Southwest Rapid Rewards - FA's promoting end of Wright Amendmant




Dunbar
Aug 19, 05, 4:26 pm
Yesterday after touching down in PHX the FA ended the "welcome to Phoenix" speech with a pitch to support the end the Wright amendment. After he said "and you will see cheaper fares and more destinations" a lady yelled out "on another airline" :D Obviously she didn't quite agree with the FA. This is a contentious issue amongst DFW residents, should the FA's even be going there?


curbcrusher
Aug 19, 05, 4:56 pm
Why not go there? It makes sense that WN's employees would want to spread the word since the repeal is a company initiative.

justageek
Aug 19, 05, 5:29 pm
Why not go there? It makes sense that WN's employees would want to spread the word since the repeal is a company initiative.

I find it a little annoying that WN pushes the issue on its web site, reservation line hold message, and inflight PA announcements. I mean, AA isn't campaigning against repeal in any of these venues.

(Personally I have no problem with the message on the web site or in the in-flight magazine, but I find the reservation line hold message and inflight PA announcement annoying because they are more intrusive than the other means.)

To be honest, I am pretty annoyed by the new Southwest attitude of "we're the most financially successful airline in the United States, but we still feel compelled to annoy passengers with political messages and devaluation of the frequent flyer program." Give me a break, please.


BizJet
Aug 19, 05, 6:38 pm
The in-flight announcements are not just the ideas of some enterprising flight attendants -- it's a directive from Colleen Barrett.

Kaiserin
Aug 19, 05, 8:22 pm
Yesterday after touching down in PHX the FA ended the "welcome to Phoenix" speech with a pitch to support the end the Wright amendment. After he said "and you will see cheaper fares and more destinations" a lady yelled out "on another airline" :D Obviously she didn't quite agree with the FA. This is a contentious issue amongst DFW residents, should the FA's even be going there?

I personally don't like it, but I also don't care for any mindless chatter by the FA's (or pilots) when I'm flying. It has gotten incredibly old.

JS
Aug 19, 05, 9:06 pm
Well, it beats "I am here for your safety ONLY" any day. :rolleyes:

ByrdluvsAWACO
Aug 19, 05, 10:14 pm
WN should put their views in their inflight magazine. Allowing or requiring FA's to monologue at the end of a flight is just poor taste.

curbcrusher
Aug 19, 05, 10:30 pm
Nevermind...

curbcrusher
Aug 19, 05, 10:36 pm
Nevermind...

ByrdluvsAWACO
Aug 19, 05, 11:03 pm
Yes, but forcing an already captive audience to listen their one-sided argument is what I have a problem with. WN is acting like repealing WA is an important issue on the same level as starving kids in Niger or the war in Iraq.

curbcrusher
Aug 19, 05, 11:52 pm
Yes, but forcing an already captive audience to listen their one-sided argument is what I have a problem with.

You don't fly WN, so who cares? Further, if it really bothers those that do fly WN, there is no shortage of anti-WA-speech-free alternative carriers.

WN is acting like repealing WA is an important issue on the same level as starving kids in Niger or the war in Iraq.

:rolleyes:

StSebastian
Aug 20, 05, 12:11 am
I mean, AA isn't campaigning against repeal in any of these venues.No, but they are pushing it on the employees quite hard, and I hear they're making a number of comments locally in the Dallas area to push their case.

ByrdluvsAWACO
Aug 20, 05, 11:25 am
No, but they are pushing it on the employees quite hard, and I hear they're making a number of comments locally in the Dallas area to push their case.

I have yet to hear any AA employee, from the ticket counter to baggage claim, mention anything about WA. I have never been forced to listen to any WA monologue either.

StSebastian
Aug 20, 05, 12:21 pm
I have yet to hear any AA employee, from the ticket counter to baggage claim, mention anything about WA. I have never been forced to listen to any WA monologue either.
I think AA is taking the position that they should lobby locally in the Dallas area and get the employees to contact legislators rather than public announcements to the passengers.

HKG_Flyer1
Aug 20, 05, 2:08 pm
AA and the DFW Airport Board have given a pile of cash and benefits to a whole host of local politicians, so they've pretty much got things "wired," notwithstanding overwhelming public sentiment for repeal. (Just to be sure, AA is encouraging uniformed FAs to pack constituent meetings for Reps. Marchant and Burgess planned for later this month, even if the FAs aren't actually constituents.)

