA GUY]

I see people prefering airlines with meals, movies and satellite radio instead of the no-frills Southwest flight. I also predict people will avoid Southwest because of the amount of stop-overs required to get to their destinations. Price will be about equal between the airlines, since all the legacies have cut costs.

Also, pilots will have other options with other airlines, so Southwest will have a tough time getting qualified applicants. Why fly a 737 for SW bouncing around Texas for 4 legs, when you can go to CAL and fly one leg to Rome?

Tough times ahead for Southwest. The business model is flawed.

I like this guy....he's a funny guy!

 

[Mr Hat]

Tough times ahead for Southwest. The business model is flawed.

Yeah it is! I mean 35 years of straight profitability quarter by quarter.....Totally flawed, totally. I mean really, Airlines aren't supposed to make money right? And Southwest has never furloughed a pilot?!?! What the hell is that? Their pilots are actually HAPPY?!!? How can they even call themselves an airline!?!
Airlines are supposed to be dark dismal places where people react to situations rather than try to avoid situations. Your job is always on the line and just when you think you finally made it to the big time, they smash you with concessions and lousy work rules. If you go to Southwest, your gonna miss out on all that action. What a boring life knowing that your job is stable, your making good money and the company actually cares about you.

 

[Mamma]

Why fly a 737 for SW bouncing around Texas for 4 legs, when you can go to CAL and fly one leg to Rome?

quote]

I don't like crossing the pond. It is boring. I would rather do 4 hops through TX and be home for the evening. Not everyone thinks flying to Rome over and over and over is a great gig.

 

[skiandsurf]

Southwest's days are numbered at being the premier airline to work at. And fly on, too.

Was SWA ever the premier airline to fly on?

 

[MALSR]

Yeah it is! I mean 35 years of straight profitability quarter by quarter.....Totally flawed, totally. I mean really, Airlines aren't supposed to make money right? And Southwest has never furloughed a pilot?!?! What the hell is that? Their pilots are actually HAPPY?!!? How can they even call themselves an airline!?!
Airlines are supposed to be dark dismal places where people react to situations rather than try to avoid situations. Your job is always on the line and just when you think you finally made it to the big time, they smash you with concessions and lousy work rules. If you go to Southwest, your gonna miss out on all that action. What a boring life knowing that your job is stable, your making good money and the company actually cares about you.

35 years? Legacy carriers have been around for more than 80. What you are describing is no different than what the legacies went through in the 1990s and I think SWA will experience the same rise and fall due to operating costs- not because they have "never furloughed a pilot," etc. I have nothing against SWA, that's just my opinion is all.

 

[Bringupthebird]

SWA must be looking for ways to innovate to lower it's costs or add value. Anything less would be the beginning of the end.

("But we've always done it this way"- Legacy Airlines)

 

[clickclickboom]

The 10 year cycle is just starting over again.. Now the Legacies are in destroy mode they will spends hundreds of millions of dollars with the expectation of running everyone out of business and continuing to spend spend spend on planes, gates, pilots, infrastructure etc etc

Running in parallel you have the labor groups that are fighting for their pay and benefit increases which they will slowly get of course it is going to cost the airlines hundreds of millions in pay, work slowdowns, sickouts, ( NWA goundcrews blocking gates etc) Strike Committes ( United already set for 2009?)

Next throw in the EU/US Open skies chipping away at the legacy profit margins in the coming years

Throw in a little terrorism and middle east instability and the next round of concessions, givebacks, bankruptcies, and management golden parachutes are just around the corner.

 

[Mr Hat]

35 years? Legacy carriers have been around for more than 80. What you are describing is no different than what the legacies went through in the 1990s and I think SWA will experience the same rise and fall due to operating costs- not because they have "never furloughed a pilot," etc. I have nothing against SWA, that's just my opinion is all.

Southwest is not insulated from furloughs or bad times. Their record and history shows an airline that is forward thinking. They have avoided pitfalls and those pitfalls are a many.
35 years of straight profitability is quite different from the fact that the late 90's were a good time for the legacies. It was only in the early 90s that they weren't doing so good. The 80's were a mess. I'm not saying that the legacies won't be around but that 10 year cycle continues....Something Southwest hasn't historically been affected by. Times are a changing but if I had to place my money on an airline that will be ahead of the curve and change as necessary with the times....it will be Southwest.

Just to be sure, I also have nothing against the legacies. They are fine airlines with a rich history....some richer than others. However for someone to come out and say "Southwest is screwed up, their time is coming. The legacies is the place to be" is rediculous. If your not going to try to go to Southwest, great, more room for me to get in but you can't deny Southwests accomplishments which are many.

 

[firstthird]

This thread started as a statement that airtran's costs are lower. Until someone finds some proof that their casm is indeed lower (especially adjusted for stage length) then most of this thread is spitting in the wind. Lots of airlines claim that their costs will be lower at some point in the future, but most have not followed through due to various reasons.

We at SWA know that we are not perfect or immune to market forces and do our best as a company to do what is necessary. That being said, just because 'its a ten year cycle' 'their time is coming' etc, isn't an argument. Our success has depended on keeping our costs the lowest and being able to stimulate growth in underserved/overpriced markets. Even some of our recent moves (DEN, PHL, IAD) fit this since they were overpriced if not underserved.

