What happened to the low fare "leader"? Is the struggle coming?
http://yahoo.reuters.com/news/articlehybri...News&rpc=44
http://yahoo.reuters.com/news/articlehybri...News&rpc=44
High Fare Leader?
- Thread starter Borescope
- Start date
whatkindoffreshhell
Veteran
WN is not always the lowest fare.
The consumer just perceives WN's fares as fair and a value.
Plus the customer doesn't get jerked around.
Didn't happen overnight.
I haven't searched every possible city pair, but I've never found WN's walkup fare to exceed a legacy walkup fare. Never. And the WN walkup full fare is generally hundreds less than the legacy walkup full fare.
Not always the cheapest, but almost never the highest, and always very fair fares. No wonder WN is luved by millions.
Not always the cheapest, but almost never the highest, and always very fair fares. No wonder WN is luved by millions.
swflyer
Senior
For some perspective, this was in today's (2/13/07) USA Today article about the fare hike (last paragraphs):
Fares guru Tom Parsons, publisher of BestFares.com, says Southwest's price increase still rates as modest compared with what most traditional airlines have done with their prices in the past two years.
Southwest's top fare now is $339 one way for a coast-to-coast flight, vs. $299 in January 2005.
Parsons says most traditional carriers charge around $700 for coast-to-coast coach flights that, like Southwest's top fare, require no advance purchase. Two years ago, their price for such flights was $499.
That means Southwest bumped up fares by about $40 over a period in which other airlines increased them by about $200, he says.
Fares guru Tom Parsons, publisher of BestFares.com, says Southwest's price increase still rates as modest compared with what most traditional airlines have done with their prices in the past two years.
Southwest's top fare now is $339 one way for a coast-to-coast flight, vs. $299 in January 2005.
Parsons says most traditional carriers charge around $700 for coast-to-coast coach flights that, like Southwest's top fare, require no advance purchase. Two years ago, their price for such flights was $499.
That means Southwest bumped up fares by about $40 over a period in which other airlines increased them by about $200, he says.
I think it's worth noting that prior to August, 2002 Southwest's fare-cap was 399.00 so it's still cheaper than it was pre-9/11.
link to August 2002 press release
link to August 2002 press release
KCFlyer
Veteran
It must be....how can they lead in low fares without first visiting bankruptcy court? Everybody knows that this has become the "competition tactic" of the new millenium.
Now, Now, KC,
I believe [most] people know why Southwest is forced to raise their fares. [The erosion of their fuel hedges]. This is not new information.
I guess you are predicting that American Airlines will soon visit the Bankruptcy court.
KCFlyer
Veteran
Nope...I admire AA for proving to the other legacy carriers that it is very possible to operate at a profit and NOT visit bankruptcy court either multiple times or for 3 years...even though THEY also had a couple of planes involved in a very high profile terrorist attack back in 2001.
Yep...fuel hedgess are expiring...but the thing I flat out cannot understand is that many of the posters who like to point out "high fare leader" were critical of Southwest "dragging down the industry"...Yet when their own airline has spent years in bankruptcy court...slashed employee wages and benefits...dumped pensions on a government backed insurance plan...and screwed shareholders (many of them were screwing THEMSELVES)...then why on EARTH would one take pride in undercutting pricing of the very airline that supposedly "dragged down the industry". I know that if I happened to work for that particular airline, I'd be pretty damned pissed off to see all my givebacks going to pricing BELOW Southwest.
KC, Who are all these people that are taking "Pride" in under cutting Southwest's pricing ?
And yes KC, if it makes you feel better, I AM pissed off at my employer, and the Crooked Bankruptcy Court, in this Country.
But it is Southwest's Hedging Program that has allowed them the ability to "set" the price of fares in this Country.
wnbubbleboy
Veteran
Agreed.
Similar to visiting McDonald's while on a roadtrip. A Big Mac is going to taste the same in Baltimore, Cleveland, or Columbus.
The more transparent we are making your trip to your destination uneventful and consistant will bring you back.
KCFlyer
Veteran
Simple question then...if Southwest "sets" a fare of say $200 on a route, and they have these fuel hedges that are eating away profits of other airlines...what's the theory behind those airlines charging $150 for the same trip?
whatkindoffreshhell
Veteran
Nonsense. Because of their market position WN simply took advantage of a good deal to gain a profit.
Haven't you re-financed your home mortgage to take advantage of your credit and the attractive rates offered to you?
Fuel hedging PLUS many other efficient business practices give the profit edge to WN.
The posters who continually whine about WN 'only making a profit because of their fuel hedging' are not considering the big picture.
Did UA/US/DL/NW/etc go bankrupt only because they failed to hedge fuel?
boxer
Veteran
KCFlyer
Veteran
Reminds me of the guy selling silver dollars for fifty cents. When asked how he expected to make a profit, he said "Volume, volume, volume".
Nonsense ?
Then please tell me why Southwest is finding it necessary to raise fares.
Where are all these "other" business practices ? You would think Southwest would be applying these practices instead of raising fares.
Don't get me wrong, Southwest is a well managed company, but what you consider "whining" is nothing more than people being able to accept the reality that Southwest is losing it's ability to set the fares in this country, due to their eroding fuel hedges.
Southwest's "market position" is not the same as it once was.
There were many reasons why the airlines that you mention filed for bankruptcy, [1] Lousy Management [2] 911 [3]Yes, the lacking of fuel hedges to compete with Southwest in this country [4] These companies used bankruptcy to take advantage of the situation to screw over their employees and creditors.
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