IT WAS JUST A MATTER OF TIME !

Discussion in 'Delta Air Lines' started by southwind, Jun 3, 2011.

  1. southwind

    southwind Veteran

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    Guess maybe Delta shouldn't be as scared as some of you would have liked !

    "Can't Call Southwest a Discount Airline These Days !"

    "High fuel prices, the end of lucrative fuel hedges and a changing route network have led Southwest to push its prices up dramatically, faster than many other airlines. With last-minute fares of more than $1,000 round-trip in long-haul markets, some nonrefundable fares over $900 and average prices in some markets higher than competitors, it's hard to call Southwest a "discount" carrier anymore.

    Southwest's average ticket price has jumped.............. 39% .............in the past five years, while the average ticket price for domestic trips for the industry was up 10%, according to the Department of Transportation."

    http://finance.yahoo.com/banking-budgeting/article/112851/cant-call-southwest-discount-airlines-wsj

    And so much for the "We don't charge you extra for bags" campaign ! Nope, we just charge you more for the ticket !
     
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  2. jimntx

    jimntx Veteran

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    You just keep whistlin' in the dark. Tell yourself, "SW won't hurt DL when they come into ATL. SW won't hurt DL when they come into ATL. SW won't hurt DL when they come into ATL." Then click your ruby slippers together twice, and you'll be in Marietta.
     
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  3. southwind

    southwind Veteran

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    One things for sure . Southwest ain't wearing the ruby slippers any longer ! But, don't just take my word for it !

    "Southwest Airlines Suck ! "

    http://www.google.com/url?q=http://www.churbuck.com/wordpress/2006/07/southwest-airlines-sucks/&sa=U&ei=FPjoTeKSKYPe0QGCtryUAQ&ved=0CBQQFjAA&usg=AFQjCNGKbbFhKB1HI24iilpiVgmt0n2nhg

    http://www.churbuck.com/wordpress/2006/07/southwest-airlines-sucks/

    http://www.moderndaydad.com/2008/05/the-new-southwe.html

    If you need any more references as to why Southwest is no longer the Belle of the Ball................let me know !
     
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  4. WorldTraveler

    WorldTraveler Corn Field

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    WN does a very good job of matching capacity to the market and thus being able to charge a premium.... but there are several fallacies in what WN says in this article...
    WN may WANT to charge more for connecting flights - every carrier does - than what it would get on the two locals - but the reality is that if you look at a number of WN hubs (they may not call them that but when you carry 50% connecting traffic, it is a hub no matter what word you use), WN carries a whole lot of low value flow/connecting trafffic in order to fill seats... MDW is a great example, esp. when you look at the NE-west coast flows... MDW is WN's largest hub for NE-west coast traffic and they have to compete for some of that low fare traffic and they do... on LGA-MDW, for example, half of WN's traffic flows beyond WN esp. to destinations in the west and southwest at average fares that are not much higher than the local LGA-MDW fare, even though the distance is much greater.... specific to ATL (WN's biggest DL challenge), FL right now carriers a far higher percentage of lower yielding conncting traffic than WN carries through its hubs...and FL uses smaller average size aircraft... the only way WN can grow WN's operation profitably given WN's higher costs is to get a much higher share of the local market... and grow it - both of which are going to be hard to do since FL has already stimulated the market with low fares and DL has more than enough capacity to keep WN from making gains.
    .
    WN enjoyed a huge advantage in the early 2000s on fuel prices and expanded considerably then - DEN and PHL were big additions to the system - possible because of fuel price advantages due to hedges... the network airlines lost their hedges in BK (part of why AA is so careful to avoid BK right now).... but WN's costs are not that much lower now...
    As you look at comparable route systems (heavy NE flying will drive up WN's costs while 738s will help reduce them) between WN and the network carriers, WN doesn't look as good as many think....
    .
    When you factor in the value of the network carrier product on longhaul flights, WN will come up at even more of an advantage.... frequent flyer upgrades aren't as valauble on a 250 -400 mile flight... but when you start competing in longhaul markets, WN will not fair as well as the network carriers with their FC cabins, upgrades, and higher quality product. You can look at the average fare differences between VX and B6 on the JFK transcon markets to see that....
    .
    specific to DL and WN's arrival in ATL, DL still is adding lots of capacity esp. with more efficient 757s that offer costs as good as if not lower than WN... DL offers a better product esp. in longhaul markets- all DL domestic mainline flights have WiFi, most have audio video, food is available even if for purchase... and DL has advance seat assignments for all passengers....

