Checkmate

[WNrforlife]

The industry in it's current form is kind of like a chess game. It's like this:
Southwest is playing all of the legacy carriers in the game. Southwest still has all of it's pieces. AA has a King, a rook, a knight, a bishop and a few pawns - still has a chance. United an USAir are down to a King, a knight and a few pawns - not much of chance there. Delta has a King, a knight, a rook, and a few pawns, still a chance there.

All of the other LCC's still have all their pieces, but they haven't been playing the game as long as Southwest has, so they can lose due to their inexperience.

In the case of all the legacy carriers, it's just a matter of time.

Checkmate.

 

[mweiss]

An easy conclusion to draw, but the analogy breaks down pretty quickly.

WN doesn't have all of the pieces. The single-fleet strategy has clear points of diminishing returns, particularly in the still-lucrative international markets. Yes, WN has many competitive advantages, but you overstate them.

 

[WNrforlife]

An easy conclusion to draw, but the analogy breaks down pretty quickly.

WN doesn't have all of the pieces. The single-fleet strategy has clear points of diminishing returns, particularly in the still-lucrative international markets. Yes, WN has many competitive advantages, but you overstate them.

[post="245155"][/post]​

But we are not playing in the International game. That's a completely different game - maybe like parchesi.

 

[air_guy]

But we are not playing in the International game. That's a completely different game - maybe like parchesi.

[post="245175"][/post]​

WN has oil hedges .... nothing more ... those won't last forever but will hurt

 

[WNrforlife]

WN has oil hedges .... nothing more ... those won't last forever but will hurt

[post="245178"][/post]​

You're kidding, right? Fuel Hedges? That's the only thing we have going for us?
What about one of the highest productivity rates in the industry? What about one of the lowest CSMs, without taking into account the fuel hedges? You see, our fleet commonality is just one of the many things that keep our costs down, something AA and the boys don't have.

 

[mweiss]

But we are not playing in the International game. That's a completely different game - maybe like parchesi.

[post="245175"][/post]​

Only if you consider that you can bring your parchesi pieces over to play chess. They're not separate games at all; they are very closely related.

 

[Winglet]

The industry and customers are not rational. SW and JB are cherry-pickers. Their business model IS NOT an comprehensive air transportation system, like the legacies.

The problem is that the public is purposefully ignorant about it, as are the politicians. They think that because you can go from NY to FLL for $49, you ought to be able to go from Bugtussle KY to Albany for the same price . . . or less since it's less distance . . . and "why do I have to change airplanes anyway?"

The politicians and American public have come to think of their national air transportation system as a kind of subsidized city bus system . . . . ought to be very cheap . . . only "I don't want to wait and I want to go direct."

Already the incredibly stupid and arrogant Bush administration wants to slap more security taxes on airline tickets in an industry that already on it's back and has been shown that $10 more in ticket prices is unworkable.

The air transportation system in the US cannot adjust to such wild swings in fuel prices and demand as it has seen in the last few years. It is simply too capital intensive. The government is a very large part of the problem. While touting that it's deregulated, that's substancially a lie. What the fat cats in government and industry need to do is come up with a national plan on what they want the system to look like.

As a starter, they need to:

1. Stop hording the trust fund and bring the air traffic control system into the modern age. I realize this will make the enormous deficit run up by Bush look worse. Tough.
2. Stop taxing the bejesus out of airline tickets.
3. Get an energy policy.
4. Stop subsidizing small cities that can't support air service with taxpayer money.
5. Stop giving bankrupt carriers 2, 3, or 4 chances at bankruptsy. The weak and stupid executives should be allowed to fail. Now, bk carriers get huge advantages over solvent carriers by being about to legally defraud workers and creditors out what they are owed, while at the same time artificially depress revenues to other carriers by dumping below-cost tickets in the marketplace. Sorry, but that means U and UAL. They need to go away.
6. Repeal the RLA. Airline unions should sink or swim just like any other unions.
7. PEBs need to be done away with. The President, especially this emperor we seem to have, should NOT be able to force people to work against their will. If a carrier is struck, it's not going to shutdown the whole country. PEBs are just another abuse of power on the part of the government executive.

 

[mweiss]

The industry and customers are not rational.

The industry may not be rational, but the customers most certainly are.

SW and JB are cherry-pickers. Their business model IS NOT an comprehensive air transportation system, like the legacies.