The only way WN is going to be able to get moronic law repealed is to galvanize public support. In contrast, AA doesn't really need to do anything except to keep up the "care and feeding" of a handful of local politicians. It's also would be tough for AA to come up with a catchy in-flight campaign; "Save our monopoly!" "Let the gouging of DFW travelers continue!" or "Protect politically wired airport contractors!" don't really pack the same kind of punch.

Kaiserin
Aug 21, 05, 12:12 pm
Well, it beats "I am here for your safety ONLY" any day. :rolleyes:

It doesn't when you have an FA singing who clearly can't. On my flight from CMH to BNA last week, I think I heard dogs in Nashville howling on our decent. :)

PT737SWA
Aug 22, 05, 7:58 am
The repeal effort is just getting under way. Wait and see. ;) WN feels the need to rally its Customers more than AA because AA has several politicians in it's pockets.

GoBears99
Aug 22, 05, 3:30 pm
AA and the DFW Airport Board have given a pile of cash and benefits to a whole host of local politicians, so they've pretty much got things "wired," notwithstanding overwhelming public sentiment for repeal. (Just to be sure, AA is encouraging uniformed FAs to pack constituent meetings for Reps. Marchant and Burgess planned for later this month, even if the FAs aren't actually constituents.)

HKG---you asked me to identify some of your anti-AA venom/vitriol, and this is it. I mean come on, do you believe for a minute that WN is not also encouraging people to pack constituent meetings for local elected officials? Come on man, you can do better than that.

The only way WN is going to be able to get moronic law repealed is to galvanize public support. In contrast, AA doesn't really need to do anything except to keep up the "care and feeding" of a handful of local politicians. It's also would be tough for AA to come up with a catchy in-flight campaign; "Save our monopoly!" "Let the gouging of DFW travelers continue!" or "Protect politically wired airport contractors!" don't really pack the same kind of punch.

In their typical and annoying fashion, yes.

justageek
Aug 22, 05, 3:40 pm
The repeal effort is just getting under way. Wait and see. ;)

Too bad the opening salvo was the trashing of RapidRewards... But hey, whatever needs to be done to "rally the Customers"!

HKG_Flyer1
Aug 22, 05, 5:19 pm
HKG---you asked me to identify some of your anti-AA venom/vitriol, and this is it. I mean come on, do you believe for a minute that WN is not also encouraging people to pack constituent meetings for local elected officials?
This isn't vitriol. Here's what Rob Steiner had to say in a recent communication to AA employees:
Here's how you can help support AA's position to keep the Wright Amendment. During the month of August, Congressmen Burgess and Marchant will be holding constituent meetings. Please pick a meeting place convenient to you from the list on the Flight Service website and plan to attend. All you need to do is say thanks to the Congressmen for supporting DFW Airport and American Airlines. If possible, please wear your AA uniform or other AA paraphernalia. These meetings are open to all employees regardless of base, so if you're in or near the DFW area please try to attend on of these important events.

I don't know whether Southwest is encouraging employees to pack constituent meetings even if they aren't constituents, but nothing of the sort has come to my attention. If it did, I wouldn't approve... I don't think it's appropriate. General meetings, yes. Constituent meetings should be for constituents.

JS
Aug 22, 05, 5:57 pm
You wouldn't approve of Southwest employees lobbying members of Congress outside their own district. Having read a few of your thousands of posts blaming AA (on whom you don't mind flying :confused: ) for everything under the sun, I seriously doubt that. :rolleyes:

HKG_Flyer1
Aug 22, 05, 6:41 pm
You wouldn't approve of Southwest employees lobbying members of Congress outside their own district.:
What part of my post did you not understand? I said that I wouldn't approve of Southwest employees attending constituent meetings outside their district. I also said I thought it would be fine for them to attend "general meetings," in other words, meetings open to the general public.


Having read a few of your thousands of posts blaming AA (on whom you don't mind flying :confused: ) for everything under the sun, I seriously doubt that. :rolleyes:
Care to be more specific? I believe the Wright Amendment is highly protectionist, anti-consumer, corporate welfare which now serves primarily to benefit American Airlines and a handful of contractors associated with DFW Airport at the expense of nearly everyone else.

