On October 27, 2003, on this board, deelmakur posted the following with regard to WN's anouncement that it would deviate from its normal pattern of avoiding congested airports with the potential to disrupt its unique turnaround procedures:
"Simply stated, what this does is drive a stake through the heart of the company's core strategy to drive yields by exploiting the enormous O&D opportunities that come with dominance in one of the nation's 5 largest markets. As a sidebar, it exposes the risk the company took by migrating customers to RJ's on routes to large cities, and hanging on to higher than average fares for traffic originating at PHL (a lesson apparently not learned in upstate NY with jetBlue). Southwest can't outboard them, but it can starve them to death."
In the December 6, 2003, New York Times, the following appeared:
"Mr. Siegel was equally frank. In the employee message, he said he expected that fares to Philadelphia would immediately drop by 30 percent once Southwest begins flights there in May....."
In all fairness, regardless of your opinion of the management quality at US, it didn't get a full deck coming in. Nevertheless, when it came to conceiving strategy for a recovery, it seems to have confused forcing revenue in what it perceived to be monopoly markets, with protecting the entry barriers in places where you are so dominant, you literally have to drive your customers away. Case in point. I am sure there are numerous times when jetBlue goes into a sell situation in which they could charge $500 and more, but they don't. They have a low fare franchise, and they know not to damage it for the sake of a quick few bucks. I notice Song does not do that, which underscores the fact that it is really run by full fare types. In early WW 2, France was lost when the enemy invaded from the woods and forests. The military leaders of that place were so sure nobody would ever do that, their defensive guns were installed in the other direction, and were built in such a way that they couldn't be turned around. Interestingly, they say the most successful leaders in business are students of history.
"Simply stated, what this does is drive a stake through the heart of the company's core strategy to drive yields by exploiting the enormous O&D opportunities that come with dominance in one of the nation's 5 largest markets. As a sidebar, it exposes the risk the company took by migrating customers to RJ's on routes to large cities, and hanging on to higher than average fares for traffic originating at PHL (a lesson apparently not learned in upstate NY with jetBlue). Southwest can't outboard them, but it can starve them to death."
In the December 6, 2003, New York Times, the following appeared:
"Mr. Siegel was equally frank. In the employee message, he said he expected that fares to Philadelphia would immediately drop by 30 percent once Southwest begins flights there in May....."
In all fairness, regardless of your opinion of the management quality at US, it didn't get a full deck coming in. Nevertheless, when it came to conceiving strategy for a recovery, it seems to have confused forcing revenue in what it perceived to be monopoly markets, with protecting the entry barriers in places where you are so dominant, you literally have to drive your customers away. Case in point. I am sure there are numerous times when jetBlue goes into a sell situation in which they could charge $500 and more, but they don't. They have a low fare franchise, and they know not to damage it for the sake of a quick few bucks. I notice Song does not do that, which underscores the fact that it is really run by full fare types. In early WW 2, France was lost when the enemy invaded from the woods and forests. The military leaders of that place were so sure nobody would ever do that, their defensive guns were installed in the other direction, and were built in such a way that they couldn't be turned around. Interestingly, they say the most successful leaders in business are students of history.
