Trouble ahead for Low Cost Carriers???

[General Lee]

SWADude,

You also have answered my questions. The underlying cockiness from some posters has another layer, and that is fear of the unknown. When something pops up with a negative spin, it is immediately shot down, disregarded. I can understand that, I have been in denial about Delta's problems for awhile, and now I am coming to grips with new realities and feel we should help our company. I have stated that often lately. I am sure that Southwest will do great in the future, but the competition on the LCC side will grow and most likely your new major competition for that low cost passenger will not come from the Majors (which will be feeding their respective hubs and their INTL connections), but from your peers. You won't be the lowest fare operator there----look next to you---there will be three others---and your fares will dive. I don't think we will be serving LAS-LAX, or LAS--OAK. Our passengers flying from ATL to LAS will be originating in Dothan, AL or Gainsville, FL on RJs. Jetblue, Airtran, Am West, Spirit, ATA, Virgin America, Alleigant, Sun Country, Independance, Fronteir, etc......all getting bigger. Our hubs will do just fine, and our INTL flying from JFK, CVG, and ATL will continue to make big bucks.

Good luck!

Bye Bye--General Lee

 

[SWAdude]

General,

What questions have you had of me???

Who shot down you articles you posted??

You are way off.

And who appears to be the one being cocky.

Jeeze.

 

[SWAdude]

Without going too far back.

The Generals last three thread starters-

" Trouble ahead for the low cost carriers??"

" RJ's too expensive??"

"Watchout Jetblue-SONG has a store now?"

Hmmm...I wonder what your intentions are.

Strong case of denial. You ARE the pot calling the kettle black.

I signed my first post to you "Respectfully" I am beginning to wonder if that was appropriate.

 

[chase]

In defense of the General

I've read many of General Lee's opinions/post & while some of them are filled with opinions (my opinions come through on most of my posts also) they are also filled with interesting articles & other factual information from other sources.

The original premise is good & worth debating (respectivefully) & that is what happens when more LCCs compete for the illusive traveling dollar? Will legacy airlines be able to charge a premium (10-30%) above what other LCC carriers charge to generate the necessary revenue to cover their higher seat costs?

My own take is that SWA will continue to gain market share in areas in which they compete against legacy carriers. Our fares are part of the reason but quite frankly from my own experience & from talking to travelers, the difference in customer service is a factor also. Simple things still make a difference.

For example, you're a frequent flyer with SWA, you call to make a reservation (most do it online but say they don't) & you speak immediately to a human voice that clearly understands you. Friendly, courteous, easy to understand.

Take the same scenario & say it is Delta. As relayed to me by a DAL res agent, the same type of flyer is connected to the new 800 res center in INDIA (the call center was opened as others in the states were being closed, probably not US industry wage standards there though General) & after a short wait is speaking to someone who may have difficulty understanding the request & in turn maybe difficult to understand. Are your highest paying customers receiving the BEST service considering the prices they are paying? Same source told me the complaints are on the rise & callers are avoiding the phone number & calling the regular number & waiting in line with everyone else. This defeats the original purposes. Not to imply that only DAL has long waits on the phone but I've called United also & had a busy signal during rush times. A minor point but when the first contact with a company is unplesant it can be difficult to change perceptions about one's experience.

I've seen DAL make the move to put folks in front of the counters helping folks get to where they need to go as they are getting their tickets. A great idea...don't wait for the folks to come to the counter, get out & greet them. However, just as SWA has an excess of folks right now, what is DAL's ratio of employees to airplanes? This can be good indicator of overall costs & where trends are going. The same came be said for all carriers.

Customer service is key to getting folks back. SWA doesn't have a lock on it but it certainly has reputation for having it. Riding on vans with other aircrews it has become obvious to me there are many crews from other carriers that are bitter, upset & simply unhappy. How can I tell? Just the lack of interaction between the crews themselves & between them & our crews is what I'm basing it on as well as the discussions with the ones who WILL talk to SWA crews. They say that things are tough, moral is low, work rules are becoming more like "SWA" (which is viewed as a negative) & therefore they aren't as happy. An unhappy workforce presents unique problems that last a long time. Remember the last time you had a waiter at a restaurant with an attitude? Did you want to go back? Probably not.

Others who post on here are apparently very happy with working at legacy carriers. That is great. My ancetodal evidence is that the majority of folks I encounter from legacy carriers aren't. What does that translate to IMHO? An unhappy workforce. That translates into poor customer service IMHO. There are thousands everyday who do portray a positive attitude but my experiences indicate the number of discontents are on the rise. It may not be but my gut feeling is that it does. Obviously open to debate & disagreement.


There are many other reasons why I think legacy carriers will contiue to loose shares to LCC but this is just one. I've rambled on enough about customer service. Many other reasons, future debt, fuel hedging, technology, winglets, retirement of --200s, etc. why I think, at least for SWA, our chances of surviving & in fact thriving in a more LCC competition era. SWA has been down this road several times before & has had a tendancy to do well. A track record like that provides a simple roadmap for a repeat of past successes as long as we don't take the one thing for granted, our customers & employees!


Continue the healthy debate but it is best to read all of these posts on here with the emotional light switch turned off. If your kids & wife are still talking to you, why worry about anything else? cheers

 

[SWAdude]

"In defense of the General "

Traitor

Very well said.

