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Author Topic: Southwest vs Other Legacies???  (Read 7452 times)
NAplaya16-ATC
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« on: June 25, 2010, 09:56:49 PM »

Southwest, in my opinion, is the mother of all airlines.  Simply based on the facts that whenever I read Quarterly reports, their numbers are usually in profit, while the other legacy carriers, seem to be lagging behind.  Why is this?  When I look at Southwest, it seems to me that it is a company that was made for its workers, because I always hear how their workers enjoy working for them and their pilots would do anything for the company! 

If Southwest's numbers are so well and their employees enjoy working for them so much, why haven't other airlines adapted or learned from them?

This is a loaded question and can be debated forever, but I'm just curious in hearing some of my fellow LiveATC'ers thoughts!

-NAplaya
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Eric M
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« Reply #1 on: June 26, 2010, 12:05:54 AM »

Great topic, and I'm by no means an expert. However, I recalled reading a very helpful article on this very subject, and after about 10 minutes, Google turned it up for me. The seven reasons are explained in depth here:

http://www.wired.com/cars/futuretransport/news/2008/07/portfolio_0708

and here's the bullet point list:

1. One plane fits all
2. Point-to-point flying, no hubs
3. Simple in-flight service
4. No frills, no fees
5. Strong management
6. Relatively happy workforce
7. Aggressive fuel hedging
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sykocus
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« Reply #2 on: June 26, 2010, 07:55:08 AM »

Southwest does what they do very well and I'm certain there's many things that the legacy airlines can learn from them. But SWA is a domestic airline only. The legacies are international airlines. That by itself adds factors and complexity that SWA never even has think about.
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atcman23
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« Reply #3 on: June 26, 2010, 08:52:45 AM »

I think most of the points have been made.  SWA runs one aircraft type, which helps with maintenance costs.  They don't have any frills (i.e. meals, etc, just some snacks and drinks) and typically fly into the less busier airports on large cities (for example, instead of flying into Chicago O'Hare, they fly into Chicago Midway) and are more point-to-point flying.  They DO have hubs, however they do not operate their hubs like a traditional hub-and-spoke system.  Right here, costs of operating the airline are down: fuel hedging.  They bought fuel futures years ago at the current price for X amount of years, hoping that the cost of fuel didn't go lower.  It ended up going higher (much higher) and SWA was getting fuel for a steal.  They saved millions on fuel while other airlines were paying deeply for fuel (especially US Airways). 

SWA's management has done a lot too to keep costs low.  The employees are treated well and paid well.  Some benefits are paid for by the company too.  They made smart decisions when they expanded the airline in the 1980s and 1990s. 

While the legacy carriers were around well before SWA, they don't always make good decisions.  All of them want to be bigger and want to make the most money.  Their business model isn't working the way it used to in the 1908s (the hub-and spoke system) and eventually will have to chance, especially with the advent of RNAV and more efficient aircraft.  International flying also adds a whole new arena to the mix and SWA doesn't fly international so that leaves out a lot of complexity. 
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Mark Spencer
NAplaya16-ATC
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« Reply #4 on: June 27, 2010, 11:17:06 AM »

Ya I understand the international thing, which does add alot into the mix amongst other costs.
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NAplaya16-ATC
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« Reply #5 on: June 27, 2010, 10:44:03 PM »

But the funny thing is this.  I mean when I hear airlines going on strike over pay and and contract disputes, most recently Spirit Airlines, those talks/meetings last for many many weeks and things get real ugly.  But Southwest just goes ahead and gives pay raises and incentives without any word or complaint from any employee, they just do it as an appreciation for their employees.

I wish some other airlines would do something like that.  Im not saying that they dont, I just never hear about it.   I mean, its stuff like that, that makes employees wanna work for them and wanna work harder, b/c they know that if they do, they in some way will get rewarded for it. 

-NAplaya
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tyketto
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« Reply #6 on: June 28, 2010, 03:05:40 AM »

3 more things to add to that list:

1. Fly to lesser-used airports. By that, I mean ISP instead of JFK. MDW instead of ORD. DAL instead of DFW. MCO instead of MIA HOU instead of IAH. Avoid the bigger airports if they can, especially if it is another airline's hub (unless they smell blood at that airport, like MSP (NWA having problems), DEN (UAL/FFT having problems), PIT (USA having problems), and MKE (MEP having problems)). With that...

2. If they do fly to the bigger airports, they request the gates closest to the runway. This is the only reason why they fly to LAX Terminal 1 is the closest terminal to any runway. The C gates are the closest to the 25s at LAS and PHX. And with that...

3. the 20-minute turnaround. Standing rule with SWA is that unless a delay comes up (for whatever reason), they take no more than 20 minutes from when the aircraft is parked at the gate to unload and load passengers, baggage, and fuel, and are pushed out again. The idea is that the faster they can get the plane turned around, the faster it is able to generate revenue.

BL.
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joeyb747
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« Reply #7 on: June 28, 2010, 07:56:39 PM »

One of the biggest reasons the flying public loves SWA is the simple fact that they do not charge a dime for your first two items of checked baggage.

http://www.southwest.com/travel_center/baggage.html

Other airlines, such as United, now charge $25 for your first bag! And $35 for your second!!

http://www.united.com/page/article/0,6867,52481,00.html

That goes a long way with the flying public...say you spend $275.00 on your ticket...you are taking two checked bags with you...on SWA there is no added cost. On UAL you would add an extra $60! And if you were traveling with your family, well it gets exponential from there.

