SWA to offer inflight wireless Internet access

[Noserider76]

I think what you are wanting the airlines to do is illegal...something about price fixing.

OK, thank you Reverend. Now back to reality. Let's look at how industry pricing really works and, is it any different than 3 gas stations on a corner having identical prices? I'm saying the big oil companies and refiners are making billions upon billions and the airline industry has always had ultra-thin margins. We need to find a way to gain pricing power for all our sakes.

 

[mdf]

I understand but will an additional $5-10 each way stop a person who's paying $3.50/gal of gas from flying? Who knows. I guess that's why the marketing gurus make the big bucks.

I know they have it pegged at what they can, and can't do price increase wise. From what I hear it's pretty tight.

 

[huronip]

Southwest CEO Gary Kelly, during the carrier's first-quarter earnings call last month, said it would solicit requests for proposals to offer inflight wireless Internet access. Kelly said Southwest is seeking to outfit a prototype with such service within the next nine months. A Southwest spokesperson would not say which companies the carrier would solicit in its requests. Kelly noted the move is part of a larger Southwest strategy to seek new sources of passenger revenue.
Southwest is exploring new add-ons and revenue streams that don't "create hard feelings from our customers," vice president of marketing, sales and distribution Kevin Krone recently told Business Travel News. Krone said Southwest would avoid following other airlines in monetizing offerings that currently are free.
"What else can we add of value that customers would be willing to pay for?" Krone said. "What we don't want to do is convince ourselves that Coke actually is an add-on."

I would say it's not going to be free.

 

[UALjan15]

I'm wondering why SWA doesn't seem to participate in raising fares when the opportunity comes up. The last few attempts at raising have been rolled back. All airlines have a similar cost structure now and it's not like SWA is making much of a profit.

I may be guilty of drinking a little cross-company kool-aid here, but I don't think SWA tries to maximize the fare that they can charge. To the contrary, I think that they charge as little as they can to cover their costs and still turn a reasonable profit. They certainly HAVE been raising fares, and will have to continue to do so as their fuel hedges return less $$.

I think that this business approach also explains why my stock in SWA hasn't earned me a cent in the last 4 years.

 

[LarryinTN]

SWA has been raising fares. 12 to 18 months ago the maximum one-way fare was $299. Today it's up to $329. Discounted fares have also risen significantly. Flights that a year, or so, ago had fares in the $89-$94 range now are frequently in the $150 range. Ding fares are also running a lot higher than they were a year ago.

 

[GuppyWN]

I think that this business approach also explains why my stock in SWA hasn't earned me a cent in the last 4 years.

Pleeeaaaaaaaaasssssssse. You're so full of crap. Actually the stock hasn't done a dang thing since summer 2000. Get your facts straight. :crying:

Gup

 

[igneousy2]

I agree with UALjan. SWA business model has always been to charge a small margin on top of their operating costs. I think there are several reasons...

1. They have created a brand that people associate with rock bottom fairs period! Many people don't even shop around, they just go straight to swa.com or pick up some really sweet deals with their new "ding" utility. Consumers trust that the fares SWA charges are "fair". When SWA enters a market the consumers rejoice because the years of "raping" by the rest of the airline industry comes to an end. If consumers started to feel that SWA was increasing fares just because it could...then all this would go away and SWA would be just another airline.

2. Why should they care about the rest of the industry? Having low fares and the reputation for the lowest fares pressures the rest of the industry. The rest of the industry cannot grow as much as they would otherwise because LCC's - especially SWA keep the margins thin...while they, SWA marches steady with 8-9% growth a year. None of the Legacy carriers would have had any growth had it not been for increases in their international flying. SWA is kicking butt domestically. Why should they let the rest of the industry up for air.

Two other points...

why does your stock suck?

stock prices move when there is a change of some sort. LUV has been flat mainly because it has been soldiering on...8-9% every year, like clock-work. This growth is already priced into the stock. Price fluctuations in SWA stock have more to do with negatives...people start saying stuff like "they can't beat a legacy in directly in their hub (BWI, PHL)", "they can't make a profit without their hedge", "they are running out of places to go", the stock price goes down a little...nothing happens-pundits are wrong...the stock price goes back to where it was...basically it's too boring, it's like microsoft until recently, making crap-loads of money but the stock does nothing.

the more interesting thing in the conference call...

2009 international service launch...no mention of where - I bet CUN is on the short list...this will be a blood bath for the majors.


Later

 

[mule]

basically it's too boring, it's like microsoft until recently, making crap-loads of money but the stock does nothing.

http://finance.yahoo.com/q/bc?s=MSFT&t=my&l=off&z=l&q=l&c=luv

I get your point...just giving you a hard time...

 

[UALjan15]

Pleeeaaaaaaaaasssssssse. You're so full of crap. Actually the stock hasn't done a dang thing since summer 2000. Get your facts straight. :crying:

Gup

Oooooookkkkkkkkaaaaaaaayyyyyyyy wise guy, enighten me on what I said that was so far off base. At least Igneousy2 took a couple of minutes to add something to the discussion. If you don't have anything to add, just lurk.

As for my facts on the stock performance, how would you know how long I've owned the stock? Well, since you have no way of knowing, I'll tell you....4 YEARS. In that time, it hasn't earned me a cent, which is exactly what I said.

You apparently like banging on the keyboard, so why don't you give me an insider opinion on why "the stock hasn't done a dang thing since the summer of 2000?"

 

[capt. megadeth]

I'm wondering why SWA doesn't seem to participate in raising fares when the opportunity comes up. The last few attempts at raising have been rolled back. All airlines have a similar cost structure now and it's not like SWA is making much of a profit. In the above quote the marketing VP wants to create new revenue streams, but how about charging the customer a bit higher rate for the ticket instead of subsidizing the high cost of fuel for him?
We can all be profitable or we can all plod along, because no company will be allowed to have a price advantage on competing routes. SWA is not making much with prices where they are now. No slam here, just wondering why airline companies don't cooperate and prosper as the oil companies seem to have done.

Good post.