SWAdude

 

[General Lee]

Chase,

Thank you for being a part of this thread. My question though was asking what will happen to the LCCs when they start competing against eachother, not necessarily the legacy carriers. The legacy carriers have the hub and spoke system primarily, and their feed from their RJs come mostly from cities that do not or will not have LCC service. Peoria, Des Moines, Dothan, Valdosta, Grand Juction, Sun Valley, Jackson Hole, Halifax, Fayettvile, Pasco, Monroe, Bozeman, Madison, etc......there are plenty of cities that cannot support Southwest or Jetblue with their required 5-10 flights a day, and unfortunately those people will have to pay more to fly through hubs. Now, my question to you is "What will Southwest do when Jetblue gets all of their A320's and Emb-190s, ATA gets all of their 738's and 757-200/300s at MDW, Spirit gets their new A320s (or other new aircraft) and competes from ORD or DTW, Airtran gets all of their new 73Ns and 717s and competes with you out of BWI and PHL, Virgin America sets up shop somewhere like LAX, etc.....How will Southwest handle that?" That was my question. Thank you for participating.


SWADude,

Maybe we are getting off on the wrong foot. I was amazed that you and Spank jumped on me for displaying two articles that gave a negative view on possible future events. If I actually believed everything the media said in all of the bad articles I have read about Delta lately, I would be constantly crying in the closet.
I then posted a simple question about what Souhtwest or some of the others would do when the LCCs do expand. I welcome your viewpoints, and I had hoped that you would have stated, "I think Southwest will do fine because......." That is your opinion, and it is valid. I did not write these articles, and I really didn't comment on them much. The questions I put in the thread titles really came from the articles. If I ever made comments, I tried to back them up with quotes or some sort of facts that any of you can question at any time. This is an open forum, and I enjoy it.
I actually sided with you on your comments about the SW flight attendants, and praised your crews. I made the original comment, you responded with a good argument and facts, and I agreed. Sorry for the hard feelings.

Bye Bye--General Lee

PS--the thread "Watch out jetblue--Song has a Store"---I was making fun of Song. I couldn't believe they had a STORE now...

 

[side stick-n]

SWAdude,

Don't let GL get to you. This is him at his best. It's sometimes humerous to read his post and replies and you may agree that if ALL of DL employees had his drive, they probably wouldn't be in the position they are.

General, this started as a good thread and some interesting points. I agree with SWAdude concerning some of your post. They do tend to gloat on other airlines negative press. However, I think I understand your stance though I may not agree with it. I think it would make you very happy for ALL the LCC's to cease to exist. (though I think your human enough to wish it could be done without the loss of jobs) I might feel the same if in your position. A job with a MAJOR network carrier that you probably dreamed of working for as a kid. Now the only problem is that the company can't make ends meet and it probably makes you nervous. If the LCC's weren't such a PITA, Delta and the other "big" carriers would be doing fine. You and I both know the LCC's aren't going away and will continue to grow. In fact, within the next 10 years the tables could be turned. The LCC's may just become the largest airlines with the network carriers primarily doing international. As you have pointed out, that seems to be the only place they can make any money.

As for the articles I have read concerning jetBlue and the other LCC's, one of the things I have read is that "cost" are increasing and that is the reason for the lower operating margin. I don't believe this to be the case and believe this to be an error in reporting. JetBlue CASM is not increasing in large numbers but RASM is decreasing. This is a result of lower than normal ticket prices not an increase in cost. The 4th quarter report could prove me wrong but I believe you will still see the CASM in the 5.9 to 6.2 cents range. I think it's amazing to see how the market reacts from a drop in 3- 4% margin estimate. I could understand if it went from 4% to 0 or negative numbers but we're talking about double digit margins in an industry that is LOSING. On the other hand, it might be a good time for those that would like in to take advantage of the low price. I know I did!

Take care,

stickN

 

[SWAdude]

General,

I didn't intend to sound like I was jumping on you. I had more of a feeling that your intentions were of a more informational nature. But there seemed like there might have been a tone of instilling fear in some of the members. I was actually trying to have you clarify your position. We all know this industry is frightening enough the way it is.

There are mostly pilots on this forum that are dreaming of getting our jobs or waiting for the phone to ring to get asked for class. This means they are junior and feeling vulnerable. Many have been unemployed for quite some time with tremendous stress that can be alleviated with some hope. I've been there and don't want anything to dampen that hope for them. I know you would agree there is no need for this.

This medium can very one deminsional and be difficult to understand ones intentions.

Please don't try to crash my hard drive.

SWAdude

 

[MedFlyer]

General,

You seem to be missing the point. The LCC's aren't going to spend a lot of money/resources attacking each other, when they've got lame duck legacy carriers they can pick off instead. Why would Airtran go head to head with WN on a route like BWI-IND when they can just pick off DL routes like ATL-DEN, ATL-LAX, MCO-DFW, etc.

There are small markets that will never see WN/JB. But these markets don't generate that much revenue. In fact, if these small markets did so well by DL, why is DL cutting back service to so many of them? DL has substantially reduced capacity to many of these smaller markets, despite there being no low-fare competition.

The fact is that DL generates the bulk of its revenue from flying people in big cities to other big cities. There's some international and small town traffic thrown in the mix too, but its not the majority. As an example, DL generates almost 25% of its revenue from the state of Florida, but I guarantee you most of that revenue doesn't come from GNV or EYW. It comes from the big markets like MCO,TPA and FLL.

It is this big city flying that is under assault by the LCC's.

 

[CoopDog]

Just jump'n in here

As an example, DL generates almost 25% of its revenue from the state of Florida, but I guarantee you most of that revenue doesn't come from GNV or EYW. It comes from the big markets like MCO,TPA and FLL.

MedFlyer,

Are you sure about this? If so, please call the folks at USAirways and let them know. It was always my understanding that U could never make much money out of these 3 cities...even though the planes were always packed. Hence they reduced service out of these cities substantially this past year.

But hey, that's U for ya. The corporate philosophy always was to do the exact opposite of what made sense.

Man, I sure do miss the original Piedmont. They were such an awesome airline....good 'ole boys with a lot of darn good common sense.