AA does a lot of things well. In this situation, they are behaving rationally, doing everything they can to preserve a cozy monopoly. Why wouldn't they?

That doesn't mean I have to develop a pathological hatred towards them. I do, however, feel compelled to correct falsehoods and distortions of the truth. To the extent I'm paying several thousand dollars more per year in air fares than I otherwise would under a free market system, I'm highly motivated to get the law changed. I'm acting in my rational best interest as well.

Where's the confusion?

GoBears99
Aug 22, 05, 8:04 pm
What part of my post did you not understand? I said that I wouldn't approve of Southwest employees attending constituent meetings outside their district. I also said I thought it would be fine for them to attend "general meetings," in other words, meetings open to the general public.

Well, I've got news for you HKG. WN is ambushing Congressmen like Joe Barton at his constituent meetings. And the AA message you send sounds pretty positive to me...just thanking Congressmen for their support. I don't see anything where they are ambushing Sam Johnson and Jeb Hensarling. Yet WN isn't just thanking Sam and Jeb...they are making a scene at meetings held by Barton and Burgess and Marchant. So you'd better get on your soapbox and condemn them.

Care to be more specific? I believe the Wright Amendment is highly protectionist, anti-consumer, corporate welfare which now serves primarily to benefit American Airlines and a handful of contractors associated with DFW Airport at the expense of nearly everyone else.

And I believe WN's position at DAL is corporate welfare gained through litigation and politicking, and that the Wright Amendment protects the DFW hub from the externality effect of a close-in airport like DAL.

AA does a lot of things well. In this situation, they are behaving rationally, doing everything they can to preserve a cozy monopoly. Why wouldn't they?

Name something you think AA does well, because you haven't named one in any of the posts I've read.

That doesn't mean I have to develop a pathological hatred towards them. I do, however, feel compelled to correct falsehoods and distortions of the truth. To the extent I'm paying several thousand dollars more per year in air fares than I otherwise would under a free market system, I'm highly motivated to get the law changed. I'm acting in my rational best interest as well.

You also get non-stop service instead of connecting service. If you fly so much, and you value your time, I would bet that the time you save by not having to connect exceeds the money you spend.

gregorygrady
Aug 22, 05, 8:15 pm
Name something you think AA does well, because you haven't named one in any of the posts I've read.

He obviously thinks AA does a lot well (FF program, etc) because the main reason he supports the repeal of the WA is to lower ticket prices on AA, THE CARRIER THAT HE FLYS. He doesn't even fly WN, he just wants lower fares on AA from the competition that WN would provide with new cities available due to a WA repeal.

JS
Aug 22, 05, 8:58 pm
Flying exclusively AA on Southwest-matching fares...

That type of consumer behavior is precisely what has given AA the ammunition to fight off would-be competitors at their DFW hub. For example, Vanguard offers discount flights to MCI, AA drops their fare to match Vanguard's, and everyone flies AA on the Vanguard-matching fare. Then Vanguard pulls out due to lack of customers, AA jacks the fare back to its original level, and everyone wonders why the competition left, and why don't more competitors throw away millions of dollars trying to do the same thing.

Criminy, even the 800 pound gorilla, Southwest Airlines, won't fly out of DFW to compete with AA. Maybe if people put their money where their mouths are, competition would be a lot more effective.

GoBears99
Aug 22, 05, 10:00 pm
Flying exclusively AA on Southwest-matching fares...

That type of consumer behavior is precisely what has given AA the ammunition to fight off would-be competitors at their DFW hub. For example, Vanguard offers discount flights to MCI, AA drops their fare to match Vanguard's, and everyone flies AA on the Vanguard-matching fare. Then Vanguard pulls out due to lack of customers, AA jacks the fare back to its original level, and everyone wonders why the competition left, and why don't more competitors throw away millions of dollars trying to do the same thing.

Criminy, even the 800 pound gorilla, Southwest Airlines, won't fly out of DFW to compete with AA. Maybe if people put their money where their mouths are, competition would be a lot more effective.

Maybe Vanguard was undercapitalized and expanded too quickly. Another way to look at it is this:

Vanguard undercuts AA's fares
AA forced to match Vanguard to avoid loss of share
Lower fares increase demand, forcing AA to add flights
Consumers choose AA over Vanguard, Vanguard fails
AA returns fares/output to its previous pre-entry equilibrium

It's not AA that drove prices down here, it's Vanguard. Vanguard was simply a poorly run airline.

