Why Do People Bash Swa?

[Muddauber]

Bottom line is that a 50-year old airline captain going through his second messy divorce is more of a liability than the average 27-year old RJ captain.

And your reference is? That is not the finding of our underwriters.

Have you actually read accident reports from say, Pinnacle or Comair?


Here are the NTSB statistics for 1995-2005.

Fatalities per million trips_/_ Odds of being killed on a single trip

Airliner 0.019 ___/___52.6 million to 1

Commuter Airline 1.72___/___581,395 to 1

Commuter Plane (Part 135 - Air taxi on demand) 6.10___/___163,934 to 1

General Aviation (Part 91) 13.3___/___73,187 to 1


Muddy

 

[BagelBaker]

It has nothing to do with the employees, I think they are great people and are very lucky. The problem is the companies approach to business is absolute cost minimalism...Do not confuse this with profit maximization. In other words SWA analyzes routes for maximum capacity increase on a slim margin. It may be the best in terms of airlines but that's because of such controlled costs. This is called the Southwest effect. If an airline is charging 20 cents a mile, SWA will go into an area and charge 12 cents a mile.

The problem with this approach is that the model assumes exponential growth if you do not raise fares. Simply put SWA will have to raise fares considerably to remain profitable as other airlines match SW prices. This is why SWA load factors have remained consistent over the years. If SW is allowed to grow untamed this is a good thing for pilots, as they pay the best salaries now. However, such growth is physically impossible, which is why, I have said SW will be bankrupt by 2009 if it continues on its current course. They would need over 1000 737's by 2009 to avoid it. They could raise fares and risk the capacity drop if other airlines do not match. Fuel going up in price would also help SW.

You do realize that Southwest has made a profit every year, right? So in the next two years, they are going to go from making a profit every year to being in bankruptcy? Your analysis of their business model if very flawed. You realize that they would have to lose about 3.5 BILLION dollars in the next 24 months for your prophecy to come true?

Your assumption that exponential growth is necessary to avoid raising fares is completely incorrect. See you in two years!

 

[YourPilotFriend]

Since SWA is at a minimal cost structure, bankruptcy is the only way to get out of the contracts to reduce cost. The Cash flow situations at the legacy's are becoming favorable enough that if fuel doesn't go up considerably, there will be no reason to adjust fares. SW growth model has reduced costs over the years, now it is starting to see a reverse trend. All SW has to do is develop a negative cash flow and it's going to be difficult if not impossible to swing the balance. As an example, AA was able to restructure out of bankruptcy because there was significant operational savings to be gained. Any change in the SW business model outside of bankruptcy would result in additional operating costs. In other words, the SW is so good it's actually a downfall.

We will see, the predicted target is 13 cents a share for 1st quarter earnings. I personally think they have no chance in hell of reaching that number. 2006 should have been a great year SW with more than a 50% advantage in fuel costs. It still missed earnings by 40%. This is due to miscalculations on the amounts of the fare increases and employee abuse of the overtime system.

 

[BagelBaker]

It has nothing to do with the employees, I think they are great people and are very lucky. The problem is the companies approach to business is absolute cost minimalism...Do not confuse this with profit maximization. In other words SWA analyzes routes for maximum capacity increase on a slim margin. It may be the best in terms of airlines but that's because of such controlled costs. This is called the Southwest effect. If an airline is charging 20 cents a mile, SWA will go into an area and charge 12 cents a mile.

The problem with this approach is that the model assumes exponential growth if you do not raise fares. Simply put SWA will have to raise fares considerably to remain profitable as other airlines match SW prices. This is why SWA load factors have remained consistent over the years. If SW is allowed to grow untamed this is a good thing for pilots, as they pay the best salaries now. However, such growth is physically impossible, which is why, I have said SW will be bankrupt by 2009 if it continues on its current course. They would need over 1000 737's by 2009 to avoid it. They could raise fares and risk the capacity drop if other airlines do not match. Fuel going up in price would also help SW.

Well, it's well over two years later. And we have far, far fewer than 1000 planes.

Care to double-talk your way out of how very wrong you were/are?

Let's hear that rhetoric! I'm sure you'll figure out a way to state that you were, in all actuality, correct, right?

 

[scoreboardII]

Holly raise the dead Batman!

But I do like your thinking, notice YPF is to afraid to come out of hiding and play, even though he lurks, oh he lurks.

 

[waveflyer]

Anyone seen Lazarus?

 

[pilotyip]

I think you should shave your beaver before the interview. And according to PilotYIP, after shaving, you should get some sun on it so as to avoid the tan line.

and the tan line will be same if you don't have college degree, because a college degree has nothing to do with a tan line

 

[Stifler's Mom]

and the tan line will be same if you don't have college degree, because a college degree has nothing to do with a tan line

It most certainly does. If you set your classes up correctly, you could be laying in the sun by noon everyday of the week.

 

[Bob_Sacamano]

Dayumm, Bro. You're still rockin' a Treo? :beer:


Oops, just saw you posted that in 07. Bit of an old thread resurrection.

Well, since we are starting meaningless threads, should I order 3 steak soft tacos or a burrito supreme and a chalupa?

Need an answer quick -- I am typing this on my treo and I am third in line.

PLEASE HELP!!!

 

[waveflyer]

Could you post on FI w/ a treo?