Originally Posted by cAAl
Well perhaps I have half a brain or less, but please explain to my why WN must impose capacity controls? As far as I can tell, WN has been financially robust for many years without them.
Losing a handful of seats on the few occasions that a non-capacity controlled award consumes space that would have gone to a revenue customer surely must be less consequential than driving away or at least disincentivizing travel by the most important of WN's customers: its frequent fliers.
There's an old saying: it it ain't broke, don't fix it. WN and Rapid Rewards certainly weren't broke. WN used to be an industry leader in virtually every regard. Now WN is on the fast track to being just another member of the very uninspiring American airline pack. Sad.
No doubt that Southwest has been financially robust for many years. Unlike other airlines, though, Southwest does not live paycheck-to-paycheck, with their eyes focused on surviving the current quarter. Southwest has a very long time horizon -- fuel hedging being just one example. Fuel hedging has paid off handsomely over the last couple of years, but the hedges do not last forever. If oil stays at $65/barrel, in a few years Southwest will be paying $65/barrel, which is more than double what they are paying now.
More costly fuel, increasing LCC competition from airlines with drastically lower wage rates, and WN labor that is very well paid and would be pretty hard to cut (WN is 100% unionized) means the future is going to be tough.