    WN will get its share of the ATL marekt -and perhaps the east coast but they will more likely look like one of a number of carriers in these highly competitive markets than they will in markets like DAL, MDW, LAS and PHX where they enjoy large market shares largely because they chose airports where there was little other service..and then offered service which was not any better and in many cases lower than what competitors offered in similar markets (DFW/ORD)
     
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  5. jimntx

    jimntx Veteran

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    And, I'm sure if I cared enough, I could google all kinds of nasty comments posted on the Internet about Delta or AA or JetBlue, or anyone else. We are in a business that attracts all kinds of people who want to pay rockbottom price, but still receive Singapore First Class amenities and service. You found 3 negative comments without even breathing hard. Now, go to any major SW operation--even STL--and look at the MOBS of people trying to get on one of their airplanes. It's not the negative comments posted on the Internet that count. It's the money rolling into the till.

    Southwest is still viewed by the majority of the American public as the airline that charges the lowest fare. They don't always, but it doesn't matter. They always charge a reasonable fare--none of this last minute walkup fare robbery that the rest of us indulge in. That translates in the public's mind as the lowest fare.

    Also, the public has no illusions about what they are going to get from Southwest. For a reasonable fare, they are going to get smiling, happy, engaged employees, clean airplanes, and transportation from Point A to Point B. AND, if it's not too turbulent a glass of Coke and a bag of peanuts. No more. No less.

    17 straight years without a losing quarter has never been (or ever will be) duplicated in the airline business. And, they returned to a profitable status a lot quicker than any of the rest of us. Deal with it.

    WT, you can post all the "logic" you want about how DL offers a better product, etc. But, keep in mind that is from your perspective as a business traveler and DL cheerleader boy. Let's wait and see what happens when WN moves into ATL in a big way. AA thought their WI-FI, and FC seats, and meal service in F/C would keep the business traveler off of WN. You should stoop to getting out of the DL club, and go to an airport where WN operates regularly and look at the number of guys wearing expensive suits and carrying laptop bags lining up to board a shorter flight. Of course, DL can beat WN on transcons. WN doesn't offer transcons, nor do they offer International service.

    However, with their 737-800s they are going to start service from LAX to HNL (or other Hawaiian destinations). Let's see how many people continue to pay the higher prices on DL and AA before we drag out our "logic" as to who's going to win the game. You're beginning to sound like those guys on ESPN who pronounce the week before the game is played all the reasons why some team can't possibly win. When that team wins, they can't bring themselves to say that they won. They just pronounce all the things that the team they said couldn't possibly lose did wrong. But, what counts is the score.
     
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  6. WorldTraveler

    WorldTraveler Corn Field

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    no one is doubting what WN has accomplished.. but what they are doing for their next act is not at all related to what they have done before...
    1. They have largely operated their "hubs" in airports that no one else flew to or if they did, they had lmited service.
    2. WN in just the past five years decided to take on UA in DEN and US in PHL... but they did it when both were in BK... all the indications that the tri-fecta that is DEN will result in F9 getting pushed out, not UA.... even though UA has allowed WN to carry almost as many domestic passengers as UA. In PHL, WN has pulled back on its growth as it found skating in a large network hub isn't as easy as they thought.
    3. Much of WN's growth through the FL merger comes to/from the east coast... which is far more heavily delay prone than the south and southwest of the US. Managing delay prone operations is costly.... WN cannot operate on the same basis in ATL as it even has in MDW where its OT is well below other carrier OT.
    4. WN has NEVER competed with a network carrier in a hub as large as ATL - cause there is no hub larger than ATL! FL's capacity amounts to about 1/4 of DL's in the domestic market.... to somehow think that WN is going to magically grow from 1/4 of the market size to a much larger size is more than dreamy... esp. when you consider that FL is carrying about 75% connecting traffic through ATL, far higher than other hubs for WN or any other carrier... and yet WN's average aircraft size is larger... so WN has to fill even more local seats because of 1. the need to reduce the percentage of flow traffic to lower levels to restore profitability (why do you think FL sold out to WN?) 2. because WN uses larger aircraft and 3. WN has to increase its market share to a size where it can effectively compete with DL - WN doesn't have a market share below 20% in any hub market where it competes with a network carrier - and WN has to do all of this while also raising fares because WN's costs are higher than FL's.
    .
    When you look at the best hub to hub matchup between DL and WN, SLC, DL's market share is unchanged in a decade.. and DL's average fares have changed with the rest of the industry. WN has NOT succeeded in growing in SLC.
    .
    DL's strategy for ATL is even more aggresisive than it was in SLC - add more domestic capacity esp. in key markets, use lower cost airplanes such as the 757 and the M80s and M90s which are having seats added to them to increase revenue at virtually no cost, and DL is virtually giving away free bags via the Amex card and to any elite member to neutralize the largest advantage WN does have.