This is a shorthand that is ignorant of history. The legacies were built in the regulated days, so by the time WN and B6 had a chance to serve interstate routes the legacies were already "comprehensive." Every single legacy airline was a "cherry-picker" at one time of their lives.

The problem is that the public is purposefully ignorant about it, as are the politicians.

Or perhaps service to Paducah is not important to most people. :huh:

The politicians and American public have come to think of their national air transportation system as a kind of subsidized city bus system

Oh, really? Where's the government subsidy for the airlines?

Already the incredibly stupid and arrogant Bush administration wants to slap more security taxes on airline tickets

Right...just like those subsidized city bus systems, with all of their taxes and fees tacked onto the fares. Oh, wait...no...hmmm...is it a subsidized system or an overtaxed system? Can't be both.

in an industry that already on it's back and has been shown that $10 more in ticket prices is unworkable.

Except that it's not. The issue, as has been discussed several times before, is that fares wouldn't be raised in concert, because it's not in everyone's best interest to do so. However, putting an additional $10 tax on every single ticket would affect all airlines roughly equally.

Now, granted, it would reduce demand somewhat, which would reduce load factors somewhat, which would reduce profitability somewhat. But it's not for the reason you outline.

The air transportation system in the US cannot adjust to such wild swings in fuel prices and demand as it has seen in the last few years.

Sure it can. That's the reason WN went into hedging in the first place...to smooth out those fluctuations.

 

[mweiss]

Now, Winglet, in answer to what you think government should do differently:

1. Stop hording the trust fund and bring the air traffic control system into the modern age. I realize this will make the enormous deficit run up by Bush look worse. Tough.

Can't argue with that. If the tax is supposed to be to support the infrastructure, then spend it on the infrastructure!

2. Stop taxing the bejesus out of airline tickets.

It's not that heavily taxed. Get over it.

3. Get an energy policy.

To what end?

4. Stop subsidizing small cities that can't support air service with taxpayer money.

Um, OK. But doesn't this run counter to your suggestion that the infrastructure should be comprehensive?

5. Stop giving bankrupt carriers 2, 3, or 4 chances at bankruptsy.

This would have some unintended consequences, particularly making capital more expensive, since the risk to investors would be greater.

6. Repeal the RLA.
7. PEBs need to be done away with.

[post="245189"][/post]​

Sure. Why not?

 

[WNrforlife]

The industry and customers are not rational. SW and JB are cherry-pickers. Their business model IS NOT an comprehensive air transportation system, like the legacies.

The problem is that the public is purposefully ignorant about it, as are the politicians. They think that because you can go from NY to FLL for $49, you ought to be able to go from Bugtussle KY to Albany for the same price . . . or less since it's less distance . . . and "why do I have to change airplanes anyway?"

The politicians and American public have come to think of their national air transportation system as a kind of subsidized city bus system . . . . ought to be very cheap . . . only "I don't want to wait and I want to go direct."

Already the incredibly stupid and arrogant Bush administration wants to slap more security taxes on airline tickets in an industry that already on it's back and has been shown that $10 more in ticket prices is unworkable.

The air transportation system in the US cannot adjust to such wild swings in fuel prices and demand as it has seen in the last few years. It is simply too capital intensive. The government is a very large part of the problem. While touting that it's deregulated, that's substancially a lie. What the fat cats in government and industry need to do is come up with a national plan on what they want the system to look like.

As a starter, they need to:

1. Stop hording the trust fund and bring the air traffic control system into the modern age. I realize this will make the enormous deficit run up by Bush look worse. Tough.
2. Stop taxing the bejesus out of airline tickets.
3. Get an energy policy.
4. Stop subsidizing small cities that can't support air service with taxpayer money.
5. Stop giving bankrupt carriers 2, 3, or 4 chances at bankruptsy. The weak and stupid executives should be allowed to fail. Now, bk carriers get huge advantages over solvent carriers by being about to legally defraud workers and creditors out what they are owed, while at the same time artificially depress revenues to other carriers by dumping below-cost tickets in the marketplace. Sorry, but that means U and UAL. They need to go away.
6. Repeal the RLA. Airline unions should sink or swim just like any other unions.
7. PEBs need to be done away with. The President, especially this emperor we seem to have, should NOT be able to force people to work against their will. If a carrier is struck, it's not going to shutdown the whole country. PEBs are just another abuse of power on the part of the government executive.

