Competition in the Skies: Is Delta the Problem, or the Solution?
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robbedagain
Veteran
of course if any one of us said the same exact thing regarding DL it would be all wrong and there would be mile and a half long post about why its wrong and all
WorldTraveler
Corn Field
- Dec 5, 2003
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I'm clearly getting you frazzled.....
WN isn't what you want to believe it is and what it was for years... it is a domestic legacy airline and is actually now at even more of a disadvantage given that the big 3 have int'l route systems.
WN has a domestic network and costs that are marginally lower than the big 3.
WN is doing everything they can to try to find a protected niche. While the big 3 have spent deregulation learning how to compete against other carriers, WN continues to fight to be able to have unique markets where it doesn't have to.
WN's experience in ATL and PHL shows they don't do near as well competing against healthy legacy carriers as you want to believe and precisely why the article says that consumers are best served by making WN compete with anyone in the skies.
WN isn't what you want to believe it is and what it was for years... it is a domestic legacy airline and is actually now at even more of a disadvantage given that the big 3 have int'l route systems.
WN has a domestic network and costs that are marginally lower than the big 3.
WN is doing everything they can to try to find a protected niche. While the big 3 have spent deregulation learning how to compete against other carriers, WN continues to fight to be able to have unique markets where it doesn't have to.
WN's experience in ATL and PHL shows they don't do near as well competing against healthy legacy carriers as you want to believe and precisely why the article says that consumers are best served by making WN compete with anyone in the skies.
At least SWA doesn't have to file for BK, lay-off employees, cut jobs, pay and job security in order to learn how to compete against other airlines. Guess they all learned the hard way, where SWA was smart enough to control cost thru-out and maintain. Even now with all the other airlines that are out of BK and including AA when they come out of BK, SWA's cost will be lower. There is only a few airlines out there that have the same or better cost than SWA. I just read an article that the CEO of Allegiant said their cost revenue to fly passengers are right there with SWA's, and Allegiant is considered ULCC. Yes the cost from legacies to SWA's is getting a little closer, as it should be after decades and decades of give backs at legacies carriers, BK's, some have had more than one this time around, and therefore yes they are getting closer in cost, BUT, after all that they are still not below SWA's cost now are they???
BTW WT, you keep a heavy eye on that international flying you brought up and watch the fares come down when SWA hits the markets where there is no other LCC. It's called the Southwest Effect, and it will go internationally just as it did domestically here in the good ole USA.
AdAstraPerAspera
Veteran
swamt said:
What intl markets is WN planning to expand to where there isn't already an LCC?
CUN, PVR, the rest of Mexico, all of the Caribbean, they all have had LCC service already, for years. B6 and NK fly all the way to South America.
Is WN planning to announce HOU-GRU soon?
WorldTraveler
Corn Field
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I fully expect that WN's average fares will go up and they will pick off some of the top markets and still make an impact even if other airlines have been in the market already.
The whole reason for growing into int'l markets is because the fares are higher and there is room for the WN effect.
But it doesn't change that the WN effect in domestic markets has all but been eliminated because WN is not the lowest cost producer and other carriers under cut WN (a prime reason why WN wanted to eliminate FL who kept stepping into WN markets). Further, the domestic market is just not growing but the int'l market - including near int'l - is growing.
You go ahead and brag about the fact that WN hasn't filed for BK and has posted profits the size that it has.
Just don't forget to mention that WN's business plan has nearly always been to find unserved markets which WN could dominate and which other carriers could not enter.
Look at nearly every major WN hub/focus city and see how much service other carriers have compared to WN.
WN got gutsy in the early 2000s and entered DEN with its fuel hedge profits, the market is still very divided 10 years later, and WN realized they aren't going to get into another lengthy market share battle with a legacy airline again.... which is precisely why they backpedaled very quickly in PHL and ATL.
And it also explains why WN doesn't want anyone messing with its party at DAL.
The WN you work for does not have the desire or ability to go into major other airline hub markets and dominate them. The history is overwhelmingly against that type of behavior and as much as WN has convinced the DOT and others of its benefit to the public, they have yet to demonstrate they can really compete head on with the biggest players in the industry in those carriers' largest markets.