    .
    It's not about clicking ruby colored shoes.. it's about looking at hard data and the real examples of how WN has competed in the industry... WN can spout all the marketing it wants to about what it will do in ATL, but DL is not sitting quietly, and WN has never succeeded at doing what they are trying to do in ATL where they will be just another airline that has tried to compete against DL, none of which has managed to succeed at doing so long term.
    .
    I'm quite ready to watch the contest... but I am also quite sure that WN is smart enough to accept what it can get and then go play in other places where it can more easily pick up revenue.
    Remember also that WN is still months away from being able to integrate operations w/ FL and in just a couple years, they will be able to fly freely from DAL where there is a far greater opportunity to gain new premium revenue than they can get in ATL... add in all of the potential new Caribbean/Latin/Hawaii/Canada flying and it is actually quite doubtful that WN is going to get into a catfight with a far larger DL in ATL when WN could pick up a lot more revenue elsewhere w/o having to fight so hard for it....
    finally, let's not forget that DL has the lowest costs of any US network carrier.. they are far better positioned to compete against WN than other carriers... when you factor in that AA is the highest cost carrier and also happens to have a number of key markets where WN would like to grow, I for one wouldn't go jumping up and down about how much damage WN is going to do to DL until we see what they choose to do to AA.
     
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  7. jimntx

    jimntx Veteran

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    It's not about clicking ruby colored shoes.. it's about looking at hard data and the real examples of how WN has competed in the industry... WN can spout all the marketing it wants to about what it will do in ATL, but DL is not sitting quietly, and WN has never succeeded at doing what they are trying to do in ATL where they will be just another airline that has tried to compete against DL, none of which has managed to succeed at doing so long term.
    .
    finally, let's not forget that DL has the lowest costs of any US network carrier.. they are far better positioned to compete against WN than other carriers... when you factor in that AA is the highest cost carrier and also happens to have a number of key markets where WN would like to grow, I for one wouldn't go jumping up and down about how much damage WN is going to do to DL until we see what they choose to do to AA.
    [/quote]

    I'm not jumping up and down about damage WN is going to do to DL. I could care less. I'm just tired of people like southwind finding any reason to bad mouth WN. They are a good airline. They are the best at what they do. They don't try to pretend to be anything else other than transportation from Point A to Point B. They don't have to do at ATL what you say they have to do based on the fact that they have larger aircraft. That's why they are keeping the AirTran planes (which I would have been willing to bet would be the first thing to go). I think they are going to go into markets they have not served in the past for the reason that the 737 is too large an airplane. DL Connection and AE and the like had better watch out in the coming days. I know there are a lot of markets that AA has relegated to AE because the Md-80 and the 737 were too large, but the market actually needs something larger than an Embraer or CRJ.

    And, unlike AA or DL or any other airline I've observed (and I have been on most of them), I have never run across an unhappy, crabby employee at WN. That in itself is a noteworthy accomplishment that not even your blessed DL can match. Over the years I have run across DL flight attendants, gate agents, and corporate employees that could give lessons to some of the worst at AA on how to be bitchy, rude, and unhelpful.
     
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  8. signals

    signals Veteran

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    You're claiming victory before the start of the battle :p

    Talk to us after the war, because all is fair in LUV and war B)
     
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  9. signals

    signals Veteran

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    Of course, Delta hasn't had anything negative said about them in the past two decades :lol:
     
  10. southwind

    southwind Veteran

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    What part of, " Southwest's average ticket price has jumped.............. 39% .............in the past five years, while the average ticket price for domestic trips for the industry was up 10%, according to the Department of Transportation." , do you peeps not comprehend ?