Then you have Spirit Airlines...who has just started charging for CARRY-ONS! Up to $45 for an item that is deemed to be to large to fit under the seat in front of you and must go into an overhead bin!  shocked

http://www.spiritair.com/Policiesbags.aspx#CarryOnBag
« Last Edit: June 28, 2010, 08:00:38 PM by joeyb747 » Logged

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NAplaya16-ATC
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« Reply #8 on: June 29, 2010, 12:19:56 AM »

Ya I understand that, but with those extra charges, they still come up way under expectations!   Those extra charges has caused others to lose alot of PAX to SWA, but there are still so many people who fly with United, American, Delta, CAL, and USA, yet even with these things, they cant turn profits!   It just baffles me!

Plus I also hate how people argue that they cant compare SWA to any other airline! Because of differences...which I really dont agree with at all!  Its a complete airlines with shareholders, CEO, etc etc.   So why can they not be compared?   I dont get that!

-NAplaya
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tyketto
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« Reply #9 on: June 29, 2010, 02:28:11 AM »

Ya I understand that, but with those extra charges, they still come up way under expectations!   Those extra charges has caused others to lose alot of PAX to SWA, but there are still so many people who fly with United, American, Delta, CAL, and USA, yet even with these things, they cant turn profits!   It just baffles me!

Plus I also hate how people argue that they cant compare SWA to any other airline! Because of differences...which I really dont agree with at all!  Its a complete airlines with shareholders, CEO, etc etc.   So why can they not be compared?   I dont get that!

-NAplaya

Probably because you're dealing with a caste system here. Those legacy carriers not only have legacy service, but they separate those who play the game into separate classes: economy, Business Class, First Class, etc. They also use that for the seating they get, as well as the service they get. Plus, you have to earn that class by flying frequently with them.

SWA on the other hand, while they do pretty much cattle call, their Business Select pax only get the first 15 positions for boarding, which in turn gets them their first choice for seats. But that is where that difference ends.

Those that argue that they can't compare SWA to the legacy carriers don't understand that most people tend to prefer being treated equally, instead of looked down upon from a higher class.

BL.
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sykocus
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« Reply #10 on: June 29, 2010, 01:29:16 PM »


...the legacy carriers don't understand that most people tend to prefer being treated equally, instead of looked down upon from a higher class.

BL.

The only ones who want to be treated equally are those sitting in coach. I'm joking a little, but there is some truth in it. People sitting in business and first class either have payed a significant amount of money the ticket or they been upgraded. If they've been upgraded it means they have have already spent a significant amount of money flying on that airline. Most most airlines' elite status starts around 25k miles. So that means they've already flown 25k miles or more that or the previous year. That's roughly like flying around the earth at the equator. Even if they are using their miles to upgrade that usually starts at around 30k miles for an international flight. So that means they've flown at least 30k miles with with that airline at some point.

So while the majority of passengers would probably rather be treated the same as those sitting up in business and first. Those are up front often represent a significant portion of the airlines revenue generating population. If not for that specific flight then for the airline as a whole. One point I forgot to add is that these frequent flyers often feel entitled to their upgrades and pampering. If a legacy stops this sort of service they would lose a portion of their core customers.
« Last Edit: June 29, 2010, 03:21:22 PM by sykocus » Logged

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Eric M
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« Reply #11 on: June 29, 2010, 03:41:25 PM »

Southwest has done a very good job of keeping itself differentiated from the rest of the industry. From a public relations standpoint, when any other US-based airline announces fare changes (higher or lower), the next paragraph in the article is always how the other US-based legacy carriers are expected to respond. Southwest is never named.

At the consumer level, Southwest also keeps itself distanced by not participating in travel search engines such as cheaptickets.com, travelocity.com, expedia.com, or any other. If you want to book a ticket on Southwest, or even research a fare, you will do it at Southwest.com. 

I believe all of the points made above are valid, concerning how Southwest's operations differ from those of so-called legacy carriers. But I also believe a deeper look at how Southwest operates reveals the reasons for their success. In a lot of ways, Southwest is the Apple Computer of the aviation industry; while other industry members are cutting back and laying off, it manages not only to survive, but also expand. And it does so with a great amount of perceptual distance from the rest of the industry.

Over the last couple of years, it is the mainstream news media that largely convinced the American people that a recession was in full swing, and this led to sharply reduced levels of consumer confidence, house-buying, shopping, etc. Domino effect. Yes, banks were in trouble, and yes, perhaps some signs of a recession were around, but it wasn't until the media started using the R-word that the nation as a whole really began to panic. So when one legacy airline announces something bad, and other airlines respond, the other airlines are immediately grouped together with the first to be in trouble. Southwest never plays that game. I'm sure Southwest is not without its struggles, but they (like Apple) cultivate a sense of consumer confidence by not showing any cards whatsoever.

Now, about the lack of luggage charges: this is, again, more media brilliance on the part of Southwest. Here's my proof. Over the last 9 years that Melanie and I have been married, we have flown from PDX to SJC to see her family many, many times. More than I can count. Southwest has typically been our airline of choice, until about the last year or so. Southwest is still an option, but the "web special fares" and Ding Fares are no longer all that special. At this point, it's pretty much a wash between Southwest and Alaska in terms of fares; sometimes, Alaska will even be cheaper. Five years ago, this was not the case. Even three years ago, this was not the case. So while hedge-betting has served Southwest well on fuel prices, and other operational costs have risen in proportion with other airlines' costs, Southwest has quietly taken full advantage of the current industry trend of rising fares to meet "skyrocketing fuel costs." Yes, there is no bag fee, but the fare prices have definitely gone up.
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NAplaya16-ATC
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« Reply #12 on: June 30, 2010, 11:08:29 PM »

I also love Gary Kelly!  In my evaluation, he doesnt put himself in control, because he takes all profits and throws it right back into the company, where it oges almost directly to the pilots, line service, agents, etc etc    that is unbelievable! and its why he is so respected!
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