There are lots of reasons that SWA has been successful and we all know them. Some may be less of a factor in the future. But as long as we're running 11 pilots to the plane and other LCCs are running 14 (last number I saw for B6 although I don't have a link) that tells in our favor. As does the lack of reliance on true hubs (JFK, ATL, PHX, PHL, CLT) to cite our LCC competitors hubs. We do run mini-hubs through our flightcrew bases but the difference is that if MDW is snowed in, all the flights just skip it and the only people inconvienced are the ones going to or from MDW. Now if JFK or ATL get screwed up for B6 or Airtran, pretty much their entire system gets delayed. The flip side is they have access to the O/D traffic of New York and Atlanta that we don't. There is a price for everything.

 

[canyonblue]

Southwest's days are numbered at being the premier airline to work at. And fly on, too.

I think this says it all...............

Ratings: MBA. No flying experience

And even more, he is stupid enough to pay $10 to flame-bait on a pilot forum. You have no idea what an MBA is, you can't get one at a Community College. uke:

 

[MALSR]

This thread started as a statement that airtran's costs are lower. Until someone finds some proof that their casm is indeed lower (especially adjusted for stage length) then most of this thread is spitting in the wind. Lots of airlines claim that their costs will be lower at some point in the future, but most have not followed through due to various reasons.

The thread also started by saying:
"Where do people see SWA in 5-10 years?"

 

[Donald]

People have been saying " Southwest's days are number" since the company started. One big difference is our management team and employee attitude. Our management team is incredibly innovative and know how and where to make a buck. Also, our management teams and work groups enjoy their jobs and work very well together. Its not "Us vs them" at SWA

 

[Donald]

The thread also started by saying:
"Where do people see SWA in 5-10 years?"


Correct. In 5 to 10 years, I see SWA a larger yet still profitable company getting ready to take delivery of their first 787. Management and the individual work groups will continue to work together and make any necessary changes to stay profittable

 

[SWA/FO]

I see people prefering airlines with meals, movies and satellite radio instead of the no-frills Southwest flight. I also predict people will avoid Southwest because of the amount of stop-overs required to get to their destinations. Price will be about equal between the airlines, since all the legacies have cut costs.

Also, pilots will have other options with other airlines, so Southwest will have a tough time getting qualified applicants. Why fly a 737 for SW bouncing around Texas for 4 legs, when you can go to CAL and fly one leg to Rome?

Tough times ahead for Southwest. The business model is flawed.

"kids...uh, drugs are bad...marijuana bad....alcohol bad"
- Southpark

 

[ASADFW7]

The interesting part is people think SWA will stand still. They created the industry segment and other businesses are trying to match them. Leadership does make that much difference. People do make that much difference. Only when all the leadership and people who have made it what it is are gone will they be the same as everyone else. I do not see that happening soon.

 

[~~~^~~~]

What SWA has to counter its costs is real efficiency from its rational operation and productivity from its workers. (I'm wondering how efficient it is to have seven different management teams, maintenance departments, GO's, training departments and pilot groups flying Delta airplanes that range from 40 to 76 seats out of one hub - ATL)

I keep hearing rumors of SouthWest taking a 700, or perhaps a new type, across a large body of water. Any truth to that?

 

[puddlejumper101]

if anyone expects that SWA will just stand still and do nothing is absurd. SWA has made money in good and bad times. Right now times are decent...maybe even good for this industry...so SWA is not the focus...but when the cycle dumps on itself...we shall see who is still standing. I don't get how airlines in bankruptcy or just coming out of bankruptcy can do all of these things they plan on doing and expect to be ok. They might be ok in the short term...but it does not take much in an industry so heavily dependent on the world economy and current events for it all to come crashing down. Legacy carriers have never ever saved a buck for hard times...SWA will evolve for the times...no one said SWA will make the most money every time but they will find a way to make money. This industry is one bad day from a meltdown...we all know that...SWA knows that...but for some reason I don't think legacy carriers ever plan for that.

 

[JetFumes]

if anyone expects that SWA will just stand still and do nothing is absurd. SWA has made money in good and bad times. Right now times are decent...maybe even good for this industry...so SWA is not the focus...but when the cycle dumps on itself...we shall see who is still standing. I don't get how airlines in bankruptcy or just coming out of bankruptcy can do all of these things they plan on doing and expect to be ok. They might be ok in the short term...but it does not take much in an industry so heavily dependent on the world economy and current events for it all to come crashing down. Legacy carriers have never ever saved a buck for hard times...SWA will evolve for the times...no one said SWA will make the most money every time but they will find a way to make money. This industry is one bad day from a meltdown...we all know that...SWA knows that...but for some reason I don't think legacy carriers ever plan for that.

Exactly! When the house of cards falls, SWA will still be there, doing its thing, like it has been doing for years.

 

[captain dad]

New Swa Ad Will Bring In More Business

http://www.thatvideosite.com/video/4212

 

[My Man SMITH!]

I commend SWA for remaining profitable through all of these difficult times. A testament to the leadership's ability to adjust and make sound business decisions. Kudo's to you guys. I hope it continues to remain positive so we can all strive for better pay and benefits.

 

[pilotyip]

SWA has raised prices three times in the last year, and is looking at a fourth. Since 2000 the labor costs as a % percent of gross reciepts has gone from 36% to 42%. No intent to flame just a posting stats.

 

[HAZ-MAT]

Higher operating expenses... sure okay, but I'm still getting $59.00 tickets to where I need to go on SWA... and I don't have to connect thru ATL. And AirTran doesn't go to BDL. The meal service is just a hassle sometimes I think... SWA should do what Delta Express used to do... Have a lunch cart outside the plane at the gate, you want something, reach in there grab a snack and get onboard.