21 Apr 2003 | Steven Garrity said...

The same is happening up here in Canada. The big fat airline, Air Canada has been granted bankruptcy protection. In the middle of this, the CEO of our little economy airline, WestJet went on TV and basically said that AirCanada is doing something horribly wrong, and it doesn't have anything to do with Sept 11th - as his little airline was doing fine.

21 Apr 2003 | steve said...

Southwest (and JetBlue, &c.) can be profitable because they don't play in the same league as the big carriers they don't service most major cities, don't go international, and simply don't fly as often. Their business model wouldn't scale well if they started serving larger markets, more competitive markets where the costs of doing business are so much higher.

21 Apr 2003 | Chris said...

The only markets that are competitive are the markets that SouthWest serves. SouthWest getting gates at or near a major city is an instant across the board price reduction for all flights. They do too serve most major cities. Boston, DC, Chicago, Atlanta- via B'ham, Miami, (just to cover the east) are all served by SouthWest either directly or at a airport within an hour or so. It often quicker, as well as cheaper, to fly close via SW and drive the final hour, versus flying into the very busy airport and fighting delays, traffic, slow luggage retirevial etc.

21 Apr 2003 | MrBlank said...

I've used Southwest several times this year and I have had no problems. Their customer service on the phone to change flights, at the ticket counter checking in or on the flight itself is just like it should be - comfortable and stress-free. I'm glad they're showing profits.

21 Apr 2003 | brian said...

well lots of smallish sized airlines are sprouting up all over Europe, and offering ridiculously low fares. I am pretty sure easyjet (the biggest of these new airlines) is profitable. I personally would like to see a lot of smaller airlines running limited routes, and keeping costs down for the customer.

As far as convenience is concerned, i am sure it would be just as convenient as the current situation where you are often stuck waiting hours for a connection on a major airline. so what difference would it make if you had to switch to a different airline for lets say your transoceanic leg of your trip?

With a centralized ticketing/gate coordination system (Sabre could do this, or already does), it wouldn't be too hard to integrate lots of smaller airlines.

21 Apr 2003 | Steve said...

Um, Southwest serves pretty much all major cities. They usually do so by using an "off-brand" airport (Midway in Chicago, BWI in Baltimore/DC, Providence in Boston, Oakland in the Bay Area), which saves them a lot on gate costs. But they do fly into big airports sometimes, like LAX. In fact, the only top 20 market I'm aware of that they don't service is Minneapolis/St. Paul.

Southwest and Jet Blue make money for a few important reasons. They don't have huge hub operations. These are very expensive to operate, because of additional staffing needs, the higher gate costs at major hub airports, etc. Jet Blue benefits from a smaller route network, but Southwest has a pretty extensive one. Even so, they're not spending money on running flights out of second- and third-tier markets like Fort Wayne and Syracuse, while the majors do run service through those cities (although often through their contracted regional carriers).

Perhaps the biggest factor, however, is the airlines' labor situations. Southwest has unions for some functions (mechanics, if I remember right) but not all. Nevertheless, because the unions and the workforce are considered and treated as partners rather than adversaries, Southwest enjoys the best labor relations in the business, while maintaing a more flexible salary structure and, more importantly, flexible work rules. (E.g. at United, a highly paid mechanic is required by contract to push the plane back from the gate, rather than a lower-paid but just-as-qualifed ground worker.) Jet Blue has gone down the same path. Never underestimate the power of having good management/labor relations, something the major carriers don't have at all (witness what's been going on with American the past few days).

21 Apr 2003 | Greg Greene said...

Southwest has no service to Atlanta, either. Both JetBlue and AirTran fly from here, though, and have a marked effect on fares for routes where they compete with Delta ? the city's dominant carrier ? head on.

21 Apr 2003 | SU said...

Um, Southwest serves pretty much all major cities. They usually do so by using an "off-brand" airport (Midway in Chicago, BWI in Baltimore/DC, Providence in Boston, Oakland in the Bay Area)

I had to chuckle at the "Providence in Boston" remark... Poor little Rhode Island gets no respect.

