Southwest's Crusher

L

luvn737s

Guest
Since there have been no successful attempts by existing major airlines to "re-invent" themselves into a viable WN combatant, where do you think the one who will eventually hand WN their lunch come from?

Will it be one of the current LCC's? They have enough entrepreneurial leadership and an as-yet unjaded workforce to pull it off, if heart was enough. Is there a future in the $19 fare and can one of these find sufficient capital to push it through? The one thing they need, a track record (except if you're JetBlue and have George Soros' billions behind you) and that can be both a blessing and a curse. Time yields both credibility and cynicism.

Will it be some as-yet unnamed airline which is designed soley to provide that dirt-cheap fare and hires people based on that expectation? With lots of people who only know how to eat, breath and fly airplanes, the field is fertile for such an operation.

Will it be WN itself? Will it raise it's costs to the point where heart is all they got, and that won't pay the bills, once the $19 (or $15) fare becomes the benchmark. WN got into business with a specific price point as it's principal objective. It has never done anything revolutionary, only cheaper.

Will this be it's undoing as well?
 
luvn737s said:
Will it be WN itself? Will it raise it's costs to the point where heart is all they got, and that won't pay the bills, once the $19 (or $15) fare becomes the benchmark. WN got into business with a specific price point as it's principal objective. It has never done anything revolutionary, only cheaper.

I think you hit it right on the head here. If Southwest's employees ever get it in their head that they deserve every single dime of profit (and more) from the company, and that comparable or higher wage rates than most of the competition just doesn't quite recognize all the value they bring to the company, it's all over. Good management, planning, hedging, conservative financing, etc. can only manage the other cost inputs so far.

I don't think that any of the competition has done anything particularly "revolutionary." Seat-back TV's don't strike me as being a turning point in the industry, and much of what's been made over jetBlue is just hype. Southwest's success has been due to picking the right people for its team, treating them well, and paying attention to the fundamentals of the business. They never got caught up in using revenue management to extract every last dime possible from their customers like the network majors did. They were one of the first to offer Internet booking and they did it well.

In some ways, they run Southwest like Delta used to be run back before the mid-eighties or so. They focus on the business, not "shareholder value" (which comes along by itself when the business is well-run); they treat the employees like family, and they price fairly.

So yes, the greatest threat to Southwest is itself -- just as poor management at Delta has left that company at the brink of bankruptcy. C.E. Woolman must be turning in his grave.
 
Hey bubbleboy, don't be a player hater baby, :D . Actually dude, the best thing WN has ever done was hire a stock clerk such as you. You are what makes the company run, no parts, no airline, plain and simple. I won't even mention that big @ssed fridge you assisted in bringing in today, now Brian will have something that will hold his lunch, lol.

Hey dude, if I told you that you had a nice body would you hold it against me?
 
"It has never done anything revolutionary, only cheaper."

With that one statement, you just lost your credibility.

Take a good look at the history of this airline. It's entire existence was a revolution to this industry. Up until Southwest came along, the mentality was, "Price tickets as high as we can get away with."

Southwest's mentality is, "Keep the price as low as possible, while still making a decent profit."

Costs are a always concern in this environment, but I have faith in our Employees and Leadership, that they can keep costs under control so that we remain competitive. If we need to see what happens when costs spiral out of control, then we need only look as far as USAirways and United. And don't think our Employees don't see that and aren't aware of it. Our CASM for last quarter actually dropped a fair amount, I believe.

Yes, there could always come a new kid on the block who would hand us our lunch. Such are the ways of capitalism. But in the end, it comes down to our costs. Airline seats are a commodity. And in a commodities market, the lowest price wins. In order to have low prices, you must have low costs. End of story.

So we could sit here and guess all day as to who will be Southwest's undoing, if indeed there ever is one. But I can't predict the future and neither can you. So honestly, your thinking sounds more like sour grapes than any real discussion.
 
hobbes said:
"It has never done anything revolutionary, only cheaper."

With that one statement, you just lost your credibility.

Take a good look at the history of this airline. It's entire existence was a revolution to this industry. Up until Southwest came along, the mentality was, "Price tickets as high as we can get away with."

Southwest's mentality is, "Keep the price as low as possible, while still making a decent profit."

Costs are a always concern in this environment, but I have faith in our Employees and Leadership, that they can keep costs under control so that we remain competitive. If we need to see what happens when costs spiral out of control, then we need only look as far as USAirways and United. And don't think our Employees don't see that and aren't aware of it. Our CASM for last quarter actually dropped a fair amount, I believe.

