Wings Level
Active member
- Joined
- Jan 23, 2002
- Posts
- 31
In the last few days there has been many good articles
posted by USA Today about the airline industry. Here
is one that talks about South West's plans to go coast-to-coast.
While it is my opinion that new routes are always a positive step
forward for pilots (especially additions made by majors), I am
hesitant to believe that this will be positive for the industry as a whole. Instead of creating market share, the additional route will
seek to take market share. To accomplish this, they will increase pressure on price competition which will make it difficult for the indutry as a whole to make a healthy profits from bread and butter routes.
While it is likely that South West plans is to compete as a low cost alternative "without the frills" alternative. How will passengers embrace the lack of additional comforts often provided with long haul flights?
As we are well aware, when profit margins get slimmer, management places more focus on the variable costs such as
meals and pilot compensation, etc. With fares becoming less expensive all the time, how much more will varible costs be reduced to make an unprofitable flight into a profitable one.
I have to admit that it's exciting to see South West open new
routes. I've always admired the airline and wish their pilot group
the best.
I'm curious to hear the opinions of others on this recent event. What measures will other airlines take to protect their market share? What kind of analysis did the airline make to dertermine
that this would be a profitable additition. Will the addition of the
new 737s have a negative effect on the low cost maintenance of South West's homogeneous fleet of older 737 200's?
What do you think?
http://www.usatoday.com/money/biztravel/2002-05-07-southwest-flights.htm
posted by USA Today about the airline industry. Here
is one that talks about South West's plans to go coast-to-coast.
While it is my opinion that new routes are always a positive step
forward for pilots (especially additions made by majors), I am
hesitant to believe that this will be positive for the industry as a whole. Instead of creating market share, the additional route will
seek to take market share. To accomplish this, they will increase pressure on price competition which will make it difficult for the indutry as a whole to make a healthy profits from bread and butter routes.
While it is likely that South West plans is to compete as a low cost alternative "without the frills" alternative. How will passengers embrace the lack of additional comforts often provided with long haul flights?
As we are well aware, when profit margins get slimmer, management places more focus on the variable costs such as
meals and pilot compensation, etc. With fares becoming less expensive all the time, how much more will varible costs be reduced to make an unprofitable flight into a profitable one.
I have to admit that it's exciting to see South West open new
routes. I've always admired the airline and wish their pilot group
the best.
I'm curious to hear the opinions of others on this recent event. What measures will other airlines take to protect their market share? What kind of analysis did the airline make to dertermine
that this would be a profitable additition. Will the addition of the
new 737s have a negative effect on the low cost maintenance of South West's homogeneous fleet of older 737 200's?
What do you think?
http://www.usatoday.com/money/biztravel/2002-05-07-southwest-flights.htm