This is the new Southwest

[Big Slick]

[FONT=Tahoma, verdana, lucida]Southwest – Grow or Stumble[/FONT]
[FONT=Tahoma, verdana, lucida]Competitively, Southwest is the most fearsome carrier in existence going into 2006. [/FONT]
[FONT=Tahoma, verdana, lucida]Not because of its strengths, which are considerable, but because of its weaknesses. It has a challenge with labor costs. It has a challenge with a no-frills product that is starting to look frayed compared to other LCCs. It has increasing competitive pressure not only from restructured legacy carriers, but more dangerously from other LCCs. It's got a gaggle of new airplanes coming on line at a time when other LCCs are starting to get expansively frisky, too.[/FONT]
[FONT=Tahoma, verdana, lucida]The point is that Southwest has vulnerabilities. What will make it a fearsome competitor in 2006, however, is the fact that it's fully aware of these weaknesses, and is likely going to employ very different strategies and tactics as it moves to resolve these challenges. [/FONT]
[FONT=Tahoma, verdana, lucida]That means it's going to change and adjust from its past modus operendi. Big time. Inevitably, a lot of its competitors will miss this, to their detriment.[/FONT]
[FONT=Tahoma, verdana, lucida]More ASMs Needed. Just Make Sure There's RPMs To Match. Expansion is paramount for WN. It knows that the erosion of its fuel hedges over the next three years leaves it vulnerable to other LCCs and legacies with lower labor costs. The point is that Southwest needs to grow to spread its costs over more seats. That also requires that there are people in the seats, which means that the airline can't risk opening many more alternative airports such as Manchester. [/FONT]
[FONT=Tahoma, verdana, lucida]The New Southwest Effect: Nail The Competition. It also means that they can no longer rely solely on "the Southwest effect," which generates new passengers via low fares. [/FONT]
[FONT=Tahoma, verdana, lucida]See, low fares are no longer the exclusive province of Southwest - they're now the norm. That means that Southwest will need to go after other carriers' existing market share. No more Mr. Nice Guy - Southwest will need to go for its competitors' jugular.[/FONT]

 

[radarlove]

Is this another "Boyd read the paper again and has to tell us what he thinks" articles?

 

[Big Slick]

[FONT=Tahoma, verdana, lucida]Which is the reason (as we predicted) Southwest has stated that it's targeting Charlotte. It's a lynchpin for the new US Airways revenue stream. Zap it, and it could hamstring the combined America West/US Airways program. Weaken them at CLT, and it could weaken them at other WN-competitive points, such as LAS and PHX. [/FONT]
[FONT=Tahoma, verdana, lucida]Other than Charlotte, which is a competitive imperative for Southwest to take a shot at America West/US Airways, from here on in the chances are that expansion points will be ones where they'll have to take existing traffic from incumbents. Denver's an example: most markets there have already been fare-stimulated, and adding a lot more seats, whether it's by Southwest or Air Fred, won't do diddly by itself to generate substantial new traffic. More than ever before, Southwest will need to win over passengers on the basis of more than just low fares.[/FONT]
[FONT=Tahoma, verdana, lucida]And that's their weakest point. Great people, yes. Great service, yes. Competitive product amenities, no. Denver's an example. Frontier and United offer advanced seat assignment, which is no minor issue. Both offer in-flight entertainment - United on most flights, Frontier on all mainline flights. Southwest offers neither.[/FONT]

As noted above, it's a new competitive world for Southwest, one over which it no longer has a great deal of control. How they do at Denver could be a bellwether. Competitively, they are up against two strong incumbents, and the "Southwest Effect" will be limited mostly to the results of short-term intro fares, because most large Denver markets already have low csot service.

Bullseye on Frontier: Take it to the bank: Southwest is likely trying to take Frontier out. No, not exist as one happy family. This is the new Southwest, one that cannot afford to be competitively carnivorous.

 

[FlyingGuy]

I'm new here so I'm going to ask what is probably obvious to everyone else: what does "WN" stand for?

 

[johnnyV]

WN is just another 2 letter identifier for Southwest. Some of our tail numbers are 404SW, some are 383WN. No big deal.

JV

 

[Bringupthebird]

Southwest has flourished only where other carriers have given up or do not exist. When US dropped out of BWI - WN steps in. When PSA pulls out of socal - WN steps in. When AA pulls back from STL - WN steps in. They build markets in MHT, PVD, etc. where no other carrier has a sizeable presence. In other markets PHX, LAS, FLL MCO, they coexist with other carriers, but have not run them off. They have yet to take an entrenched incumbent and cause them to fail.

While they are formidible, they are not invincible.

 

[Cheesemo]

Bird

I agree with you, SWA is not invincible, far from it. It's a tough business. But you need to review the last 15 years of SWA's growth. UAL shuttle's sole purpose was to drive SWA out of the west coast market. It obviously didn't work. US Air trimmed its BWI operations AFTER SWA began its major growth there. The other cities you named have significant SWA marketshare, but a passenger volume that allows for several carriers to compete favorably. Boyd makes some good points...occasionally...but has an axe to grind with SWA as of late.

