Southwest Affect still working

[WorldTraveler]

this is exactly what I have been saying. WN's network is being concentrated at smaller airports and with fewer system flights.

http://finance.yahoo.com/news/fitch-southwest-airline-realignment-may-165600842.html

The planned expansion of services follows recent slot acquisitions at Reagan National Airport and LaGuardia Airport and the anticipated expiration of the Wright Amendment later in October, which limited flights of more than 56 seats from flying nonstop from Dallas' Love Field to other airports in the region. In our view, these changes indicate the carrier remains focused on expanding in larger markets such as New York, Los Angeles, Chicago Midway, and Denver.

In the near term, this could mean a decline of flights to smaller markets the airline has served for decades. We believe additional alignments of this kind will continue as Southwest maintains capacity controls across its fleet and stays on course with its ongoing integration of recently acquired AirTran airlines.

 

[eolesen]

VX's customers seem willing to pay a little more for the upscale product, which is why feels they're able to charge more. The question is whether or not they're going to attract enough customers at those higher prices...

 

[Glenn Quagmire]

If you're going to make the claim, please use the proper terms... Effect is a noun, affect is a verb. Effect is the result, affect is an action.
An effect is creating by affecting. Clear?....
Southwest's pricing affects the behavior of others, resulting in the Southwest Effect.

That explanation affected my understanding of how the "Southwest effect" is an effective way for LUV to affect the marketplace.

 

[SharoninSAT]

That explanation affected my understanding of how the "Southwest effect" is an effective way for LUV to affect the marketplace.

Now that's funny!

 

[swamt]

swamt,  I saw on www.virginamerica.com/vx/fees  its got a list of fees..   quite interesting.

WOW!  Holy crap all the fees.  Good luck at beating SWA at LF VA.  Thx for that link Robbed, I now see a better picture of what the flying public is complaining about, and I don't blame them at all...
 

VX's customers seem willing to pay a little more for the upscale product, which is why feels they're able to charge more. The question is whether or not they're going to attract enough customers at those higher prices...

Agree. And i don't think they will be able to, but only time will tell...
 

That explanation affected my understanding of how the "Southwest effect" is an effective way for LUV to affect the marketplace.

LOL!  Great post Glenn.  Just gotta LUV this stuff...

 

[WorldTraveler]

VX manages to get average fares at or above the level of the legacies even in markets where WN is at least a crosstown option (such as from Chicago) so the notion that fees will hurt VX is a little far fetched.

Further, WN does collect its share of fees - including for oversized/weight/excess as well as some types of change fees. If WN collected no fees at all, there would be a point but the only difference is that WN has chosen to put the fee line in a different place than other carriers.

Since every carrier including VX has certain passengers/fares that are exempt from certain fees, the effect is even smaller.

VX's ability to succeed at DAL is a function of their staying power relative to WN's. Given that WN has relatively little ability to add extra capacity that would be needed if fares were reduced, the notion that WN can drive VX out of the market is overblown.

IN order to force VX out of the market, WN would have to shrink its presence in other markets or limit its ability to grow into new markets.

VX will be a nuisance to WN and for the first time in a multi-airport city, WN will not only have direct competition on multiple top markets at its own hub but also by all 3 of the legacies from the sister airport.

Dallas is a big city but the level of competition will be much more like what exists in BOS and NYC - and that doesn't bode well for either AA or WN's ability to dominate the market any longer - and validates exactly what the DOJ was trying to do by ensuring that new competitors had the ability to succeed in the market.

 

[robbedagain]

np swamt..  I went to vx website and did a lit searching..   I too thought its quite a bit of fees...   but I guess it could be like NK or Allegiant..  I thought may be either one of them would have also gone into DAL

 

[swamt]

np swamt..  I went to vx website and did a lit searching..   I too thought its quite a bit of fees...   but I guess it could be like NK or Allegiant..  I thought may be either one of them would have also gone into DAL

Yes.  We were hearing of Spirit putting in for it.  
Don't get me wrong we too have some fees, but no where near the amount you showed from VA.  One fee that SWA will always stay away from will be the change fees.  Also, IMO, I don't see the bag fees holding out past 2015, but time will tell.  If the passengers stay as loyal as they are now or even more SWA will be able to stay away from bag fees.  

 

[eolesen]

Note that the fees vary by fare type, which is the point in showing the way they did -- it gets people to consider buying up to avoid change fees, especially if the difference in the fare winds up being less than the change or bag fees.

One of the factors why you don't see the bag or change fees at WN is SAAS. It's certainly a great marketing campaign, but in the end they've turned a negative into a positive.

Once the upgrade to Amadeus is done, WN will have the capability to add fees as they see fit, including fare and FQTV tier specific. That's not to say they will, but they could.

 

[robbedagain]

swamt  once FL is finished Dec 28 will the FL bag fees disappear with it?   I look fwd to flying SWA Aug 18 BWI-MCO   itll be my first trip on them and im takin my son to wdw!  I know a few of my coworkers have flown on them and all have said they love flying SWA

 

[swamt]

I am pretty sure the fees will revert to SWA's current  fees.  It seems like SWA is leaning more and more to staying away from bag fees as it draws in more customers.  As long as our load factors are up and high I don't think we will see bag fees for a little longer than I suggested before, if we do at all...

 

[robbedagain]

thanks swamt 

 

[SharoninSAT]

I am pretty sure the fees will revert to SWA's current  fees.  It seems like SWA is leaning more and more to staying away from bag fees as it draws in more customers.  As long as our load factors are up and high I don't think we will see bag fees for a little longer than I suggested before, if we do at all...

 
You're right swamt, after we're completely integrated there will be no checked bag fees for the first 2.
My personal opinion has always been to allow only 1 free checked bag,
not 2 (size and weight restrictions apply) and keep the carry-on
policy as it is (1 carry-on and 1 personal item). I think eventually SW will
change the policy to 1 checked free. We'll see… 

 

[swamt]

I agree with you Sharon.  1 checked for free, then charge half of what the other airlines charge for 2nd, 3rd and beyond.
I read once where the average cost to fly a bag, assuming they follow the weight restrictions, is around .07.   So my question is why are the baggage fees so high at other airlines?

 

[Glenn Quagmire]

  So my question is why are the baggage fees so high at other airlines?

That is because people are willing to pay it. When people decide they will not, then the fees will drop. Of course there is the tax avoidance on the part of the airlines.

"The government funds a large portion of the aviation system through a 7.5 percent tax on the price of a commercial airline ticket as well as taxes on certain kinds of aviation fuel. But the Treasury Department considers charges outside the base cost of a ticket to be exempt from that tax.
For several years, lawmakers have been aware of untapped — and growing — add-on charges, but so far, they haven’t made any moves to change the tax regime. For the airline industry, which generally dislikes anything that raises the price of a ticket, the idea is a nonstarter.
But as revenues from the fees grow, and airlines get less and less of their income from base fares, it may be only a matter of time before Congress moves — particularly with talk of a tax overhaul in the air."

Read more: http://www.politico.com/story/2013/06/baggage-airline-fee-revenues-draw-tax-scrutiny-93073.html#ixzz32jo73id8