In contrast, WN is an extraordinarily well run airline, with more capital and lower costs than AA. WN was able to take on and demolish US in PHL. WN was able to largely drive AA and UA out of the intra-CA market. If you don't think WN could take on AA at DFW, you're nuts.

gmax58
Aug 23, 05, 4:14 am
It's not AA that drove prices down here, it's Vanguard. Vanguard was simply a poorly run airline.

In contrast, WN is an extraordinarily well run airline, with more capital and lower costs than AA. WN was able to take on and demolish US in PHL. WN was able to largely drive AA and UA out of the intra-CA market. If you don't think WN could take on AA at DFW, you're nuts.

There's a whole lot more to this than meets the eye - the reason WN went to PHL (possibly among others) is that US was already running into problems (Chapter 11, loss of market share, etc.) - the airline was in a weakened state. AA in DFW is in a much stronger financial position than US, and so this DFW example really doesn't hold up that well. (I'm not as familiar with the Intra-CA background, so I'd be happy to get some input on that story.)

There are other possible events that could occur, like an airline bunching up traffic, for example, that makes competing in another airline's hub very difficult.

PS - I'm curious on your sources of WN "harassing" Joe Barton and others.

PT737SWA
Aug 23, 05, 7:37 am
PS - I'm curious on your sources of WN "harassing" Joe Barton and others.

Southwest is encouraging employees to attend any constituent meeting for a congress person if you live in their district. I received an e-mail with a meeting schedule for my area a couple weeks ago. I wish I still lived in E.B. Johnson's district. :mad: :td:

HKG_Flyer1
Aug 23, 05, 8:09 am
Maybe Vanguard was undercapitalized and expanded too quickly. Another way to look at it is this:

Vanguard undercuts AA's fares
AA forced to match Vanguard to avoid loss of share
Lower fares increase demand, forcing AA to add flights
Consumers choose AA over Vanguard, Vanguard fails
AA returns fares/output to its previous pre-entry equilibrium

It's not AA that drove prices down here, it's Vanguard. Vanguard was simply a poorly run airline.

In contrast, WN is an extraordinarily well run airline, with more capital and lower costs than AA. WN was able to take on and demolish US in PHL. WN was able to largely drive AA and UA out of the intra-CA market. If you don't think WN could take on AA at DFW, you're nuts.
The U.S. Department of Justice had a slightly different take on the Vanguard situation at DFW:

Summary
American’s actions on the Wichita-DFW route are illustrative. In February 1994, American announced that it would terminate its jet service between Wichita and DFW and serve the route only with turboprops -- explaining that it was making the change because it had been “losing money” on the route. Dave Higdon, Wichita Air Service Called Healthier, WICHITA EAGLE, Feb. 12, 1994, at B7; see Dave Higdon, Seeking Jets for Wichita; Officials May Put Up Money to Replace Turboprop Service, WICHITA EAGLE, Feb. 6, 1995, at 1D. American then told the Wichita Airport Authority that it would maintain three jet flights only if the Authority provided a subsidy guarantee to American. In the fall of 1996, Vanguard, which had introduced jet service between Wichita and DFW in April of 1995, announced an expansion of its service at DFW. American quickly responded by beginning five daily jet flights (expanding its seating capacity by 35%) between Wichita and DFW -- two more jet flights than it had been willing to put in even with the subsidy. American’s costs of adding that capacity exceeded its revenues. In December 1996, Vanguard announced that it was leaving Wichita. Shortly thereafter, American decreased seating capacity by 30% and its average fares increased from approximately $60 to over $90, an increase of more than 50%.

Detailed Complaint
1. Vanguard Airlines (“Vanguard”), which began operations in late 1994, commenced nonstop service from DFW to Kansas City with three daily round trips in January 1995. At the time, American operated eight round trips, carrying 65% of the passengers in the market at an average one-way fare of $108. Delta offered six round trips. In response to Vanguard’s entry, American matched Vanguard’s fares on all of its DFW-Kansas City flights, reducing its average one-way fare to $80 by April 1995, at which time Vanguard cut back its service to one round trip. Delta withdrew all of its service in May 1995. From May to July 1995, American added six more round trips. American’s documents indicate that it intended its additional flights "to drive [Vanguard] from the market.”