Yes, there could always come a new kid on the block who would hand us our lunch. Such are the ways of capitalism. But in the end, it comes down to our costs. Airline seats are a commodity. And in a commodities market, the lowest price wins. In order to have low prices, you must have low costs. End of story.

So we could sit here and guess all day as to who will be Southwest's undoing, if indeed there ever is one. But I can't predict the future and neither can you. So honestly, your thinking sounds more like sour grapes than any real discussion.
[post="196446"][/post]​

I agree with you hobbes. The poster is a Usair person and thats why I said they are just trolling, IMO. Their post has no legs.

You're correct about SWA's ASM's actually going DOWN and we are in the process of lowering it even more. There is lots of internal action to lower our costs. We all know fuel and employee costs have gone up but one way to balance that is to grow, which we are doing.

Those other LCC they mentioned must not be doing so great as they all lost money for the quarter.

Don't worry luvn737, SWA isn't sitting on their hands, you can believe that. Thanks for all your "concern" however, ;) .
 
I am not a fan of SWA when it comes to being a passenger. I know others who prefer SW for travel. I do not. I like my amenities. (Of course, my idea of roughing it is a motel room with a black and white tv. :p ) However, when it comes to looking at the way a company--not just an airline--is managed, operated, and marketed, as the James Bond movie theme song said, "Nobody does it better."

SWA's management manages everyday. They don't look at the profits from last quarter and assume that "thus it shall ever be; so there is no reason for us to look at improving our business. If we made a profit last quarter, we must be as perfect as possible."

SWA's management is acutely aware of the fact that they are in a customer service industry. Technically, they are in the transportation industry, but what garners repeat business for them is the service they provide. Part of that awareness on their part is that you absolutely have to have reasonably content employees on the front line providing the visible parts of that service. If you have to put up with crabby f/as who look like they wore their uniforms to bed, gate agents who ignore your requests or snap at you, and rampers who leave your bag sitting on the ramp while you look out the window at it as the a/c backs away from the gate, AND pay a higher price for all these privileges, you will soon start looking for another provider of your transportation services.

I was on an AA flight the other day. As soon as the f/as got through with the beverage service, they plopped down on their jumpseats and didn't move until time to pick up the service items prior to landing. Aside from the fact that this is a violation of company policy, it violates the FAR regarding frequent cabin checks. One of the f/as did not crack even a suggestion of a smile in over 2 hours of customer interaction. After the service, he sat on the back jumpseat between the lavs and worked on his laptop computer. When I went back to the lav, he rolled his eyes and made a BIG show of moving so I could get into the lav--as if I was using the lav just to disturb him (he didn't know I am an AA employee). Whether we like it or not, passengers remember these experiences. And, after price, they think about "Was I treated as a welcome guest, or a major annoyance?"

Whether I like SW's product or not, I have never heard a single person recount a similar experience on SW. It has happened to me more than once on a "legacy" airline--not just AA, but UAL, DL, and U as well. There was a time when if you wanted to fly from Birmingham to Dallas, you had a choice of DL or Eastern--AA didn't serve BHM in those days. Today, there are at least 5 choices for that single route--not all non-stop. Prices are comparable on all 4 choices; so, issues such as service become the deciding factor.
 
"If the employees come first, then they're happy," Herb Kelleher, Southwest Airlines co-founder is quoted as saying. "A motivated employee treats the customer well. The customer is happy so they keep coming back, which pleases the shareholders. It's not one of the enduring Green mysteries of all time, it is just the way it works."
 
You can say what you want about JetBlue.. No place is perfect by any stretch. But lets look at the recent releases from Southwest.

Looking at assigned seating.. Hmm.. Why? Don't feed me the technology part.. Bottom line, people don't like to get stuck with the middle seat if they don't have to.

Looking at a possible 100 seat aircraft.. Why?

Putting aside inflight entertainment for now. Why did SW look at it anyway? Never had it, never needed it, all of a sudden now they are looking at it.. Why?

When an airline gets big it gets less nimble.. Southwest is not the family it was 10 years ago.. Don't get me wrong, Southwest is a great place and they have the perfect business model.. But tell me if you have been there for a long time its the same place it was 10 years ago regardless of size!!

Is JetBlue the answer? Maybe.. Does a passenger like the Free TV, 36 Channels, 4 Movie offerings and XM Satellite radio coming? I don't know.. Maybe someone should ask a passenger.

