This week’s featured link:
Original Disruptor Southwest Airlines Survives on Ruthless Business Savvy – Skift
Here’s a nice, non-fluffy article about Southwest, where it has come from, and where it may be going. Too many Southwest articles focus on the origin story and gloss over the nuts and bolts of what’s happened since then. This one doesn’t.
Two for the road:
Norwegian Air Starts Selling $18 Tickets for Argentina Flights – Bloomberg
The long-awaited Norwegian adventure in Argentina has begun… just in time for the currency to tank. I just see no situation where this ends well for Norwegian. At best, it’s a distraction. At worst, it’s a big problem for a company already on shaky footing.
Flyback Friday: Bellanca Comes Home – Hawaiian Airlines Mana’o
Is there a better way to end the week than dreaming of flying 100 year old airplanes in Hawai’i? I had the chance to fly the Bellanca a couple years back, and it was a truly unique experience.
14 comments on “3 Links I Love:”
Interesting read on Southwest. Said much of what I’ve seen. Surviving a lot on blind loyalty and past reputation – and where they have to compete I’ve never seen them with the lowest fares. Maybe if I’m checking two bags but that’s almost never so it’s not a differentiator to me. Surprised they didn’t get into the efficiencies of the single fleet, which I find a plus. I have nothing against WN but see them as the 4th legacy carrier. Humble beginnings but these days they aren’t much different from your DL’s, AA’s and UA’s.
For me, the lack of change fees and the credit card->companion pass are the two things that differentiate them from the other 3 legacies. I don’t kid myself that their base fares are low, but keeping a companion pass drops their effective cost significantly for us.
Yes, from a leisure-passenger perspective, the absence of change fees is hugely important.
The lack of assigned seats is irritating, but I nearly always manage to get a window anyway.
Agree 100%. My older relatives are very loyal, but I (millennial here) have flown with them less and less in the last 10 years. Their prices aren’t that low, I never fly with 2 bags, remembering to check in at exactly -24hrs is a hassle, and lately I’ve had lots of problems with delays and screwy connections with them. I use them most often when I need the flexibility to change dates. Also love the free drink tickets and the relative quickness in which I can earn a free segment. But it’s not that much of a differentiator. Hope they figure out a new model to keep them competitive because I do respect them as a company.
For me, the big benefits of Southwest are:
1. For those of us in mid-sized markets like Sacramento, we get a lot more flight options since their strategy is not just to pump us through LAX/PHX/SLC/DEN. United’s strategy is to make as many people use SFO as possible as they don’t even fly out of OAK anymore and have limited options from SJC and SMF. Driving all the way to the Bay Area only makes sense if you’re saving hundreds of dollars.
2. They have one of the better leg rooms, even in non exit row seats. Plus, if I do Early Bird, or even 24-hour checkin, I often get an exit seat. For someone who is 6′ 5″, this is a huge deal. On UA/DL/AA, I’m paying anywhere from $30-upwards of $100 for extra legroom, per segment, and sometimes this isn’t for much more legroom. Alaska and JetBlue are the only other ones with good standard legroom.
When it comes to complaints about open seating, you basically are doing the same thing when you preassign seating in that seats get taken on a first come first serve basis, online in the case of preassignment. Except, with open seating, you actually get to see the seat you’re going to be sitting in.
3. The no change fees and easy access to award travel is very much a positive differentiator.
The whole thing about Southwest having more legroom than the legacies is pretty misleading, for one simple reason.
Currently, the 737-700s that they fly have 31” of pitch in economy, on par with most legacies, and the -800s and MAX 8s have 32-33. The thing is, Southwest has over 500 -700s, accounting for about 70% of the fleet. This means that you are more likely to get a seat with 31” pitch than the 32-33”.
Yet I have seen several articles that state that Southwest has 32-33” legroom on ALL planes, while American, Delta, and United are 31”.
