Wn Considers Leaving Sea

[KCFlyer]

What's the old saying? Who- and their money is soon parted?

[post="283471"][/post]​

Legacy airlines?

 

[corl737]

...the old airport (SEA, in this case) may succumb to pressure to lower fees for the remaining airlines, thus eliminating the cost advantage of moving.

[post="283471"][/post]​

Sounds like Southwest may have done every airline a favor by calling the airport's grandious plans what they were ... a burden for the tenants! (Perhaps good guys wear canyon blue!)

From the Missoulian (Missoula, MT) paper: "Sea-Tac, meantime, is in the midst of a $4.2 billion building program. The Port of Seattle, which operates Sea-Tac, said it would consider cutting expansion plans in the face of the potential loss of all of Southwest's business and some of Alaska and Horizon's."

 

[WNrforlife]

Looks like the residents of the area are none too happy about our plans :down:

http://blog.seattlepi.nwsource.com/soundof...ves/005299.html

 

[jimntx]

If this is a SWA bluff to get SeaTac to lower its fees and it works, then good on SWA. Costs at SeaTac are a problem for all the airlines.

My concern is that over the years, I have rarely seen governmental agencies at odds with each other for very long. It's detrimental to both if the public sees that there is more than one way to view an issue. King County may have a current itch to stick it to the Port Authority for reasons unknown, but 4 or 5 or 10 years down the road when King County needs/wants the Port Authority to do something--say refurbish some docks that are on County land--well... Government agencies and the bureaucrats who work in them are like elephants, they have long memories.

And, to wnforlife...
It is unseemly to castigate the people who live near Boeing Field by calling them "treehuggers who should have thought about the noise before they moved there." In Seattle as in most large cities, the people who live under the glide path of any airport are, for the most part, people who have no other choice due to economic or social reasons--minorities and poor people. And, when most of them moved to those neighborhoods, Boeing Field was a little used airport.

Now, those with money and political power are moving to make life just a little more unbearable for those people. Oh, it's all in the name of economic progress, blah, blah, blah. But, I bet if those glide paths were over rich neighborhoods in Seattle, the County administration would be a lot less amenable to SWA plans.

You know as well as I do that this is a totally different situation from ISP. SWA had no intention of serving any of the main NYC airports--pretty much for the reasons that they now want to leave SeaTac...cost. ISP was the best they could do and still be within shouting distance of the largest market in the country. I agree with the person who posted that this might backfire on SWA. Other cities and their airport authorities may decide that SWA has started a trend--i.e., let us use this airport and we'll build the facility and give it to you.

HOU, PHX, BWI, LAS or whoever may decide to let SWA pay for any major upgrade that SWA decides that they want.

 

[ngneer]

HOU, PHX, BWI, LAS or whoever may decide to let SWA pay for any major upgrade that SWA decides that they want.

[post="283808"][/post]​

Yes, but they would also see that SWA is very serious that airports keep their costs under control. Anyway, the precedent for SWA building their own terminal facilities is already set by what they did at ISP. It's not exactly the same situation as Seattle but the bottom line is the same - investing to achieve the lowest cost.

I doubt that SWA is bluffing. However, if the folks at Sea-Tac sharpen their pencils and figure out how to shave costs to something more reasonable, there would be no reason for SWA to leave.

 

[whlinder]

I doubt that SWA is bluffing. However, if the folks at Sea-Tac sharpen their pencils and figure out how to shave costs to something more reasonable, there would be no reason for SWA to leave.

[post="283925"][/post]​

I still think there would be reason to leave. I think there is more in play here than just landing fees.

When is WN proposing for the new terminal to open and for them to move service to BFI? 2009. When do WN's fuel hedges run out? 2009.

Thanks to Southwest's brilliant fuel hedges, they have a major cost advantage for the rest of the decade (assuming fuel stays high). We hear it all the time about how Southwest would be losing money if not for their fuel hedges. Of course, without those hedges, WN would certainly have raised their fares (perhaps back to their old cap of 399 OW) and possibly even curtailed their growth. Thanks to the hedges they are able to keep their fares where they are and continue to grow in an effort to acquire a great deal of marketshare. MDW, PHL, DAL are all attempts to grab marketshare while they have an advantage. When those hedges run out and WN is paying the same price for fuel as everybody, they have to be able to differentiate themselves through either price or something else. But their non-fuel costs are creeping up as well, thanks to having the highest paid employees in the industry. They are highly efficient (as is the whole operation) which will keep their costs low relative to hub & spoke airlines, but the overall cost differential won't be as large as it is today.

Right now WN usually has their way with anyone they want, HP, US etc. But in SEA Alaska does an excellent job of competing with WN. Out of all the cities that both airlines fly nonstop to out of SEA, WN does not have a larger marketshare than AS in any of them. (This does not include Chicago since I don't know what their respective shares are, since there are more players on that route and neither were listed in the DOT report as having the largest share or the lowest fares.) WN isn't too focused on SEA right now with so much potential in PHL and trying to repeal the WA, and is contrained by the delays, but none-the-less they haven't had the same dominating effect on short haul routes that they often build out of other hubs. If they can't beat AS now, how are they going to beat AS in 5 years with less of a cost advantage?

By moving to a more convenient, less congested airport. Hey citizens of Seattle! We built a terminal and gave it to you, the taxpayers! Fly us, you won't have to sit in traffic to get to Sea-Tac, less waiting around in lines and our airport isn't congested!

IMHO fees & congestion at SEA are still the primary drivers of this move, but I believe WN's attempt to gain a competitive advantage at SEA is a huge reason why they want to do this.

 

[whlinder]

Reading letters to the editor is always fun 😉

http://seattletimes.nwsource.com/html/opin...syndication=rss

 

[corl737]

Thank for posting that Letter to the Editor from the Seattle newspaper. I appreciate reading everything I can about this issue and your addition is appreciated. 🙂


The writer of this letter is obviously entitled to his opinions but he did make one erroneous statement by saying that the airlines asked for the expansion at Sea-Tac. In truth, not every airline asked for Sea-Tac's expansion.

Sea-Tac's management (the Port of Seattle) failed miserably by assuming the egotistical position that those airlines not voting for the extra costs would easily be arm-twisted into paying. They forgot that the airport is nothing but a service provider and those customers (airlines in this case) that are not satisfied have the option of leaving.

Personally, I'd prefer to stay at Sea-Tac from an operational standpoint. However, this is a business and to remain profitable it is essential to always evaluate every option. If Sea-Tac cannot provide a competitive product moving to BFI makes sense.

(Maybe the Seattle can get a federal law restricting airline service from BFI? 🙄 )