I can tell you this.. I flew for the first time on JetBlue a few weeks ago and of the 156 seats 154 of them people were watching the Free TV.. Do passengers like the fares? We were full so I guess they liked something. Did they like the snack choices.. Seemed like they did to me.

JetBlue is following the Southwest model almost to a T with the exceptiong of a few things.. You get an assigned seat in advance, free TV, Snack choice and cheap fares..

So you tell me. If JetBlue is just a fad why is Southwest looking at all of the things JetBLue is doing?

Interesting quesiton isn't it.

local 12 proud said:
"If the employees come first, then they're happy," Herb Kelleher, Southwest Airlines co-founder is quoted as saying. "A motivated employee treats the customer well. The customer is happy so they keep coming back, which pleases the shareholders. It's not one of the enduring Green mysteries of all time, it is just the way it works."
[post="196541"][/post]​
 
justaumechanic said:
You can say what you want about JetBlue.. No place is perfect by any stretch. But lets look at the recent releases from Southwest.

Looking at assigned seating.. Hmm.. Why? Don't feed me the technology part.. Bottom line, people don't like to get stuck with the middle seat if they don't have to.
justaumechanic said:
Is this is a idea that Jet Blue originated?

Looking at a possible 100 seat aircraft.. Why?

Says who? I heard Jim Parker with my own ears say he was misquoted when the idea was being tossed around he stated something like," We are not going to get the 100 seat aircraft."

Putting aside inflight entertainment for now. Why did SW look at it anyway? Never had it, never needed it, all of a sudden now they are looking at it.. Why?

From what I remember at the last message to the field our options are always open to any idea. Still don't have it. Is this a dammed if you do dammed if you don't premise? If we get it we are copy cats if we don't we are unprogressive dinosaurs.

When an airline gets big it gets less nimble.. Southwest is not the family it was 10 years ago.. Don't get me wrong, Southwest is a great place and they have the perfect business model.. But tell me if you have been there for a long time its the same place it was 10 years ago regardless of size!!

Yes and no. We are bigger but people I worked everyday with are now Managers and Directors. So if I got a gripe or need help help in getting something done they are there. On the other hand if I screw up they can be perfectly frank with me an tell me what I did wrong with out going through a supervisor.

Is JetBlue the answer? Maybe..

Maybe not...[/B]

Does a passenger like the Free TV, 36 Channels, 4 Movie offerings and XM Satellite radio coming? I don't know.. Maybe someone should ask a passenger.

Is anything really Free?

I can tell you this.. I flew for the first time on JetBlue a few weeks ago and of the 156 seats 154 of them people were watching the Free TV.. Do passengers like the fares? We were full so I guess they liked something. Did they like the snack choices.. Seemed like they did to me.

[/B]What were the other 2 people doing?.....There's that "Free" term again... Very good I am glad you enjoyed your flight. Is there anything "we" can help you with?

JetBlue is following the Southwest model almost to a T with the exceptiong of a few things.. You get an assigned seat in advance, free TV, Snack choice and cheap fares..

Also you forgot to mention Jetblue hasn't paid for their aircraft maintenance costs yet. Wait until that starts kicking in. You may see the cost of watching that "free" TV be a little more expensive.
Oh and we have a snack choice Peanuts or no Peanuts. Also Maybe bring your own snack if you like.

So you tell me. If JetBlue is just a fad why is Southwest looking at all of the things JetBLue is doing?

Our mangement was looking a hedging fuel. I'm sorry I guess Jetblue thought of that too.[/B]


[post="196641"][/post]​
 
I don't think jetBlue is just a fad. I think they can be serious competition. However, assigned seating, multiple fleet types, and inflight entertainment are hardly copywritten by jetBlue, nor was jetBlue the first airline to implement them.

Yes, Southwest has looked at all these possibilities. You've spun this as a bad thing; a sign that Southwest is in trouble. Now let's talk reality.

Any airline that is resistant to change in a capitalist economy is doomed to fail. Just ask some of the legacy dinosaurs that are now fighting for their life. They refused to see the writing on the wall, so they kept conducting "business as usual." Now it's coming back to bite them, and they're having to take a good look at how they conduct business.

Southwest always has, and always will, evaluate the competitive environment to see how and if we need to make a change in how we operate. The only difference is that it wasn't necessarily reported to the press in years back. But assigned seating considerations usually came up about every 5 years, or so it seems to me.