    All I am saying is SW won't have quite the advantage people though they would !
    Will DL have to compete with them? Of course.

    It was just a matter of time before SW fuel hedging was no longer a factor.

    And do you really think peolple are going to pay the same price , for a no frills flight , as they would one that wasn't ? :blink:

    Oh and BTW, no , SW doesn't charge extra for baggage..............they've already added it into the ticket price........39% worth apparently ! !
     
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  11. jimntx

    jimntx Veteran

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    Well, let's look at what the respective websites tell us.

    Trip: Dallas to Birmingham and return
    Dates: Depart - 6/18/11. Return - 6/26/11.

    Fares: $323 both airlines. (plus taxes, etc. I'm assuming these are the same also.)

    Difference: On Southwest this is a non-stop flight in both directions on a 737--which by the way on SW has the greatest seat pitch of any major U.S. airline. On Delta it is on a Barbie jet with a change of planes at MEM. Ground time in MEM, 1 hour 4 minutes to 2 hours 30 minutes depending on flights chosen. No charge for first two bags on SW.

    Advantage: SW (at least to my mind)

    Oh, and in regards to the "no frills" flight question. Exactly what frills are available free of charge in coach (let's be fair. WN doesn't offer F/C) on Delta these days. I know you can get the free glass of Coke, but do you even get peanuts or pretzels on DL?
     
  12. WorldTraveler

    WorldTraveler Corn Field

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    no one is doubting what WN has accomplished, Jim, but you seem to subscribe to the same urban legends as others - that no network carrier can compete against WN, that WN comes in and mows down the competition, and that the world is just waiting for WN to show up so they can fly WN...
    the reality paints a very different picture... but you would have to be open enough to look at facts instead of just perpetuating the same fables...
    1. WN's growth throughout its history has come largely through moving into new markets and airports and establishing new markets where none ever existed.. .that is why airports want WN to come to town.. not so they can take over routes from other carriers but because WN creates NEW passengers and markets.
    2. The most dramatic examples of where WN has grown in other carriers' large markets/hubs has been in DEN and PHL, and in both cases WN moved in while UA and US were in BK... DEN is a special case because you also have had F9 fighting for market share... DEN (domestic - US only since that is all WN serves- market share by revenue is UA 32, WN 22%, and F9 18% - and that growth of WN has come at a very high cost to UA which has allowed its share to fall to the lowest market share levels held by a network carrier in their hub and with F9 likely to become a casualty). In PHL, US has a 47% revenue share and WN has a 16% market share).
    3. If you look at WN in SLC by contrast, WN's revenue share is 16% while DL is at 59%.... even in key competitive markets such as LAX and SEA, DL has maintained ahigher percentage of passengers as well as a revenue premium...
    4. in most markets (including DEN) where WN competes against a network carrier, WN obtains LOWER average fares than the network carrier... which should tell you that there is indeed value in the network carrier model, despite the fact that there are numerous cases where network carriers use RJs in WN competitive markets. In CHI (ORD plus MDW) to MSP - which was heralded as one of WN's big new entry markets a few years ago - DL now has a 37% revenue share, WN has 24%, WN has 20%, and AA 15%... and in every case the network carriers have revenue premiums over WN.
    5. In ATL, DL has a 68% revenue share in the domestic US market (again excluding DLmarkets in which FL doesn't compete and which based on the current model WN won't compete in) while FL has a 15% market share... the multiple of DL share over FL is larger than in any other hub where WN competes... and DL does have a substantial revenue premium over FL, even in markets where the two compete head to head.
    6. Despite all of its pullbacks from Florida during its reorganization, DL maintained the top domestic carrier to/from Florida until the WN/FL merger at which time WN/FL became larger to/from the rest of the US. DL still is the largest carrier to/from Florida overall when you include int'l.

    7. If you look at the US as a whole and combine UA/CO and WN/FL's revenue shares, DL comes out with a 22% share, UA/CO has a 20.2 share, and WN/FL has a 19.6% revenue share.