[post="245189"][/post]​

Sounds like just another sour grapes, liberal rant against the Bush administration. Don't tell me you would actually have John "I voted for it before I voted against it" Kerry in office. I don't think the country could operate under the weight of his "nuance"

 

[wnbubbleboy]

The industry and customers are not rational. SW and JB are cherry-pickers. Their business model IS NOT an comprehensive air transportation system, like the legacies.

The problem is that the public is purposefully ignorant about it, as are the politicians. They think that because you can go from NY to FLL for $49, you ought to be able to go from Bugtussle KY to Albany for the same price . . . or less since it's less distance . . . and "why do I have to change airplanes anyway?"

The politicians and American public have come to think of their national air transportation system as a kind of subsidized city bus system . . . . ought to be very cheap . . . only "I don't want to wait and I want to go direct."

Already the incredibly stupid and arrogant Bush administration wants to slap more security taxes on airline tickets in an industry that already on it's back and has been shown that $10 more in ticket prices is unworkable.

The air transportation system in the US cannot adjust to such wild swings in fuel prices and demand as it has seen in the last few years. It is simply too capital intensive. The government is a very large part of the problem. While touting that it's deregulated, that's substancially a lie. What the fat cats in government and industry need to do is come up with a national plan on what they want the system to look like.

As a starter, they need to:

1. Stop hording the trust fund and bring the air traffic control system into the modern age. I realize this will make the enormous deficit run up by Bush look worse. Tough.
2. Stop taxing the bejesus out of airline tickets.
3. Get an energy policy.
4. Stop subsidizing small cities that can't support air service with taxpayer money.
5. Stop giving bankrupt carriers 2, 3, or 4 chances at bankruptsy. The weak and stupid executives should be allowed to fail. Now, bk carriers get huge advantages over solvent carriers by being about to legally defraud workers and creditors out what they are owed, while at the same time artificially depress revenues to other carriers by dumping below-cost tickets in the marketplace. Sorry, but that means U and UAL. They need to go away.
6. Repeal the RLA. Airline unions should sink or swim just like any other unions.
7. PEBs need to be done away with. The President, especially this emperor we seem to have, should NOT be able to force people to work against their will. If a carrier is struck, it's not going to shutdown the whole country. PEBs are just another abuse of power on the part of the government executive.

[post="245189"][/post]​

If this rant were a game I would call it "Trouble".

 

[imlars]

If the legacy carriers disappear tomorrow will the LCC sweep in to fill the void, becoming "new legacy carriers". Most LCC are not in the largest markets, little to no overwater flying, no lift capacity for freight or CRAFT...the list goes on. Cherry picking seems correct to me, and all ripe cherries get picked. The billion dollar profit qtrs that the legacy carriers posted were no that long ago. (2000) Every airline that thought it was on top has been toppled. History will tell. Every company has a peak. The questions is "is it sill going up, are on the down slope"?


Lars

 

[Dizel8]

"It's not that heavily taxed. Get over it."

Not heavily taxed, wow, maybe you need to do a bit of research on that one, particularily with the cheap tickets being sold these day.

7.5% per ticket, $3.10 per segment, security $2.50, Pax Facility charge $4.5 and fuel 0.05 cent per gallon. Of course, in addition we have landing fee, custom fees, Dept of Ag. fees and of course, if you manage to make a profit of course we have corporate taxes.

So on a hundred dollar ticket, the airline gets roughly $82 dollars before you start subtraction the actual cost of operations, considering the airlines arer operating on razor thins margins, it doesn't take much. Of course, now they wish to raise security another $2.50.

Collen from SWA said it best: The federal goverment makes more money on a ticket than SWA does.

 

[mweiss]

Landing fees are a tax? I guess that buying fuel is a tax, too, then.

The average tax on a ticket is 15%. It's higher than sales taxes in many states, but lower than many other taxes that people pay, including tax on gasoline.

Considering that the margins on, say, color TVs is in the neighborhood of 5%, the state and local governments make more money on TV sales than the retailers.

Perhaps you need to do a bit of research on taxation outside the airline industry.

 

[WNjetdoc]

Why do you guys let WNforlife play y'all like a chess game? He's in it for a rise and you suckers go for it every time. He's a troll and I don't think he is even employeed by WN, if he is then I think Im going to hurl.....he,he,he.