That because WN isn't parking planes in the desert in a desperate attempt to stop from hemorrhaging red ink.
Also, WN doesn't fly into some of the largest airports in the country...like ATL....yet. Once WN starts invading those fortress hubs, you'll see even more people abandoning the "full service" carriers and their nickel and dime fees.
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WN's business model breaks down once it enters some of the more congested and largest airports like LGA/EWR/ORD - they can't maintain their tight turn times and keep costs down.
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The thing I miss about Air Force One is they don't lose my luggage. - President George Bush Sr.
They are ahead from pretty much everyone else in hedging for several years to come. A summary of Southwest's hedges:
For 2008, 70% of its fuel needs are hedged at $51 a barrel;
for 2009, the company is covered about 55% at $51 a barrel;
for 2010, 30% at $53 per barrel;
for 2011 and 2012, at more than 15% at $64 and $63 per barrel,
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Originally Posted by lehms
lets see what happens after Southwests brilliant fuel hedge comes off, me thinks may be a tad tough for them to keep the streak alive
Yet WN remains more profitable at lower LF! If they need to fill up their planes to 110% LF (ahem UA) to be profitable, they'd charge even less to boost traffic.
The reality is, they don't need to. Even more to their benefit, they have plenty of room to shift or reduce capacity while continuing to grow traffic.
That's because WN has a truly low cost business model with some very smart/lucky fuel hedging.
For most of you here who fly an airline with First, Business and Economy classes, you would hate if every single airline were playing in Southwest's sandbox and had open seating with no premium cabin and international network.
The reality is that with such unexpected huge increases in fuel costs in a very short time, the full service business model's revenue premiums aren't covering the drastically increased costs due to fuel. And without WN's hedging in place, they, too, would be significantly in the red.
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The thing I miss about Air Force One is they don't lose my luggage. - President George Bush Sr.
I would venture to say that once you start charging for the first checked bag, you are no longer a "full-service carrier."
This is Ryanair-style bullcrap. I would have expected it out of US or NW, maybe UA the way they're heading. Not AA.
(And, for that matter, not even WN. They don't make a habit of insulting their customers; you get what you pay for. And the capability to check a bag so you can take 3 days worth of clothes, a change of shoes, a full bottle of shampoo and a pocketknife to your destination damn well ought to be part of a $300 airfare.)
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Originally Posted by VT_hawkeye
Southwest isn't cheap all the time. Matter of fact, not even most of the time.
What they don't do, though, is insult their customers; they usually try to treat their customers like human beings rather than self-propelled cargo. Their fare model is open, and the rules are easy to (a) find and (b) understand. When you fly WN, you know you're not buying a "full-service" experience, but neither are they going to try to screw you.
And charging for the first checked bag is an insulting screwjob.
I hate the nickel and dime fees as much as the next person but with oil topping over $130, I would rather see them collect these type of fees rather than declare bankruptcy. At this point it's not a matter of insulting the customer it's a matter of survival.
The fare rules are easy to find and understand to me using the new search by price and schedule. When I fly AA, I never feel like I'm being treated like self-propelled cargo.
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Originally Posted by Beckles
Regardless of what Southwest's load factors are, they have proven to be profitable flying with those load factors, so I'm not sure what your point is.
It's inarguable some people don't like Southwest, but it's pricing decisions like charging for the first bag (when Southwest doesn't even charge for the second bag!) and raising change fees to $150 (when Southwest doesn't even have change fees!) that will only make Southwest more popular. I don't think the money-losing legacies can really afford to cede any passengers to still profitable Southwest at this point ...
Eventually, their fees will go up, especially when their fuel hedges expire. They were brilliant to lock in the hedges when they did. People don't choose an airline based solely on baggage fees alone.
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Originally Posted by alliance
There must be a line where the fees stop right? I mean, at some point the fares have to get raised to a level that can keep the airlines in business.
Fares do need to rise but hopefully not to a point where people decide not to fly.
(1) right by the boarding door is a "sizer", from my observations very few people's carry-ons would fit--why doesn't aa enforce size limits? (or get rid of the "sizer")
(2) When i check into hotels i see people come with "huge" amounts of luggage (all much too big for carry-on); do "you" really need so much stuff? IMHO people can pare down they luggage to 1/2 (or better) than what they take on a trip--saving them the new fees and waiting in long check-in lines.
Programs: WN CP & A-List, US SP, DL SM, UA 3P, HH Dia, Hyatt Dia, SPG Gold, Hertz 5*
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Originally Posted by UnitedSkies
WN's business model breaks down once it enters some of the more congested and largest airports like LGA/EWR/ORD - they can't maintain their tight turn times and keep costs down.
Or SFO ... or PHL ... oh, wait ... WN already flies into some pretty congested airports ...
Besides, once all the legacies cut domestic capacity by 10% or more, those airports suddenly won't be so congested, will they?
I guess you think that there should be a charge to carry-on a bag too?
There must be a line where the fees stop right? I mean, at some point the fares have to get raised to a level that can keep the airlines in business.
Yes, that's why the capacity reductions are in place - with less capacity, the fares are likely to go up. An industry analyst recently said that fares and unit revenue will have to go up 20% in order to catch up with the increase in fuel prices. There is a long way to go, and even a 15% reduction in capacity by the largest airlines will only partially help.
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The thing I miss about Air Force One is they don't lose my luggage. - President George Bush Sr.
This rule will add $90-$120 to the average family's costs for a week-long vacation. There's only so much we can take.
Sure, but will a $15 fare increase be any better? Either way, it's money out the door. I'm not quite sure why people are pissed about the small charges, while people are assuming they would just accept higher fares.
In reality, what will happen is BOTH.
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The thing I miss about Air Force One is they don't lose my luggage. - President George Bush Sr.
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Quote:
Originally Posted by UnitedSkies
WN's business model breaks down once it enters some of the more congested and largest airports like LGA/EWR/ORD - they can't maintain their tight turn times and keep costs down.
So who's to blame for this? The knucklehead legacy carriers that make LGA/JFK/EWR/ATL/ORD etc. congested nightmares? The same legacy carriers that insist on flying crappy little CRJs thus further increasing traffic?
Just another example of WN's smart management and smart business model.
So who's to blame for this? The knucklehead legacy carriers that make LGA/JFK/EWR/ATL/ORD etc. congested nightmares? The same legacy carriers that insist on flying crappy little CRJs thus further increasing traffic?
Just another example of WN's smart management and smart business model.
No argument from me re: RJs - though they do fit quite well into legacy business models, like it or not. But RJs do contribute quite a bit to the congestion problems, I'll give you that.
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The thing I miss about Air Force One is they don't lose my luggage. - President George Bush Sr.
What I am more worried about is the airport staffing levels. If AA is now charging everyone with a bag the check in areas should be a disaster. Maybe the J and F sections will still be ok but if my 40 min F wait AUS recently showed me there that might be a pipe dream.
What I am more worried about is the airport staffing levels. If AA is now charging everyone with a bag the check in areas should be a disaster. Maybe the J and F sections will still be ok but if my 40 min F wait AUS recently showed me there that might be a pipe dream.
This is more my concern rather than the "principle" of charging for a bag. I am not sure revenue benefits from the first bag fee are worth jeopardizing operational efficiency. There, how's that for a balanced viewpoint?
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The thing I miss about Air Force One is they don't lose my luggage. - President George Bush Sr.
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