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Not sure how Norwegian adding Transatlantic flights which SWA doesn't fly is a threat to SWA market share.
Norwegian is not a competitor, but it is an example of an airline following Southwest's example of using B737s to break into new markets that were previously dominated by legacy carriers.
In terms of profits Southwest is still the little guy
American Airlines Group $7.61B
United Continental Holdings $7.1B
Delta Air Lines $4.7B
Southwest Airlines $2.2B
Quote:
Originally Posted by oceangaia
What do you mean by "expand into Mexico"? Airline protectionism generally keeps foreign carriers from serving domestic routes. Don't expect to see SWA flying Mexico City to Guadalajara any time soon, if ever.
Of course I meant international traffic between USA and Mexico. The international traffic to the USA has always dominated flying in Mexico, and there is no such thing as a 100% domestic airline in Mexico.
In November 2008, Volaris announced a codeshare agreement with US-based low-cost carrier Southwest Airlines. On February 22, 2013, Volaris and Southwest stopped codesharing. Southwest decided to focus more on the Mexican market instead of codesharing with Volaris. But that was over 4.5 years ago, and Southwest still has very few flights into Mexico.
Quote:
Originally Posted by oceangaia
Their strategy has been growth when it makes sense, not growth for the sake of growth. Perhaps we are just in a period where it does not make sense?
I am not saying that SWA is a poorly run company. I am just saying that they are no longer the hungry beast that they were for 40 years.
What do you mean by "expand into Mexico"? Airline protectionism generally keeps foreign carriers from serving domestic routes. Don't expect to see SWA flying Mexico City to Guadalajara any time soon, if ever.
Maybe this table helps
27.76 Million Air passengers went from USA to Mexico. They were carried by the following major carriers
17.9% American Airlines Inc.
15.3% United Air Lines Inc.
10.3% Delta Air Lines Inc.
5.7% Southwest Airlines Co.
5.5% Alaska Airlines Inc.
19.50% Other Airlines (mostly USA)
In 4.5 years since Southwest broke their code sharing agreement with Volaris to expand into this market on their own, Southwest still has a little more than half of Volaris's share.
In 4.5 years since Southwest broke their code sharing agreement with Volaris to expand into this market on their own, Southwest still has a little more than half of Volaris's share.
And? Are you saying it was a bad business decision to not code share with Volaris? On what grounds? Maybe 5% market share on their own is more profitable than 10% code shared with Volaris.
And? Are you saying it was a bad business decision to not code share with Volaris? On what grounds? Maybe 5% market share on their own is more profitable than 10% code shared with Volaris.
In the meantime, Volaris is adding it's 25th USA airport this fall. Even Aeromexico has only 17 USA airports, with 2 more coming this fall. I don't know how many routes Volaris has in place as each USA city often has service to at least Mexico City and Guadalajara, and often to Monterrey.
That means Volaris has already grabbed a huge chunk of the "visiting friends and relatives" market. They tend to concentrate on cities with large Mexican American populations.
Traditionally Southwest concentrated on the friends and family market. By moving very slowly in Mexico they may end up solely in the tourist market where there is already lots of competition, especially by charters.
I'm not sure what your entire point is here. When directly asked about any particular move if you think SWA is making a bad business decision, you say you're not saying that then go on to insinuate that by lamenting their lack of aggressive growth recently and touting the aggressive growth of some other players. There are plenty of corporations, especially in retail and restaurant franchises, that destroyed themselves through aggressive growth for the sake of growth with apparent disregard for net profitability. Will Volaris still be around in 10 or 15 years? I'm pretty sure SWA will be.
What would you have SWA do differently than they are currently doing and how do you think it would make them stronger (not just "bigger") as a company?
Back then, SWA could pick out underserved airports in or near big metro areas, and go in with low fares and frequent service.
But now, where can they go where they (or other low-cost carriers) don't already fly? Looking at the western states (the area I'm familiar with) they've added a few flights at Long Beach, when the city opened more slots. And it's a mystery to me why there isn't better air service out of Fresno. But aside from those, I don't know what western cities they could add where there's enough population and business activity to fill a 737 a few times a day. The only way I could see them expanding is by flying to small airports with a lower-cost lower-capacity aircraft like the Q400. But that doesn't seem to suit their model of one-aircraft-type.
In 4.5 years since Southwest broke their code sharing agreement with Volaris to expand into this market on their own, Southwest still has a little more than half of Volaris's share.
That is not why they broke their code sharing agreement.
