Gary Kelly: No Current Airline Like AirTran

 
Old Feb 17, 14, 9:05 am
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Gary Kelly: No Current Airline Like AirTran

Kelly reveals SWA's initial strategy included retaining 717s and ATL hub-spoke base. Blames fuel prices for retiring both.

And that no airline today is succeeding like FL in 2010:

"AirTran at its peak had about 140 aircraft. There's no one operating like AirTran was, with dual-class service and a low-cost structure. AirTran is a very strong operator and had strong customer service. You don't have really have that [today] and certainly no one that's operating all Boeing equipment."
WABE
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Old Feb 17, 14, 8:07 pm
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I need to write a book about this acquisition.
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Old Feb 17, 14, 9:46 pm
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Originally Posted by PA42 View Post
I need to write a book about this acquisition.
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Old Feb 17, 14, 9:59 pm
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He sounded pretty weak, almost indecisive in his interview. A quick check of Internet charts shows the price of fuel has seen the most stable years since the merger of the last 15 years or so, so that excuse is nonsense. Unless they brought AirTran expecting fuel prices to fall ??
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Old Feb 17, 14, 10:12 pm
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Originally Posted by PA42 View Post
I need to write a book about this acquisition.
Nothing's stopping you.. From a former Airtran marketing line.
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Old Feb 18, 14, 1:05 am
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There is. If I decided to quit the industry all together forever then no problem. Until that time happens making enemies is about the unwisest choice one can make in this small field. Alternatively someone could throw a very big sum of money at me to make the sacrifice but doubtful that will ever happen

Dont worry, there will be a time place for everything though. Especially for the truth to come out.

Last edited by PA42; Feb 18, 14 at 1:11 am
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Old Feb 18, 14, 2:07 am
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Originally Posted by LegalTender View Post
Kelly reveals SWA's initial strategy included retaining 717s and ATL hub-spoke base. Blames fuel prices for retiring both.

And that no airline today is succeeding like FL in 2010:



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Hmmm Not that I'd want WN to buy them, but AS / ALK has a low cost structure, they operate a two-class mainline fleet, and they are all Boeing mainline.
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Old Feb 18, 14, 9:15 am
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Hmmm Not that I'd want WN to buy them, but AS / ALK has a low cost structure, they operate a two-class mainline fleet, and they are all Boeing mainline.
Not really. AS CASM is far above any LCC.
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Old Feb 18, 14, 10:04 am
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I don't know why the decided to buy Airtran then effectively give away more than half of the airplanes and discontinue service to a third of their locations. The reasons usually given don't really make a lot of sense to me.
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Old Feb 18, 14, 10:29 am
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Originally Posted by PA42 View Post
Not really. AS CASM is far above any LCC.
I would like to see the data. WN's CASM has increased and AS has managed theirs to the point that I don't think there's much gap.

You can argue that WN is no longer an LCC. And I'm not comparing AS to NK, but to WN.
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Old Feb 18, 14, 10:50 am
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Originally Posted by rsteinmetz70112 View Post
I don't know why the decided to buy Airtran then effectively give away more than half of the airplanes and discontinue service to a third of their locations. The reasons usually given don't really make a lot of sense to me.
I always thought the Airtran purchase was more to take out a rival than expansion. I know that publicly Southwest claimed they would use Airtran's aircraft to expand, but they cut so many of Airtran's routes, that I have to doubt the expansion plans.

I realize that Southwest took over Airtran's international routes, but that's not really worth the 3.4B that they paid (1.4B in cash and stock and 2B in debt and lease assumption). I personally thought that Airtran's business model was successful, and Southwest could learn a thing or two from it.

Airtran, I'll miss you.
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Old Feb 18, 14, 11:06 am
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Originally Posted by Justin026 View Post
A quick check of Internet charts shows the price of fuel has seen the most stable years since the merger of the last 15 years or so, so that excuse is nonsense. Unless they brought AirTran expecting fuel prices to fall ??
Here's the chart. There has clearly been a marked increase in jet fuel prices since the merger was announced in September 2010 that unlike spikes in 2005 and 2008 have been stable at increased levels for three years now. It seems like your claim that his excuse is nonsense is ... well, nonsense.
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Old Feb 18, 14, 10:01 pm
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2012 data, not sure if 2013 is out yet externally to the public. Not everyone has reported Q4 data even at the moment this post is being made.

One thing GCK has done well is understood that capacity restraint is needed at SWA will creeping up ASM growth by upping gauge gradually. YoY CASM growth (both inc and ex-fuel) is not as high as you would like to believe it to be.
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Old Feb 19, 14, 12:46 am
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Originally Posted by PA42 View Post


2012 data, not sure if 2013 is out yet externally to the public. Not everyone has reported Q4 data even at the moment this post is being made.

One thing GCK has done well is understood that capacity restraint is needed at SWA will creeping up ASM growth by upping gauge gradually. YoY CASM growth (both inc and ex-fuel) is not as high as you would like to believe it to be.
I am impressed how well WN has kept CASM low. Given unionization and aging workforce, and loss of hedging profits, I expected WN's costs to be higher than the younger LCCs. Slowing growth rates ought to increase CASM.

I wonder if some of AS's disadvantage is due to higher costs up in Alaska and perhaps Mexico and Hawaii. Of course they get higher fares on those routes too, esp. Mexico and Alaska. I do know that AS has taken a keen interest in making sure they can compete with WN, and generally AS hasn't shrunk back from competing with WN on routes where AS has a frequent flyer base at at least one end.

I'm surprised that UA has a full cent cost disadvantage to DL. That's huge.
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Old Feb 19, 14, 10:34 pm
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Good data.. I assume if/when WN enables red-eyes at least between long haul crew bases that will drop the CASM by a bunch
.
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