If Southwest is looking at assigned seating, this means two things have happened:
1) Enough customers are asking for it
2) We believe we can make it happen cheaply and efficiently

Trust me...assigned seating is not to copy jetBlue. This argument has been around for years.

Now the inflight entertainment issue probably was spurred by jetBlue and all the frenzied publicity they'd gotten. The press starts asking, "So what are you going to do?" However, trust me when I say that if Southwest does ever do IFE, it won't look like jetBlue's.

The RJs are an overblown story, and were from the beginning. Once again, some journalist thinks that Southwest needs to look at RJs just because jetBlue did. Parker made a comment about considering all possibilities, and next thing you know, it's in the press that Southwest is considering RJs.

(consequently, I think adding the Embraer to their fleet is a tactical mistake on jetBlue's part, but oh well...that's their business.)

Southwest is always going to survey their environment and look at the possibilities before them. And they don't mind telling this to the press, without making any commitments. In the past several years, they've looked at changing their paint scheme and interiors, going to DFW, adding another fleet type, adding IFE, adding assigned seating, etc.

Some of these will and have come to fruition. Some won't.

So while you think us looking at our options is a sign of weakness on our part, I would submit that it's actually a sign of strength that our leadership constantly evaluates the competitive environment and the options available. Any airline that DOESN'T do that is stupid, and is doomed to extinction. But just because it works for jetBlue, doesn't mean it will work for Southwest. Our leadership is smart enough to realize that as well.

Of course, that's just my opinion. I could be wrong.

justaumechanic said:
So you tell me. If JetBlue is just a fad why is Southwest looking at all of the things JetBLue is doing?

Interesting quesiton isn't it.
[post="196641"][/post]​
 
One other thing I might add to hobbes post...fuel. In case nobody has noticed, the price of oil has risen quite a bit. Southwest is hedged (don't know about jetblue), but in time, both SWA and Jetblue will be paying closer to "market rates" for fuel. Bearing that in mind, I read an article about Ryan Air in either Business week or newsweek (short term memory is failing me here). Ryan Air is an ultra LCC...and the article mentioned that they have removed seatback trays to save weight....thus saving fuel. This is an industry where pennies make the difference between profit and loss. How much more fuel over time will an aircraft burn while carrying needless (IMHO) weight in the form of seatback TV sets? It might seem miniscule today, but tomorrow????

Then there's the multiple fleet types. I still think this is a big mistake on JetBlue's part. Early reports from the company admit that it will increase their ASM costs by 15%, although credit the marketing department by phrasing that as "CASM's will increase by a penny". When every other airline is trying to get costs down 5%, a 15% increase isn't a good sign. As their aircraft age, there will be an increase in maintenance costs. As their workforce becomes more "senior", labor costs will rise - with or without a union. And starting up a slew of new cities to be served by the Embraers won't exactly be free.

So....I don't think that JetBlue will be the threat to Southwest.
 
There are still plenty of legacy airlines to disintermediate before WN and B6 need to directly compete with each other. I suspect that they will steer clear of each other for the next few years or longer.

As for whether WN can learn a few things from B6, of course they can. They would be stupid not to. The two areas being discussed, IFE and seat assignments, play out differently depending on the length of flight. For flights of less than 2 hours (the bulk of WN's routes), pax don't have as much need to be entertained and can stand just about any seat. But for longer flights, especially 4+ hours, IFE and a preferred seat matter much more. I believe that WN knows this and has a plan to implement seat assignments in the near future. I also think that they have a plan for IFE, but will wait to bear that expense until a point when the industry shake out is further along and a higher percentage of WN's flights are of longer length.
 
TechBoy said:
There are still plenty of legacy airlines to disintermediate before WN and B6 need to directly compete with each other. I suspect that they will steer clear of each other for the next few years or longer.

As for whether WN can learn a few things from B6, of course they can. They would be stupid not to. The two areas being discussed, IFE and seat assignments, play out differently depending on the length of flight. For flights of less than 2 hours (the bulk of WN's routes), pax don't have as much need to be entertained and can stand just about any seat. But for longer flights, especially 4+ hours, IFE and a preferred seat matter much more. I believe that WN knows this and has a plan to implement seat assignments in the near future. I also think that they have a plan for IFE, but will wait to bear that expense until a point when the industry shake out is further along and a higher percentage of WN's flights are of longer length.
[post="197077"][/post]​

Just so you all know assigned seating will not happen anytime in the near future. media overplayed the report.