    You can pick out any individual market such as BHM- DFW/DAL and show that WN fares better than DL- except that DL doesn't fly the route nonstop - and it is extraordinarily rare for a carrier another than a nonstop carrier to have the dominant revenue position.... in fact in this market WN and AA have very similar total revenue, again with AA getting higher average fares.
    If you look at markets like MDW-LGA where DL and WN flew side by side for months, DL and WN received almost identical average fares in the local market.
    Between BHM-DAL/DFW and MDW-LGA, these are just two markets where WN hasn't done any better in either total revenue or average fares than their network carrier competitor.
    .
    I'm not sure what markets you reference when you say that AA was unable to compete against WN but remember that WN was well established in STL when AA took over TW and AA also has had significant financial difficulties, exactly the model of when WN has gone after other carrier hub markets.
    .
    Again, respecting WN for what they have done is absolutely necessary.... but understanding their model - which actually has very few examples of going after a healthy network carrier - sheds light on the fact that WN is not near as likely to turn ATL into near as large of a success story as they are saying... remember that they also said that they would keep all FL cities open and now things are starting to indicate that might not be true at all as WN mgmt is waffling on that commitment.
    .
    And, yes, DL serves peanuts, pretzels, and/or Biscoff cookies on all flights, and usually the passenger gets a choice.
     
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  13. metopower

    metopower Veteran

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    Yes you do. Good comparison . Now try something were the two actually compete against each other. Maybe slc to lax or slc to phx or slc to sea. Not were it is wn vs mesaba as in your example.
     
  14. WorldTraveler

    WorldTraveler Corn Field

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    meto,
    We are thinking the same thing but let me provide the details about the specific markets you mention
    in SLCPHX (which is essentially a hub to hub market for WN and a hub to spoke for DL and US), WN has a 49% passenger market share while DL has a 23% market share and US has 18%... WN's average fares are slightly higher (about 2% higher than DL and US).... WN has 40% of the capacity in the market and DL and US each have about 30%.
    In SLCLAX DL has a 53% passenger share and 56% revenue share, WN has 36 passenger and 34% revenue share, and UA's share of both is about 5 with a fractionally higher average fare.
    In SLCSEA, DL has a 56% passenger share and 57% revenue share with again WN havng lower revenue than passenger share, indicating they don't get the quality of revenue that DL does.
    .
    So, once again, in head to markets as is typically the case throughout the industry, the carrier that has the most capacity usually has the largest share... in SLCPHX, WN has the largest share but it translates into a small revenue premium. In other SLC markets, WN doesn't offer the capacity that DL does and DL gets not only a passenger share premium but also a revenue share premium.
    .
    Not only will WN be at the greatest gap between passenger and capacity share that WN has with any other network carrier as WN takes a position in ATL, but they also have a larger revenue disadvantage to the hub carrier compared with most other markets...

    key ATL markets
    LGA - DL has a 62% passenger and 66% revenue share, FL has 24% revenue but 20% revenue share.... AA with the rest... note that DL's average fare is about 30% higher than FL's and 20% higher than AA's (who uses regional jets).
    MCO - DL 62% passenger, 65% revenue share; FL most of the rest and DL has an average fare advantage of about 23%.
    MDW - FL has 53% passenger share to DL's 47% but DL has 3% higher total revenue because DL's average fares are 15% higher.
    LAX - DL has a 70% passenger share and a 20% revenue share; DL's average fares are 20% higher than FL's....
    .
    Even in markets like MDW and FNT where FL has more service, DL obtains higher average fares.... and FL offers a first class cabin...
    .
    I still don't see how anyone who really knows the industry can believe that WN is going to come in and obtain average fares anywhere close to what DL gets or narrow the passenger share, esp. in longhaul markets and markets where DL has enormous amounts of capacity like the large business markets and Florida....
     
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  15. jimntx

    jimntx Veteran

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    I just picked a route that I travel more than once a year. Of course, in the real world I non-rev on AA to BHM, but I picked two destinations that I travel to on other than business. And, from the respective websites.

    Trip: SLC-SEA
    Dates: Depart 6/18/11. Return 6/26/11.

    Fares: DL -- $249-$556 rt, +taxes and fees (1 bag checked free)
    WN -- $249-$457 rt, + taxes and fees (2 bags checked free)

    Still looks even to advantage WN to me. And, besides, I never said that WN always had the lowest fare. There are even routes where AA beats WN on price. But, they don't have to always have the lowest fare as long as the public perceives them to have the lowest fare. And, you get all those cheerful, helpful, engaged employees as a bonus. And leather seats. And more room.

    No one has yet told me the coach frills that DL provides over WN's "no-frills flights" that would make people choose DL over WN.
     
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