And then look at PHL and ATL and
I am not privy to the future international schedules of SWA. Yes, I believe, so far, that SWA is going international where current LCC's are already serving, however, after 2015 and beyond there will be new routes added that will be announced that other LCC's do not serve. Sorry Ad, that I cannot answer your question more directly and accurate, but it will come, I promise that...
WOW WT. Glad to see you admit that the, WN effect, as you state, rather than the actual statement of the "Southwest Effect" internationally will in fact take off. It will happen, it is coming, you can deny it all you want to, just wait...
WT stop trying to blame SWA for doing a very big business decision for fuel hedging in the 2000's for an excuse for other airlines not to make profits. ALL the other airlines had the very same choices to do the very same thing, IF they wanted to, but they all chose not to, or could not do for the mere fact that they did not have the credit to do so. Does this include your airline, Delta, you bet it does. Why didn't Delta chose to take advantage of all the fuel hedging like SWA did all those years? Too bad, A day late and a dollar short for Delta huh???...
eolesen
Veteran
- Jul 23, 2003
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Seems to be just a bit hypocritical for one to criticize WN's fuel hedging, yet also heap unending praise over the refinery purchase...
WN expanding their international reach is a matter of when, not if. They've got a couple of prerequisites, the least of which is completing the integration, but also having the facilities to support it.
Once the FIS at HOU is ready, I'd expect things will start move.
WN expanding their international reach is a matter of when, not if. They've got a couple of prerequisites, the least of which is completing the integration, but also having the facilities to support it.
Once the FIS at HOU is ready, I'd expect things will start move.
WorldTraveler
Corn Field
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I have said it all along... perhaps if you would take your hands off your ears you would hear that I have said that it is precisely because the domestic market is stagnant and that WN's costs are not much lower than their legacy peers that the WN effect won't work.
The whole reason for going to the near int'l market (Caribbean/Latin) is because the fares are higher due to longer flights and less competition.
Of course WN will stimulate some new traffic. B6 and other carriers have proven that it can be done - and they have run AA out of many markets in the process. That is exactly what WN hopes it will be able to do with its more central/southwest US market strength which other low fare carriers including B6 do not have to the same degree as WN.
who said anything about BLAMING WN? no one is blaming WN for having the financial strength going into 9/11 that they were able to hold onto fuel hedges which the legacy carriers had to dump as their finances deteriorated.
What I have said is that WN benefitted to a very great degree because of its fuel hedges and it grew because of them, including growing into other key airline hub markets such as DEN.
However, WN was hoping that F9 would have died years ago - and tried to buy them to make it happen - but F9 is still there but UA's share loss has leveled off.
With average fares at DEN well below other large markets, WN is in no business to launch into another hub raiding exercise, which is why they ran with their tail between their legs from PHL and ATL.
WN doesn't have the fuel cost advantage it once had and in fact has had higher fuel prices than DL who has used hedges and the refinery to push down fuel costs and US who has not hedged.
Now, IIRC, Parker has said that AA will not hedge or reduce it dramatically (correct me if I am wrong) which means that new AA could be subject to huge fluctuations in fuel prices but also means that if large parts of the industry decide that hedging is not worth the risk (US got burned by hedging in 2008) then DL's ability to produce its own fuel at lower costs than the market becomes an advantage that WN can't duplicate.
"we up the bar today and then we will up it again tomorrow."
Fact WT, you have stated that the SE is no longer around or experienced.
Fact, That is not the way you stated in your previous rant about SWA's fuel hedging, go back an read it.
SWA makes it crystal clear when going into new cities and puts it in local publications of the cities they fly to that SWA will stick around for ever as long as the local folks fully support SWA being there. In other words, if SWA doesn't make money SWA will pull the flights, simple as that, just business.
Fact, That is not the way you stated in your previous rant about SWA's fuel hedging, go back an read it.
SWA makes it crystal clear when going into new cities and puts it in local publications of the cities they fly to that SWA will stick around for ever as long as the local folks fully support SWA being there. In other words, if SWA doesn't make money SWA will pull the flights, simple as that, just business.
Yes E agree 100%. Once the facilities are completed in HOU, the international flights will start to move. Sometime in 2015. Pretty darn sure you will see international flights added as we start receiving new aircraft 2015 thru 2017 and beyond. But even for the international flights, SWA has stated that they just can't get the airplanes soon enough.