2. In December 1995, Vanguard withdrew its remaining nonstop DFW-Kansas City service. American immediately began reducing its service, going from 14 to 11 daily round trips in February and to 10 by July, and increasing its fares. During the ensuing six months, American’s average one-way fare ranged from $112 to $147, as much as 80% higher than in the prior year when Vanguard was providing nonstop service.

3. After Vanguard’s ceased its nonstop service, American made substantial profits on the DFW-Kansas City route. Indeed, according to American’s documents the route went from being one of American’s “worst performer[s]” when American added flights in response to Vanguard to being the “best in the west” after Vanguard withdrew its nonstop service.

4. In September 1996, Vanguard announced that it would expand its DFW operations on October 1 by introducing nonstop service between DFW and Kansas City, Cincinnati, and Phoenix. Vanguard’s announced service represented a significant expansion of its DFW operations, with new nonstop service to three cities (Kansas City, Phoenix, and Cincinnati), continued nonstop service to Wichita (which Vanguard had inaugurated in 1995), and potential connecting service via Kansas City to eight cities (Chicago, Minneapolis, Des Moines, Denver, Salt Lake City, San Francisco, Seattle, and Los Angeles).

5. Within days of Vanguard’s announcements, American planned the following schedule changes and service additions:
a.In DFW-Kansas City, American would add two new round trips as of October 1 (advancing the commencement date of two round trips that had already been scheduled for November in order to undercut the viability of Vanguard’s one-stop DFW-Kansas City service via Wichita) and a third as of November 1, for a total of 13 round trips in the market.

b.In DFW-Wichita, where American had operated nine round trips with small commuter aircraft, American would substitute five new jet round trips for four of its commuter flights -- the largest introduction of jet service by American in any market since at least 1994, increasing its seating capacity on the route by 35%.

c.In DFW-Cincinnati, a route American had abandoned as unprofitable in 1994, American would begin nonstop service on December 1, with three round trips.

d.In DFW-Phoenix, American would accelerate the addition of two planned seasonal frequency increases, from November 1 and November 27 to October 1.

6. In addition to carrying out this plan, American also matched Vanguard’s fares on selected flights in DFW markets (DFW-Chicago and DFW-Des Moines) that Vanguard served only on a connecting basis, even though American’s service was nonstop. The flights on which American offered the matching fares operated at times that “bracketed” the flight times of the Vanguard connecting flights.

7. Vanguard quickly abandoned its plans, pulling out of DFW-Cincinnati and DFW-Phoenix in November 1996. In DFW-Kansas City, Vanguard reduced its service to a single daily nonstop flight in one direction, with a single daily one-stop flight in the opposite direction. Vanguard exited DFW-Wichita in December 1996.

8. After Vanguard announced that it would be exiting the three DFW spoke routes, American promptly increased its fares on those routes. By June 1997, American’s seating capacity in DFW-Wichita had decreased by 30%, returning to the level American had maintained before it learned of Vanguard’s planned DFW expansion, and its average local one-way fare had increased by more than 50 percent, to over $90 from approximately $60. In DFW-Phoenix, American’s average fares, which had fallen by roughly 30% during Vanguard’s brief appearance in the market, increased quickly to pre-existing levels after Vanguard exited. American’s fares in Cincinnati rose by 60%-80% after its first month of operation.

9. Unable to sustain its proposed DFW operations, Vanguard subsequently pulled back to Kansas City, where it began to establish a mini-hub. Today, Vanguard serves DFW only from its Kansas City hub; it no longer provides nonstop service on any other DFW city pair.

As a postscript, Vanguard Airlines ultimately filed bankruptcy and no longer serves DFW.

JS
Aug 23, 05, 8:16 am
The U.S. Department of Justice had a slightly different take on the Vanguard situation at DFW:
[indent]1. Vanguard Airlines (“Vanguard”), which began operations in late 1994, commenced nonstop service from DFW to Kansas City with three daily round trips in January 1995. At the time, American operated eight round trips, carrying 65% of the passengers in the market at an average one-way fare of $108. Delta offered six round trips. In response to Vanguard’s entry, American matched Vanguard’s fares on all of its DFW-Kansas City flights, reducing its average one-way fare to $80 by April 1995, at which time Vanguard cut back its service to one round trip. Delta withdrew all of its service in May 1995. From May to July 1995, American added six more round trips. American’s documents indicate that it intended its additional flights "to drive [Vanguard] from the market.”

blah blah blah

Yet you continue to fly this evil airline known as AA. Please, put your money where your mouth is and stop contributing to the mAAchine. If non-stop service in First Class is that important to you, YOU'LL PAY.

