Sw's Master Strategy

AirplaneFan

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Aug 20, 2002
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As I have looked at SW's moves over the past 4-5 years I have been trying to ascertain, "what is their master strategy".

This is what I believe it to be

1) Don't knock out the major carriers

There is a benevolent and less benevolent reason for this. I think that SW is not sinister like other mAAjor carriers. They don't purposely drive companies out of business. However, by not knocking out any airline it keeps all of them weak. All the hub-n-spokes are competing for the same type of business traveler. SW purposely doesn't fly certain routes that would be profitable, but waits for the opportune time to play its cards. If NW ever goes into profitability, I would predict that SW would fly DET - BWI and DET - PHL.

SW with its code-share agreement with ATA is now a lethal competitor. Have you looked at a ATA route map. It flies to just 15 cities from Chicago and none are flown to by SW. ATA only flies to one Florida destination, Ft. Myers and one California destination, San Francisco. ATA just announced Denver - Phoenix. SW is now in one swift blow is challenging Denver (UAL), San Francisco (UAL), Minneapolis (NW), New York/Boston/Washington (U, DAL, AA, CO). If this code share works out, don't be surprised if ATA announces BWI - London.

And with its posturing on the Wright Amendment it is keeping DFW from perhaps attracting a low-fare carrier and that is keeping the costs at the airport extremely high which is hurting AA.

2) Work around the hubs

Don't go up against the majors in their hubs. Not because they can't compete, but because of the ineffencies of major's hub cities and how it translates to SW's bottom line. SW has clobbered U on the East Coast, by allowing many of its passengers work arounds to the eastern hubs. Now you can get to many points by not connecting thru PHL, PIT, NYC, CVG. If those connecting passengers have other ways to get to their final destination then by thru a hub it will over time cause the hub to be a hollow shell of its former self.
That explains the FALSE perception that SW flies to secondary markets. The only 3 secondary markets it flies is ISP, MHT and PVD. And each of those has large metro areas in its logical catchment area. SW doesn't fly to Wheeling, Greenville, etc just to be on the outer fringes of a somewhat larger market.

3) Keep your eye on the new competitors.

SW must believe that their major competition is JetBlue (that's what I believe) and perhaps AirTran. JetBlue has been going into big eastern markets (BOS, JFK, IAD) and SW did not want JetBlue to get a foothold in PHL. If there was no JetBlue, I think that SW would not have been in PHL, because it flies in the face of points 1 and 2. But SW had to rethink its strategy because of JetBlue. I don't expect SW to go into CLT and take on U there.
 

coolflyingfool

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Certainly interesting thoughts on SWA. Did you know that SWA carried the most domestic passengers in the US in 2004 and should continue to repeat as the #1 domestic U.S. airline for many years to come. I am really excited to see what SWA plans look like for 2007 and 2008. SWA is set to receive over 105 planes over the course of those 104 weeks. That is 1 plane a week for 2 years. WOW! Just my thoughts..............
 

TheDog2004

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Mar 26, 2004
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I think any 'master plan' should include avoiding the pitfalls other '#1 airlines' fell into over the years.

United was once 'domestic only' and is now on death's doorstep.

Eventually, Southwest will make a big mistake. when they do they will start to die, just like every airline does.

Eastern, TWA, Pan Am, etc. Look for United to join that list. Eventually, all airlines fail. It's just a matter of time.

So Southwest's goal is to simply survive longer than anyone else before the inevitable occurs.
 
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A

AirplaneFan

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TheDog2004 said:
I think any 'master plan' should include avoiding the pitfalls other '#1 airlines' fell into over the years.

United was once 'domestic only' and is now on death's doorstep.

Eventually, Southwest will make a big mistake. when they do they will start to die, just like every airline does.

Eastern, TWA, Pan Am, etc. Look for United to join that list. Eventually, all airlines fail. It's just a matter of time.

So Southwest's goal is to simply survive longer than anyone else before the inevitable occurs.
[post="272195"][/post]​

Eventually, 90% of major US companies go out of business or get bought by somebody else. I think that of the stocks in the original Dow only one is still around.
 

sfb

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AirplaneFan said:
Eventually, 90% of major US companies go out of business or get bought by somebody else. I think that of the stocks in the original Dow only one is still around.

That is correct, that one stock being General Electric. However, there were only twelve stocks in the original average, not thirty.
 

