Newsstand - KISS (Keep it Simple, Stupid)

Here's an interesting article from the Wall Street Journal.

(Note: the article has been reprinted on another website, so you don't have to be a WSJ subscriber to read it.)

Carriers Discover That Airlines With Simplest Operations Win
08/14/2002

http://archives.californiaaviation.org/airport/msg22592.html

The article states in part:

Finally, American has figured out what Southwest Airlines and others have known for some time: There is a cost to complexity. In fact, folks from American even called up Southwest Airlines and asked if they could come over -- they are based about 30 miles apart in the Dallas area -- and learn more about Southwest's operation. That's a stunning turn for an airline that seemed to regard Southwest as a pesky simpleton. And by some accounts, Southwest's people were surprised at how rudimentary the questions were from American. If you've done things one way through your airline career, it's hard to learn a new way.

LoneStarMike

This really represents AA waking up to the fact that profit equals revenue minus cost.

AA has always been a leader on the revenue side. They pioneered yield management and still excel at it. They pioneered frequent flyer programs and still have, in my opinion and at least for my travel patterns, the hest. However, on the cost side, their efforts have (until recently) been trivial stuff like replacing meals by "bistro bags," things that tend to p*ss off paying customers more than they make a difference at the bottom line.

Many of their recent moves, such as moving to rolling hubs, have been aimed at the cost side. If they're serious about real cost savings, and they seem to be, what better role model to look at than the recognized leader?

The problem with everyone looking to Southwest as the place to go for solutions to current problems in the industry is that it ignores the fact that you simply cannot use Southwest's model and serve the number of cities, both foreign and domestic, that the other majors do.

For starters, you can't take that 737 and make it go to Europe. And even if you could, without a hub, you wouldn't have enough passengers to fill it.

You're right, mdtony. There's no way the majors can model their entire operation after Southwest. But they can adapt some of Southwest's policies and procedures to make their operations more simple.

Since Southwest doesn't assign seats, they've always boarded by group numbers. AA does assign seats, but now, they, too board by group numbers. I don't know if it's saved them time in the boarding process or not.

Southwest has never been one to have 50 different fares in a certain city-pair, whereas the majors do, or at least they have in the past. And yes, I know AA tried to simplify their fare structure in the past and it didn't work, but maybe it's time to look into that concept again.

How many times have you read on these boards where someone with a complicated itinerary had 2 or 3 agents take up to an hour to ticket them? I've never heard of that happening at Southwest. That's one of the reasons Southwest is able to check in more passengers using less people.

What about the rolling hub concept? Southwest has been doing that for years. Oh sure, WN says "We don't operate hubs" but what they really mean is that they don't time their flights to arrive and depart in banks at their busiest cities like PHX, LAS, BWI, etc. Each plane lands, does it's 25-30 minute turn and takes off again. As a result, Southwest is able to utilize it's gates more than other carriers who operate traditional hubs.

Yet from a passenger standpoint, PHX, LAS, and BWI are Southwest hubs, because a lot of folks make connections there. Now AA is going to try the same thing at DFW.

Those are just a few examples I can think of off the top of my head.

Again, you are correct that the majors will never model themselves completely after Southwest, but every little thing they can do to simplify their operations will save them
time or money or both.

(edited for spelling)

LoneStarMike




[This message has been edited by LoneStarMike (edited 08-15-2002).]