HKG_Flyer1
Aug 23, 05, 8:49 am
Yet you continue to fly this evil airline known as AA. Please, put your money where your mouth is and stop contributing to the mAAchine. If non-stop service in First Class is that important to you, YOU'LL PAY.
Actually, I don't fly AA that often out of DFW (I used to fly AA almost exclusively when I lived in other domestic markets).

A lot of the reason is due to fares. The high cost of travel between here and most everywhere outside the Wright Amendment perimeter makes it harder to justify trips, whether for business or pleasure.

With respect to long-haul trips I do make, it is kind of tough to find compelling options. AA has an 85% market share at DFW, and the nearest alternative airport allowed to provide long haul service is roughly 200 miles away. The amount of service offered by other airlines here in the Metroplex is more akin to that of a smallish secondary city. At times, there's really no other choice.

Also, some of the other airlines flying into DFW take AA's disinterest in low prices into account and their history of "going to war" with carriers who dare to try to undercut AA's high DFW prices when pricing their fares. As a result, the limited alternatives available out of DFW (most "competitors" only have an approximate 1% market share) tend to be priced at jacked up amounts... in full knowledge of the fact that AA won't attempt to undercut them.

GoBears99
Aug 23, 05, 9:42 am
The U.S. Department of Justice[/b] had a slightly different take on the Vanguard situation at DFW:

Yeah, and didn't two courts dismiss the DOJ's case on summary judgment (that is, not even enough of an issue to warrant a trial)?

HKG_Flyer1
Aug 23, 05, 9:48 am
Yeah, and didn't two courts dismiss the DOJ's case on summary judgment (that is, not even enough of an issue to warrant a trial)?
In the first case, both American Airlines and Robert Crandall were forced to enter into a consent decree in order to avoid prosecution.

In the second case, which revolved around the Sherman Act's definition of "predatory pricing," DOJ failed to prevail... however the facts (which is what I cited) weren't disputed. There has never to my knowledge been a successful prosection of "predatory pricing" in the entire history of the Sherman Act. The fact that DOJ would even try to mount a prosecution in the first place is telling in and of itself.

GoBears99
Aug 23, 05, 10:09 am
In the first case, both American Airlines and Robert Crandall were forced to enter into a consent decree in order to avoid prosecution.

I meant two courts in the DOJ's predation case...trial court, and appellate court. As for a settlement with the government, don't people/firms do it all the time, because litigating against the government is costly and risky?

In the second case, which revolved around the Sherman Act's definition of "predatory pricing," DOJ failed to prevail... however the facts (which is what I cited) weren't disputed. There has never to my knowledge been a successful prosection of "predatory pricing" in the entire history of the Sherman Act. The fact that DOJ would even try to mount a prosecution in the first place is telling in and of itself.

Why is it telling? They lost on summary judgment. All it tells me is that they didn't like the result of competition.

Predation may be hard to prove, but that's because most economists think its rarely if ever successful. Even if you try to predate someone, all you typically do is lose a ton of money, give consumers the benefit, and never recoup the loss.

HKG_Flyer1
Aug 23, 05, 4:41 pm
As for a settlement with the government, don't people/firms do it all the time, because litigating against the government is costly and risky?
Ummm.... sometimes. Othertimes, they settle when the government has in its position a tape recording of the president of a company telling its major competitor to increase fares by 20% and then it will, as well. (In other words, when they're guilty as sin.)


Why is it telling? They lost on summary judgment. All it tells me is that they didn't like the result of competition.
The government is loath to devote resources to prosecutions in a whimsical manner.


Predation may be hard to prove, but that's because most economists think its rarely if ever successful. Even if you try to predate someone, all you typically do is lose a ton of money, give consumers the benefit, and never recoup the loss.
All true. Of course, sometimes, you end up driving numerous weaker competitors from your fortress hub, increasing your market share to 85%, and reverting to charging some of the world's highest airfares per mile.