Sure, if you are flying on an -800 or MAX 8, the 32-33” legroom will be better than legacies with 31”. But given that 70% of the fleet has 31”, it would be a stretch to say, flat out, that Southwest has more legroom than the legacies.
I guess this is more anecdotal than anything, but from experience on a lot of 700s, I’ve found Southwest’s 31 inches to be a bit better than the the other guys’ 31″. For me, every millimeter counts. Still, for $15 for the whole one-way trip I can get as much or more room than economy plus 80% of the time.
Plus 30″ is popping up on a lot of DL/UA/AA planes
I’d say more than free bags, no change fees is the big differentiator. Southwest has gotten marginal revenue from me several times where I have a business/pleasure trip where there’s uncertainty on the timing. I actively book away from the legacies where that’s the case. And it’s saved me several hundred dollars (and won WN some loyalty and good press) in the process.
But I do agree with the premise generally – they’re going to need to find another trick or two up their sleeves to stay relevant in the long-term.
In my market (BWI), Southwest has a fortress hub (even though they wouldn’t call it that). They control something like 72% of the traffic. This creates a virtuous cycle: fly WN nonstop to multiple cities nationally, rack up Rapid Rewards points, get the WN credit card and rack up more, repeat. The article is spot on – their original model no longer applies, except as it relates to smaller cities in the southwest. Having said that, I’ve rarely had a bad experience flying WN – if nothing else, they are consistent.
I think 90% of loyalty lands where you live. For me WN means a stop at MDW for almost anywhere I want to go. Clients in Nashville fly them everywhere because WN flies everywhere from there. Time is money so those connections are killer for business travel. Leisure travel I can stomach it but still the fares rarely make it desirable.
Hi Cranky, Great story on Southwest but it missed (as almost always happens) the real origin of the airline. That origin was California’s Pacific Southwest Airlines (PSA). The founders of WN spent quite a bit of time in San Diego where they met with PSA management and observed their operation. When WN started flying it was a direct copy of PSA, an interstate airline with bright colors, lots of frequency, low fares and flight attendants in hot shorts. Unfortunately for PSA their management did not have the skill and vision to successfully make the transition from interstate airline to a larger intrastate airline. WN, on the other hand, not only mastered that transition but grew into one of the largest and most successful airlines in the country.
The most accurate reason noted in the article for WN’s long-term success is that they work tiredlessly to dominate their markets, exclude competitors from them, and then ultimately gain higher average fares from their fortress markets than other carriers get from comparable markets. The only legacy carrier hub where WN has ever done really well is Denver and they grew rapidly there because of their fuel hedge gains post 9/11 when the legacy carriers didn’t have them and also because of Frontier’s inconsistent competitive strategies. They grew in Philadelphia and then pulled back a number of markets, just as they have done in Atlanta. They really do not want to compete directly against other carriers in their major hub/focus city markets and don’t do well when they have to – until they reach a large enough size that they can compete on a similar basis in terms of schedule, which is what happened in Denver. Southwest controls a far higher percentage of passengers at its largest airports than any other US airline.
There is no excuse for Dallas Love Field, now one of the US’ top 25 airports by passenger boardings, to be dominated to the tune of 90 % by one carrier – any carrier – with competitors having a token presence with no potential to grow.
Southwest provides solid air transportation to the masses, treats its passengers and employees well, and is one of the most profitable airlines in the history of commercial aviation. But they succeed based on a very carefully defined strategy which is predicated on them controlling markets in ways that no other carrier could or does get by with. Ruthless is a pretty accurate description of their strategies.
I work for one of the big three legacy carriers, and as such get a 20 percent discount when I buy tickets on my own airline. Most of the time, if Southwest flies the route I need I buy Southwest, simply because they don’t have change fees, and if I need to I can cancel my outbound flight and keep my return. Those are two huge advantages they have over every other airline I’m aware of. I’m super proud of the work I do and the service I provide my customers, but I’m sad to say my travel dollars often go to the competition.