21 Apr 2003 | steve said...

It often quicker, as well as cheaper, to fly close via SW and drive the final hour, versus flying into the very busy airport and fighting delays, traffic, slow luggage retirevial etc.

Um, Southwest serves pretty much all major cities. They usually do so by using an "off-brand" airport ...

"Off-brand" is a nice way of saying "it's really frickin' far away." Let's look at the facts:

PVD to Boston / 57.8 miles
BWI to Washington / 32.5
BHM to Atlanta / 143.5
ISP to New York / 52.7
MDW to Chicago / 9.4
FLL to Miami / 24.2

With the exception of the last two, you're looking at a long-ass drive or trying to catch a train that runs maybe once an hour. While this may work fine for the recreational traveler, most companies sending employees on business trips would rather eat the extra cost and save people from the aggravation of renting a car and driving in an unfamiliar area.

21 Apr 2003 | steve said...

Also, Southwest and JetBlue are able to save lots of money by only flying one type of aircraft 737s and Airbus A320s, respectively.

21 Apr 2003 | hurley#1 said...

I'm with Steve when it comes to overall travel time. Several years ago I had to do a mid-week flight on short notice from Boston to Washington, DC. The rountrip fares from Boston to DC were outrageous, more than $1,000, but I was able to go for about $150 roundtrip from Nashua, New Hampshire to Baltimore on, I think, Southwest. But with the added travel time to Nashua, plus the exceptionally long wait for a train and connecting commuter rail from Baltimore to DC, my total travel time ended up being 10 hours door to door. It would have taken less time for me to drive there than to fly.

21 Apr 2003 | Steve said...

Way too many Steves around here....

Southwest's always been geared to leisure travelers, so the distances aren't as big a deal to them. But, more and more businesses are starting to make use of them and deal with the increased time. The company I work for frequently uses Jet Blue or Southwest and flies into Oakland or BWI (although Jet Blue does go to Dulles - which is also a hell of a long way outside of the center city).

Flying often takes a lot longer than the actual flight time. Which is why trains would be such an appealing alternative if they existed and ran with any regularity in this country outside of the DC-Boston corridor. When I lived in Europe, anything that could be covered by train in ~5 hours or less, I'd do that instead of fly, because it would end up being almost a wash.

21 Apr 2003 | brian said...

well dulles is mUCH more convenient to DC than BWI, you can get to reagan from dulles in like 20 minutes, actually considering dc traffic, that is probably optimistic. But the FLL to miami trip is quick, and efficient, its like 20 minutes or so, and not that bad at all.

one thing i learned about easyjet (for a euro example), is they have faster turnaround on their flights, so they fly more hops w/each plane in a given day, so they are able to squeeze more money out of a plane. This doesn't hurt the planes since they are all relatively new, and not suffering from extensive wear and tear. However, it makes much more sense for us to fly vs train/drive in the US especially if it takes 2 hours vs 10 hours to travel from dc to ny or dc to atlanta.

21 Apr 2003 | ~bc said...

If the big carriers wanted to stay out of bankruptcy, they shouldn't just fight their unions to give back money, they should look to the management... all the way to the top. These guys get paid sickening amounts to run these enormous organizations at the verge of collapse... and are probably still collecting their bonuses. That's crap. If a company starts going downhill, it should be those who make the most who have $cutbacks first... they're the ones running it into the ground.

Bottomline: SW (and the like) = efficient, profitable. The others run like the federal government (with even fatter paychecks to the big wigs). And like my mamma always said: "If I ran my business like the government, I would have gone under a long time ago."

21 Apr 2003 | JF said...

If a company starts going downhill, it should be those who make the most who have $cutbacks first...

Or... The company should take the Neutron Jack approach and keep the best of the best (at the top, middle and bottom) and fire/replace the lazy, unproductive, slacking-off deadwood wherever it resides (and it can reside at the bottom too). It's not always the fault of the people at the top. But, yeah, some of these exec salaries and bonues are pretty outrageous when their companies are hemorrhaging $.

01 May 2003 | Another Steve said...

This guy has some interesting radical ideas about Southwest.

http://peterthink.blogspot.com/2003_04_22_peterthink_archive.html

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