But now, where can they go where they (or other low-cost carriers) don't already fly? Looking at the western states (the area I'm familiar with) they've added a few flights at Long Beach, when the city opened more slots. And it's a mystery to me why there isn't better air service out of Fresno. But aside from those, I don't know what western cities they could add where there's enough population and business activity to fill a 737 a few times a day. The only way I could see them expanding is by flying to small airports with a lower-cost lower-capacity aircraft like the Q400. But that doesn't seem to suit their model of one-aircraft-type.
Southwest Airlines built itself up on tiny airports like Harlingen Valley International in Texas. They still service that airport without adding special tiny airplanes.
Recent additions of very small airports like Cincinnati/Northern Kentucky International Airport which is only 14.4% of the passenger load of a bigger Southwest airport like Las Vegas have been added to the the SWA roster.
Originally, I started this thread by simply stating a fact. Over a five year period when you consider the change in the number of trips per annum for SWA, for the first time in their history it was a negative percentage over a five year period. This is a simple fact derived from their annual reports. Twenty years ago they were doubling their trips over a 5 year period.
Change in number of trips over 5 year period
-0.5% 2016
13.7% 2015
11.6% 2014
10.2% 2013
17.3% 2012
20.7% 2011
08.3% 2010
14.6% 2009
25.4% 2008
22.5% 2007
16.2% 2006
13.8% 2005
15.9% 2004
17.7% 2003
20.5% 2002
25.6% 2001
31.8% 2000
35.6% 1999
47.7% 1998
79.4% 1997
95.6% 1996
That means even if they increase frequency in one route, they are offsetting it with cutting flights in another route.
Recent years also coincide with a record drop in price of fuel. SWA paid the following rates
$1.92 2016
$2.07 2015
$2.92 2014
$3.12 2013
$3.28 2012
$3.19 2011
Clearly some people think there is nothing wrong with fine tuning the existing network by retiring old jets and replacing them with new larger and more efficient ones. I mean against all odds, they have formed the largest domestic carrier in the entire world.
That's not bad business, but it seems to be a fundamental change from the whole history of SWA.
Southwest Airlines built itself up on tiny airports like Harlingen Valley International in Texas. They still service that airport without adding special tiny airplanes.
Recent additions of very small airports like Cincinnati/Northern Kentucky International Airport which is only 14.4% of the passenger load of a bigger Southwest airport like Las Vegas have been added to the the SWA roster.
Gee, I didn't think CVG is considered a "very small airport", at least in physical size; wasn't it a Delta hub at one time? Perhaps it is relatively small in passenger volume given that it's shrunk a lot after Delta cut a lot of their service there, particularly after they filed for Chapter 11 in 2005.
Gee, I didn't think CVG is considered a "very small airport", at least in physical size; wasn't it a Delta hub at one time? Perhaps it is relatively small in passenger volume given that it's shrunk a lot after Delta cut a lot of their service there, particularly after they filed for Chapter 11 in 2005.
Keep in mind that I was responding to this post.
Quote:
But now, where can they go where they (or other low-cost carriers) don't already fly? Looking at the western states (the area I'm familiar with) they've added a few flights at Long Beach, when the city opened more slots. And it's a mystery to me why there isn't better air service out of Fresno.
The implication was that there were no domestic airports left of sufficient size for Southwest to expand into. In fact since the Air Tran merger Southwest has added two new airports. Since he already mentioned Long Beach and Fresno, I was simply mentioning the other one.
#52 CVG Greater Cincinnati International Airport
#78 LGB Long Beach /Daugherty Field/
#101 FAT Fresno Yosemite International
Quote:
But aside from those, I don't know what western cities they could add where there's enough population and business activity to fill a 737 a few times a day. The only way I could see them expanding is by flying to small airports with a lower-cost lower-capacity aircraft like the Q400. But that doesn't seem to suit their model of one-aircraft-type.
Southwest established itself by flying into very small airports without having to adopt a smaller model of aircraft. Probably the smallest airport that Southwest services is:
#166 HRL Harlingen Valley International
While it is certainly true that there are not as many airports that Southwest can obviously add to their network. I mentioned earlier that SWA doubled their flights twenty years ago over a five year period. Well they also increased their airports by 50%.
Today SWA flies to 86 airports in continental USA, and one of them is ranked #166. That implies that there must be some airports that are available.
In any case the operative statement is that SWA has actually reduced the total number of trips from 2011-2016. So even new trips from new airports like CVG and LGB and the 14 foreign airports are being offset by reductions of routes or frequencies from the old airports.
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it was so much easier in the 1980s...
