hear about they’re CUT BACKS?

http://www.azcentral.com/arizonarepublic/business/articles/2009/10/25/20091025biz-insider1025gilbertson.html?&wired#

To me at least, there’s a big difference between good justification and profitability. I’d be curious if these aren’t enough to constitute good justification :

I agree that immediate profitability isn’t the only thing that matters, but that needs to be there in the end. My problem is that I don’t see that happening right now.

* DIA is the main airport for the Front Range’s 4+ million residents. Colorado Springs is the only exception for scheduled passenger service. The areas population is projected to grow to over 6+ million over the next two decades

Sure, but New York is even bigger, so maybe they should focus all their efforts there and buy a bunch of slots. I think it’s GE’s (?) mantra that they have to be first or second in a market or they don’t want to be there. The top guys in a market get the biggest benefit, so just because a market is big doesn’t mean it’s a good place to be.

* UAL still controls most of the market and arguably are not in a good position to give a good fight against Frontier and SWA

I would argue that UA is in a better position to fight now than they have been over the last few years. They also haven’t done much fighting – they’ve just cut back. That should probably change now.

* Frontier isn’t exactly a given to survive. They were unable to emerge from bankruptcy on their own. Republic is taking on a lot in Frontier let alone Midwest Airlines at the same time.

But Southwest has been putting the pressure on for quite awhile, and Frontier has been turning in some excellent results. Nobody can emerge from bankruptcy without exit financing – it just so happens theirs came from another airline. That doesn’t change the fact that they’ve been making good money lately.

* DIA’s a good place to operate flights
…and there’s more but it’s a start. Surely SWA seems a lot here in Denver that they keep expanding.

Strategically, it’s a great market in a great location with an uncrowded airport, but I still don’t see where Southwest wants to go with this.

Sounds like a couple blog posts or even articles could be spent delving into this one.

To me at least, there’s a big difference between good justification and profitability. I’d be curious if these aren’t enough to constitute good justification :

* DIA is the main airport for the Front Range’s 4+ million residents. Colorado Springs is the only exception for scheduled passenger service. The areas population is projected to grow to over 6+ million over the next two decades
* UAL still controls most of the market and arguably are not in a good position to give a good fight against Frontier and SWA
* Frontier isn’t exactly a given to survive. They were unable to emerge from bankruptcy on their own. Republic is taking on a lot in Frontier let alone Midwest Airlines at the same time.
* DIA’s a good place to operate flights

…and there’s more but it’s a start. Surely SWA seems a lot here in Denver that they keep expanding.

CF, United is also starting service between STL and SFO in February using an A319 – which means the return of Mainline to STL – which is ironic, they just laid ** all ** the Mainline staff off, only to bring them back.

Are you sure they’ll bring them back? I bet they’ll just have the express staff handle the mainline flight. I still think their goal is to have no actual employees at United itself.

jordan wrote:

WN is in an outright fight for DEN. Can they win it. YES!!! They can throw the kitchen sink, and house at DIA if they choose to! Why? Because they CAN! haha! They have never lost a huge battle. Call it Texan pride or whatever. This airline has ALOT of money! …and I mean ALOT!! they can afford to take substantial losses!

Please explain how they can win it. United and Frontier are doing just fine there, and Southwest is the laggard in third place by far alongside most metrics. Just adding more flights isn’t going to magically make them profitable. I understood it in the first place – if Frontier goes away, Southwest can move in and make a nice living. But now I don’t see that happening anytime soon, and I don’t see Southwest doing anything to change their situation there. (I don’t even know what they could do.)

If any of you are aware of the battles at LHR and the huge losses all the US carriers took across Europe in the 90s (DL with its PA/FRA hub’s horrendous losses) A clearer understanding would come as to what WN is up to.
(1) Market share! ..at any cost and loss, they want DEN
(2) They can force F9 into huge losses, and this will start to happen..then they will get Republic within 24 months! F9 can bleed Republic down, more than any other area of their operations!.

Whoa, wait a second here. First of all, London is a highly constrained airport so that was something clearly worth holding on to. Delta with Pan Am was probably a smart move to get all those route authorities at the time. It took them forever to make it work. Domestic is much more simple. Southwest can add as many flights as they want to any domestic market from Denver (except for a couple slot-constrained destinations). So what is going to change?

You say they can bleed Frontier, but they haven’t been able to do so yet. Frontier is thriving these days, to my complete surprise. All numbers show that they’re really holding down the fort quite nicely in DEN and Southwest hasn’t made much of a dent. So, again, what’s going to change?

Which is so American in nature.. “must make profits only” NO NO NO
Virgin America can afford to sustain losses for a long long time! Cause of the Virgin name! But slowly, there is a game plan coming into place with V and VS. They know what they are doing at Virgin America, and their turnaround will be swift when they are ready. They can sustain $100 million dollar losses for 10 years if need be! WHY? Because Virgin America was a lifelong dream of Bransons… and dear Americans. You cannot put a price on dreams!

Huh? Branson is not allowed to put any more money into that airline, so the idea that they can keep bleeding forever is just not true. Please explain what this game plan is between Virgin America and the rest? Branson has already failed in Europe (Virgin Express) and in Africa (no longer Virgin Nigeria). Oh, and Virgin Charter shut down today.

He succeeded with Virgin Atlantic thanks to slot constraints in London and the addition of Virgin Atlantic as a designated carrier between Heathrow and the US. Virgin Blue succeeded because Ansett shut down and left a huge hole. But that’s it. I’m not nearly as convinced about Virgin America as you are.

However, is it possible that in their exploration to purchase Frontier they saw something in their books or business plan or load factors that they found encouraging? Perhaps they realized from Frontier that they don’t need to spend the money to purchase Frontier to beat them out of the market. They could sustain $3-4million dollar quarterly operational losses in Denver for 25 years and would still spend less than they were willing to spend in one shot to rub them out. Or perhaps this is too simplistic of a thought.

WN is in an outright fight for DEN. Can they win it. YES!!! They can throw the kitchen sink, and house at DIA if they choose to! Why? Because they CAN! haha! They have never lost a huge battle. Call it Texan pride or whatever. This airline has ALOT of money! …and I mean ALOT!! they can afford to take substantial losses!

Im not a huge fan of WN. But Ive always had nice flights on them, and their planes are always clean

Its fairly clear, that most topics on this site ( a site I enjoy) are mostly domestic in nature of operational politics! If any of you are aware of the battles at LHR and the huge losses all the US carriers took across Europe in the 90s (DL with its PA/FRA hub’s horrendous losses) A clearer understanding would come as to what WN is up to.

(1) Market share! ..at any cost and loss, they want DEN
(2) They can force F9 into huge losses, and this will start to happen..then they will get Republic within 24 months! F9 can bleed Republic down, more than any other area of their operations!.

So many posts on Virgin America and their losses!

Which is so American in nature.. “must make profits only” NO NO NO

Virgin America can afford to sustain losses for a long long time! Cause of the Virgin name! But slowly, there is a game plan coming into place with V and VS. They know what they are doing at Virgin America, and their turnaround will be swift when they are ready. They can sustain $100 million dollar losses for 10 years if need be! WHY? Because Virgin America was a lifelong dream of Bransons… and dear Americans. You cannot put a price on dreams!

A fun fact. Fox News (not really news, but anyway – lol) They lost $110 million per year, for 5 years..before they turned a profit! They kept going…why? See above! :)