I'mRayFlyMe

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May 20, 2005
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TheDog2004 said:
I think any 'master plan' should include avoiding the pitfalls other '#1 airlines' fell into over the years.

United was once 'domestic only' and is now on death's doorstep.

Eventually, Southwest will make a big mistake.  when they do they will start to die, just like every airline does. 

Eastern, TWA, Pan Am, etc.  Look for United to join that list.  Eventually, all airlines fail.  It's just a matter of time.

So Southwest's goal is to simply survive longer than anyone else before the inevitable occurs.
[post="272195"][/post]​

My, aren't we seeing the glass half-empty! While it's true that most of the carriers you mentioned fell into the "pitfalls" you've described, I don't think you've done much homework in researching Southwest, its stellar track record and how its executives have made (and continue to make) decisions over the years. I'm sure all SWA Employees at all levels are also well aware that the airline industry is volatile at best, and somewhere in the back of their minds they know about all of the carriers that came and went before them.

Sounds to me like you're just sitting there chomping at the bit, just waiting for Southwest to make "that big mistake that will put them on the road to ruin". If that's the case, have a nice wait!
 

TheDog2004

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Mar 26, 2004
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I said:
we[/b] seeing the glass half-empty! While it's true that most of the carriers you mentioned fell into the "pitfalls" you've described, I don't think you've done much homework in researching Southwest, its stellar track record and how its executives have made (and continue to make) decisions over the years. I'm sure all SWA Employees at all levels are also well aware that the airline industry is volatile at best, and somewhere in the back of their minds they know about all of the carriers that came and went before them.

Sounds to me like you're just sitting there chomping at the bit, just waiting for Southwest to make "that big mistake that will put them on the road to ruin". If that's the case, have a nice wait!
[post="272453"][/post]​

Every airline that became huge and dominant at one time had brilliant leadership.

You think a Herb Kelleher comes along every year?

Just need to hire one dufus as CEO and it's over.
 

I'mRayFlyMe

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TheDog2004 said:
Every airline that became huge and dominant at one time had brilliant leadership.

You think a Herb Kelleher comes along every year?

Just need to hire one dufus as CEO and it's over.
[post="272615"][/post]​

I never said a Herb Kelleher comes along every year, but given SWA's track record if you think they wouldn't give serious thought towards future leadership you're obviously talking a lot and saying nothing. It's highly unlikely they're going to pass the baton to a "doofus" (correct spelling, BTW) any time in the foreseeable future, so by all means continue to enjoy your "wait".

One final piece of advice: it's better to be thought a fool and say nothing than to open your mouth and remove all doubt.
 

skyflyr69

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Dec 11, 2002
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coolflyingfool said:
Certainly interesting thoughts on SWA. Did you know that SWA carried the most domestic passengers in the US in 2004 and should continue to repeat as the #1 domestic U.S. airline for many years to come. I am really excited to see what SWA plans look like for 2007 and 2008. SWA is set to receive over 105 planes over the course of those 104 weeks. That is 1 plane a week for 2 years. WOW! Just my thoughts..............
[post="271817"][/post]​



shame on them for adding to the already overcapacity in the industry!

:down:
 

mrman

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Sep 10, 2002
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skyflyr69 said:
shame on them for adding to the already overcapacity in the industry!

:down:
[post="272803"][/post]​

What's shameful, they are making money, providing good transportation at a reasonable cost, and giving their shareholders a return on their investment. What's shameful?
 

KCFlyer

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skyflyr69 said:
shame on them for adding to the already overcapacity in the industry!

:down:
[post="272803"][/post]​

That overcapacity wouldn't be there if a couple of airlines closed their doors. Prior to the US/AWA merger, I would have thought those two airlines would be UAL and US, but if this merger goes thru, I believe the two airlines that shut down will be AWA and US. And when that happens, all this "overcapacity" that's been added by a profitable airline will fall short of demand - and that demand will be picked up by the surviving airlines.
 

USAir757

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That overcapacity wouldn't be there if a couple of airlines closed their doors.

True, but overcapacity also wouldn't be there if WN didn't add another flight to each route every 2 weeks. Demand doesn't necessarily follow supply.
 

uafa21

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Jul 26, 2004
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KC Flyer - I think awa and u have too much money to shut down quickly. Their CEO, Parker said yesterday that now they will have $2B and that they can stay in there with the rest of them.

What a statement! It's like I have more money to spend than you and I can last longer.