JS
Aug 23, 05, 5:18 pm
Actually, I don't fly AA that often out of DFW (I used to fly AA almost exclusively when I lived in other domestic markets).

A lot of the reason is due to fares. The high cost of travel between here and most everywhere outside the Wright Amendment perimeter makes it harder to justify trips, whether for business or pleasure.

With respect to long-haul trips I do make, it is kind of tough to find compelling options. AA has an 85% market share at DFW, and the nearest alternative airport allowed to provide long haul service is roughly 200 miles away. The amount of service offered by other airlines here in the Metroplex is more akin to that of a smallish secondary city. At times, there's really no other choice.

Also, some of the other airlines flying into DFW take AA's disinterest in low prices into account and their history of "going to war" with carriers who dare to try to undercut AA's high DFW prices when pricing their fares. As a result, the limited alternatives available out of DFW (most "competitors" only have an approximate 1% market share) tend to be priced at jacked up amounts... in full knowledge of the fact that AA won't attempt to undercut them.

ACT, TYR and SPS are the three closest airports allowed to provide long-haul service, and they aren't 200 miles away (granted, not a trivial distance). Check the fares on short-notice trips; it is often cheaper to fly from a small airport with a large or 100% AA market share and connect in DFW that it is to fly directly out of DFW.

For example, going to SAN leaving August 29 returning September 2 (no 7 day advance purchase, and no Saturday night stay), the roundtrip fares including tax on AA are:

$1011 from DFW non-stop
$367 from ACT via DFW
$976 from TYR via DFW
$1027 from SPS via DFW
$356 from OKC via DFW/ORD

So, in this case, if you assume that the DFW fare drops to the OKC fare without the Wright Amendment, you would save a whopping 11 dollars off the roundtrip fare compared to ACT's fare today. It probably wouldn't go down that much, because even today, legacy carriers still have a hub premium with LCC competition, just not nearly as much as before.

Does it require more time to drive to ACT than to DFW from most points in the Metroplex? Yep. Is ACT closer than OKC or AUS? Yep. Is ACT or OKC or AUS less convenient than DFW if you are going to change planes in DFW anyway? Yep.

Check the fares out of ATL on Delta and compare them with BHM or GSO -- they aren't in the $1,000 range, but they aren't necessarily dirt cheap.

Not only that, but you can fly to OKC or AUS or whatever on one fare, and then to the Southwest destination on a Southwest-matching fare, all on one ticket. That would be more convenient than driving.

Southwest has choices, and chooses not to fly out of DFW, and you have choices. You can drive to several other airports, you can fly there and back, or you can pay more for a non-stop flight. Choices, choices, choices...

GoBears99
Aug 24, 05, 12:12 pm
Ummm.... sometimes. Othertimes, they settle when the government has in its position a tape recording of the president of a company telling its major competitor to increase fares by 20% and then it will, as well. (In other words, when they're guilty as sin.)

Guilty of what? Read the case...it's a famous one. Crandall did not commit an antitrust violation because Putnam never agreed to anything. Fares never went up. Solicitation does not violate the Sherman Act.

The government is loath to devote resources to prosecutions in a whimsical manner.

Apparently not very loath in this case, since they lost. To argue that prosecutors only bring cases against the guilty is a pretty scary concept that kind of flies in the face of the Bill of Rights. Moreover, the DOJ's predation case against AA was civil, not criminal, so it wasn't a "prosecution" (just to be technical about it).

All true. Of course, sometimes, you end up driving numerous weaker competitors from your fortress hub, increasing your market share to 85%, and reverting to charging some of the world's highest airfares per mile.

Which, if true, would bring in new entrants. For conduct to be predation, one must price below average variable cost. AA never did that; indeed, they never undercut Vanguard (unlike WN, which routinely undercuts competitors...like B6 when it dared tread upon WN's sacred ground). Moreover, there must be barriers to entry that prevent new entry for a sufficient period of time to allow the predator to recoup the losses. Yet we see new airline entry all the time. So this can't work either.

Vanguard failed because its business model sucked. AA and jetBlue got in a big battle over LGB-JFK. jetBlue, unlike Vanguard, was well capitalized and well managed. And they drove AA off the route. So maybe it's a question of who's got the better firm, not predation.



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