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In article vM1Ig.118$c07.112@fed1read04, Sam Spade
wrote: There's more than one? I thought JetBlue and Southwest were both profitable... Southwest has been profitable recently because of fuel hedging. That is running out. Southwest has been profitable every year for some 30+ years. Their fuel hedge has expired and been renewed several times. The fuel hedge isn't the reason that they've been profitable, it is simply one of the reasons. The big reason is that management runs the company well and treats the employees well. In turn, the employees work hard for the company and the customers. That "big reason" is missing in most of the other major carriers. I am concerned, however, that Southwest is beginning to lose its spark, and mess with a model that has worked well for 30+ years. JKG |
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Jonathan Goodish wrote:
Southwest has been profitable every year for some 30+ years. Their fuel hedge has expired and been renewed several times. The fuel hedge isn't the reason that they've been profitable, it is simply one of the reasons. The big reason is that management runs the company well and treats the employees well. In turn, the employees work hard for the company and the customers. That "big reason" is missing in most of the other major carriers. I am concerned, however, that Southwest is beginning to lose its spark, and mess with a model that has worked well for 30+ years. JKG I should have said Southwest has been profitable recently primarily because of fuel hedges. When Herb stepped down the special status of the employee groups is slowly descending into the morass that is typical of all U.S. airlines. The other reason SWA has made money is by operting only one type of aircraft (one of the cheaper to buy and maintain). It prevents them from being an international carrier, though, which means they are not full service in that sense. They have also saved money by not playing with the other airlines, such as interline baggage transfers, which does not serve their customers well. Having said that, all in all, SWA does better than most, but not as good as they used to. And, their fares are generally higher than the compeition, although they seem to be able to gloss over that. I use American often to fly LAX to IAD for $350 or so round trip. I also use SWA to fly SNA to OKC, $650 rount trip. |
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Airlines don't need to be full service. That's exactly why they are not
making a profit. Each of the majors is trying to be all things to all people and compete with every other airline on every front. With the exception of a few airlines, they have lost the concept of value and have made their seats into commodities, competing only on price. It doesn't have to be that way, but the majors are run too poorly to do anything about it. The majors could choose niche markets just like SWA and JetBlue have done and then they would be able to charge a fair price for their tickets and make a buck. Instead, they try to compete with JetBlue and SWA by cutting every cost they can - charging for food and standby changes, reducing the quality of maintenance on the planes, reducing the quality of the staff, and reducing the amount of legroom so they can fit a few extra seats (even though the net result is many flights end up empty), Basically they have reduced the value of the service they offer - making it worth less than the $300 you paid to get to LAX because it is such a miserable experience... They are putting themselves out of business. Sam Spade wrote in news:uTeIg.165$c07.55@fed1read04: Jonathan Goodish wrote: Southwest has been profitable every year for some 30+ years. Their fuel hedge has expired and been renewed several times. The fuel hedge isn't the reason that they've been profitable, it is simply one of the reasons. The big reason is that management runs the company well and treats the employees well. In turn, the employees work hard for the company and the customers. That "big reason" is missing in most of the other major carriers. I am concerned, however, that Southwest is beginning to lose its spark, and mess with a model that has worked well for 30+ years. JKG I should have said Southwest has been profitable recently primarily because of fuel hedges. When Herb stepped down the special status of the employee groups is slowly descending into the morass that is typical of all U.S. airlines. The other reason SWA has made money is by operting only one type of aircraft (one of the cheaper to buy and maintain). It prevents them from being an international carrier, though, which means they are not full service in that sense. They have also saved money by not playing with the other airlines, such as interline baggage transfers, which does not serve their customers well. Having said that, all in all, SWA does better than most, but not as good as they used to. And, their fares are generally higher than the compeition, although they seem to be able to gloss over that. I use American often to fly LAX to IAD for $350 or so round trip. I also use SWA to fly SNA to OKC, $650 rount trip. |
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