WN loses money at ICT; maxes out the guaranteed $6.5 mill reimbursement for losses
Oct 9, 2014, 12:41 pm
#1
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WN loses money at ICT; maxes out the guaranteed $6.5 mill reimbursement for losses
Oct 9, 2014, 3:33 pm
#2
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quite a contrast between ICT and Panama City (ECP) where Southwest was apparently so pleased with the early numbers that they cancelled a multiple-year minimum revenue guarantee less than a year into the agreement.
These smaller markets are quite justified in their fears that Southwest may discontinue service. I'd have never predicted them cancelling Key West or Branson after serving those markets for such a short time.
These smaller markets are quite justified in their fears that Southwest may discontinue service. I'd have never predicted them cancelling Key West or Branson after serving those markets for such a short time.
Oct 9, 2014, 5:41 pm
#4
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Pretty pessimistic article, makes it sound like it's just a matter of when they close the operation with just a slight of hope of it standing on its own.
I'm a little surprised, I knew ICT wasn't going to put up amazing numbers but I figured it would do okay in the Southwest network.
I'm a little surprised, I knew ICT wasn't going to put up amazing numbers but I figured it would do okay in the Southwest network.
Oct 9, 2014, 6:00 pm
#5
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Southwest has about a 68 percent load factor – how full its planes are – on the Dallas and Chicago routes from Wichita, Boyd said.
“We’ve been pleased with our operations and are meeting our performance goals. Wichita has performed very well for us and we hope to see that market grow.”
Oct 9, 2014, 6:11 pm
#6
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"The airline posted a loss of $6.83 million from July 2013 to February 2014 on the two routes to Dallas Love Field and Chicago Midway, the information said."
This much in 8 months on two routes? Is there 8x a day daily service to each? I suspect some very creative accounting here, heavy allocations of corporate expenses...
This much in 8 months on two routes? Is there 8x a day daily service to each? I suspect some very creative accounting here, heavy allocations of corporate expenses...
Oct 9, 2014, 6:14 pm
#7
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Oct 9, 2014, 6:54 pm
#8
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Maybe the contract was reviewed and signed by ICT after a bit too much free Wild Turkey 101.... Maybe Southwest got to define "Loss" as loss of "Potential" profit assuming, 90% of people booked business select and the other 10% were habitual no-shows who forfeit their fares.
Either way, I think we may have just uncovered a partial source of that "Cost Neutral" money for paying the consultants, rebranding, repainting the planes, etc.
Either way, I think we may have just uncovered a partial source of that "Cost Neutral" money for paying the consultants, rebranding, repainting the planes, etc.
Oct 10, 2014, 5:55 am
#9
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There are two flights daily from DAL to ICT during the week and one flight on the weekends.
WN can't find 300 people who want to fly to ICT instead of OKC?
WN can't find 300 people who want to fly to ICT instead of OKC?
Oct 10, 2014, 6:51 am
#10
Join Date: Mar 2012
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They are. You just need to pull the T-100 data for segments which will give you the total pax and total seats offered per month.
http://www.transtats.bts.gov/DL_Sele...Air%20Carriers
http://www.transtats.bts.gov/DL_Sele...Air%20Carriers
Oct 10, 2014, 9:13 am
#11
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I suspect that Southwest management and lawyers are aware of penalties (and taxpayer ill will) for defrauding a government entity. Allocations will be consistent across geography and time absent compelling reasons to change the methodology.
Oct 10, 2014, 9:22 am
#12
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I'd imagine the contract has some very specific language about how to calculate the "loss" which may or may not mean Southwest actually "lost" money on those flights. We know Southwest was able to make money with lower load factors in the past. For example the loss may be a theoretical loss of income based on the route performing up to the system average or some specific benchmarks.
Oct 10, 2014, 10:42 am
#13
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Wonder whether United, Delta and American are receiving similar revenue guarantees for their service? I like WN, but Kanas is laying out some serious money for duplicative service to Chicago and Dallas. And apparently the passengers aren't willing to pay WN sufficient fares for those flights (or else WN would have been profitable and wouldn't need to collect the revenue guarantee).
Unless the other airlines are also collecting subsidies, the only winners here are WN and the too-small pool of WN customers. The losers include the taxpayers and UA, DL and AA.
Unless the other airlines are also collecting subsidies, the only winners here are WN and the too-small pool of WN customers. The losers include the taxpayers and UA, DL and AA.
Oct 10, 2014, 10:54 am
#14
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I wonder if there has been a positive impact on fares on the other carriers. That's the usual reason for paying a Low Cost Carrier for service.
If the other carriers have cut their fares to compete with Southwest that could be a positive benefit for flyers and the community. It could even save money in the local economy if the fare cuts saved more than the subsidy cost.
If the other carriers have cut their fares to compete with Southwest that could be a positive benefit for flyers and the community. It could even save money in the local economy if the fare cuts saved more than the subsidy cost.
Oct 15, 2014, 8:16 pm
#15
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Wasn't ICT just another place to drop a plane for DAL-MDW 1-stops under Wright? If so, WN would have to be stingy with the cheap fare classes so they could sell the capacity as thru traffic. Now, the thru traffic is just going to take the nonstop.
It's a shame that WN can't figure out a way to profitably operate E-170s.
It's a shame that WN can't figure out a way to profitably operate E-170s.