Cheers

 

[SWA/FO]

Boyd is a homo. He has UA stock.

 

[jetalc]

Boyd is a homo. He has UA stock.

Another insightful post from the SWA/FO Hall of Wisdom. You really don't like it when someone rains on your little Peanut Parade, do you? Yep - we get it - you like where you work. Great. What a putz.

 

[SWA/FO]

jetalc,

We get it, you work at Fontier but you like reading Southwest posts. You want to work here, you want to be happy, and you want to help rain on my parade. What a a$$ (I don't use that putz term). :smash:

 

[Andy]

Boyd is a homo. He has UA stock.

ROTFLMAO! If you think that Boyd's being rough on Southwest, you need to read what he's said about United. Homo is right; he's practically on his knees sucking on Kelly and Kelleher's nether regions. OTOH, he enjoys kicking Tilton in the family jewels.
If you consider this article to be raining on Southwest's parade, you have a very warped perspective of the world.

 

[fam62c]

Southwest may not be "all that" and I agree that they will have some challenges in the future as the hedges fade and their costs rise but I wouldn't bet against them. They are still the best managed airline on the planet. They are the best at what they do and they are smart enough to stick with what they are good at and resist the urge to be all things to all people. They have a history of consistent profitability and continuous expansion through both good times and bad that is unmatched in this industry. Look at JetBlue for comparison, it didn't take them long to add a second fleet type and start to lose money. LUV keeps it simple and simple works; they take the same simple blueprint and apply it in lots of locations.

If things get tougher for LUV people better hope that they don't start to specifically target other carriers for destruction because they have the muscle and the cash to do it.

 

[SWA/FO]

ROTFLMAO!

Andy, what does all that mean? You didn't take typing in high school or what? Now you defending tilton? I thought you guys (at UAL) hated him?

 

[Andy]

Andy, what does all that mean? You didn't take typing in high school or what? Now you defending tilton? I thought you guys (at UAL) hated him?

OK, I forgot my audience. (Think second grade comprehension).

In simplistic terms, Boyd has shown no affinity toward United. This article on Southwest is glowing in comparison to the stuff he writes about United.

My mistake for taking your obvious homoerotic fetish and using the CEOs of each company as representative of those companies. I foolishly thought that your plebeian brain could process this analogy. I overestimated your intelligence quotient.

 

[firstthird]

I love how bigslick has posted excerpts from the same wee + old Boyd article about 5 times so far. Give it a rest already.

And, is there anywhere that once could get Boyd's old predictions, i.e. 5 or 10 years ago. He always said that he's been against RJs from the beginning, I think it'd be interesting so see if he has selective amnesia and was one of the chorus singing the praises of the next big thing in aviation.

 

[FlyBoeingJets]

...homoerotic fetish...

I can't believe I'm reading this brokeback thread.

I'm outa here.


From Stripes -

"If any of you homo's touch my stuff...I'll kill you

Lighten' up Francis"

 

[Tejas-Jet]

Southwest has flourished only where other carriers have given up or do not exist. When US dropped out of BWI - WN steps in. When PSA pulls out of socal - WN steps in. When AA pulls back from STL - WN steps in. They build markets in MHT, PVD, etc. where no other carrier has a sizeable presence. In other markets PHX, LAS, FLL MCO, they coexist with other carriers, but have not run them off. They have yet to take an entrenched incumbent and cause them to fail.

According to my history books....PSA had already been aquired and merged into US Air in 1988. The US Air West Coast cutback happened in 1990-1991. Thats when WN capitalized on that market. As I recall, the US air cost structure wouldn't support what the west coast consumer was willing to pay for a ticket.

In STL, WN already had a presence there before AA took over the TWA operation. Ever since the AA cutback in operations there, SWA has remained pretty steady....and has not added too many flights in STL.....but they do now fly STL-DAL. )

I really don't think that WN has a strategy to "cause an entrenched incumbent and cause them to fail." WN sees opportunity, where others don't, for whatever reason....and they take advantage of opportunities to make profits, no matter where that might be.

They also have a management team that is always planning ahead. Even with their current profits, there has been some cost cutting going at WN for the last few years. The SWA CEO, Gary Kelly, is really looking close at every dollar that is spent....and if it is spent, he is the one that wants to know why.

Tejas

 

[flyguppy]

SWA pulls route from DEN already

I thought it interesting to find out that SWA was pulling a route in DEN already. DEN-SAN going to 1 day/week service.

My, that was quick.

 

[Falcon Jet 1]

it was always one day a week service.

 

[flyguppy]

it was always one day a week service.

Ah, you're right! I thought they were dropping down to 1 day/week service.

Turns out that they are pulling out of the N/S DEN-SAN COMPLETELY.

Thanks for the clarification.