SWA-Airtran merger good for RAH - frontier
05-04-2011, 07:52 AM
#11
Gets Weekends Off
Joined APC: Aug 2008
Position: 737 right
Posts: 121
RAH/F9 needs to open another hub if they want to compete. DEN is a good one, MKE has promise to be a good focus city if they really hit the northern Chicago market as well as WI. But the airline needs to either expand MCI or create another focus city if they wish to compete.
05-04-2011, 09:54 AM
#14
Che Guevara
Joined APC: Aug 2005
Posts: 6,408
RAH/F9 needs to open another hub if they want to compete. DEN is a good one, MKE has promise to be a good focus city if they really hit the northern Chicago market as well as WI. But the airline needs to either expand MCI or create another focus city if they wish to compete.
05-04-2011, 02:25 PM
#16
Gets Weekends Off
Joined APC: Feb 2009
Position: right for a long, long time
Posts: 2,642
1. Removal of a lower paid group of pilots will help the average wage go up and allow everyone to ask for even higher wages during the next round of contract negotiations.
2. Removal of a competitor in general.
3. SWA flies and prices to make money, rational players make the entire industry more stable. (SWA in ATL will NOT induce the so called "Southwest Effect", as ATN has already induced the effect of a large low cost carrier on fares in the ATL area.)
4. Across the board, SWA pays their employees in the area of 20-35% more than ATN paid their employees.
4a. in 2008 ATN had over 400 departures a day out of ATL, recently they are down to around 300.(i.e. DAL is winning the ATL battle).
4b. SWA's labor costs are in the 35% range of total expenses, and SWA labor is 30% more expensive than ATN. The math makes that a 10% increase in ticket prices to make up for the increase in costs to pay the SWA way.
4c. DAL has already forced ATN to retreat by 25% in ATL, once the costs rise by another 10%(remember, SWA is out to make money, not fly airplanes around with cheap tickets just for fun), SWA will have to do a lot to beat DAL in ATL.
5. SWA doesn't have assigned seating or business/first class. Many business travelers (the ones who pay the big $$$$ for seats) do not like the SWA cattle call and book away from legs on SWA unless absolutely forced. DAL offers first class, seats, meals, better service for the road warrior than SWA does. That means that the business traveler who had been using ATN will most likely come to DAL to keep the aspects of their travel that they like.
DAL is not afraid of SWA, and SWA isn't afraid of DAL. They are both large movers of people and bags that want to make money, so don't expect a fare war in ATL....In fact fares will likely go up.
Really I think both sides stand to gain here, but we'll all just have to wait and see.
2. Removal of a competitor in general.
3. SWA flies and prices to make money, rational players make the entire industry more stable. (SWA in ATL will NOT induce the so called "Southwest Effect", as ATN has already induced the effect of a large low cost carrier on fares in the ATL area.)
4. Across the board, SWA pays their employees in the area of 20-35% more than ATN paid their employees.
4a. in 2008 ATN had over 400 departures a day out of ATL, recently they are down to around 300.(i.e. DAL is winning the ATL battle).
4b. SWA's labor costs are in the 35% range of total expenses, and SWA labor is 30% more expensive than ATN. The math makes that a 10% increase in ticket prices to make up for the increase in costs to pay the SWA way.
4c. DAL has already forced ATN to retreat by 25% in ATL, once the costs rise by another 10%(remember, SWA is out to make money, not fly airplanes around with cheap tickets just for fun), SWA will have to do a lot to beat DAL in ATL.
5. SWA doesn't have assigned seating or business/first class. Many business travelers (the ones who pay the big $$$$ for seats) do not like the SWA cattle call and book away from legs on SWA unless absolutely forced. DAL offers first class, seats, meals, better service for the road warrior than SWA does. That means that the business traveler who had been using ATN will most likely come to DAL to keep the aspects of their travel that they like.
DAL is not afraid of SWA, and SWA isn't afraid of DAL. They are both large movers of people and bags that want to make money, so don't expect a fare war in ATL....In fact fares will likely go up.
Really I think both sides stand to gain here, but we'll all just have to wait and see.
05-04-2011, 03:00 PM
#17
Gets Weekends Off
Joined APC: Feb 2008
Position: Urban chicken rancher.
Posts: 6,070
1. Removal of a lower paid group of pilots will help the average wage go up and allow everyone to ask for even higher wages during the next round of contract negotiations.
2. Removal of a competitor in general.
3. SWA flies and prices to make money, rational players make the entire industry more stable. (SWA in ATL will NOT induce the so called "Southwest Effect", as ATN has already induced the effect of a large low cost carrier on fares in the ATL area.)
4. Across the board, SWA pays their employees in the area of 20-35% more than ATN paid their employees.
4a. in 2008 ATN had over 400 departures a day out of ATL, recently they are down to around 300.(i.e. DAL is winning the ATL battle).
4b. SWA's labor costs are in the 35% range of total expenses, and SWA labor is 30% more expensive than ATN. The math makes that a 10% increase in ticket prices to make up for the increase in costs to pay the SWA way.
4c. DAL has already forced ATN to retreat by 25% in ATL, once the costs rise by another 10%(remember, SWA is out to make money, not fly airplanes around with cheap tickets just for fun), SWA will have to do a lot to beat DAL in ATL.
5. SWA doesn't have assigned seating or business/first class. Many business travelers (the ones who pay the big $$$$ for seats) do not like the SWA cattle call and book away from legs on SWA unless absolutely forced. DAL offers first class, seats, meals, better service for the road warrior than SWA does. That means that the business traveler who had been using ATN will most likely come to DAL to keep the aspects of their travel that they like.
DAL is not afraid of SWA, and SWA isn't afraid of DAL. They are both large movers of people and bags that want to make money, so don't expect a fare war in ATL....In fact fares will likely go up.
Really I think both sides stand to gain here, but we'll all just have to wait and see.
2. Removal of a competitor in general.
3. SWA flies and prices to make money, rational players make the entire industry more stable. (SWA in ATL will NOT induce the so called "Southwest Effect", as ATN has already induced the effect of a large low cost carrier on fares in the ATL area.)
4. Across the board, SWA pays their employees in the area of 20-35% more than ATN paid their employees.
4a. in 2008 ATN had over 400 departures a day out of ATL, recently they are down to around 300.(i.e. DAL is winning the ATL battle).
4b. SWA's labor costs are in the 35% range of total expenses, and SWA labor is 30% more expensive than ATN. The math makes that a 10% increase in ticket prices to make up for the increase in costs to pay the SWA way.
4c. DAL has already forced ATN to retreat by 25% in ATL, once the costs rise by another 10%(remember, SWA is out to make money, not fly airplanes around with cheap tickets just for fun), SWA will have to do a lot to beat DAL in ATL.
5. SWA doesn't have assigned seating or business/first class. Many business travelers (the ones who pay the big $$$$ for seats) do not like the SWA cattle call and book away from legs on SWA unless absolutely forced. DAL offers first class, seats, meals, better service for the road warrior than SWA does. That means that the business traveler who had been using ATN will most likely come to DAL to keep the aspects of their travel that they like.
DAL is not afraid of SWA, and SWA isn't afraid of DAL. They are both large movers of people and bags that want to make money, so don't expect a fare war in ATL....In fact fares will likely go up.
Really I think both sides stand to gain here, but we'll all just have to wait and see.
05-04-2011, 03:27 PM
#19
Gets Weekends Off
Joined APC: Apr 2007
Posts: 284
Clearly, labor costs are an important component of an airline's costs. What are the overall costs between SWA and ATN (not just labor)? I think they are (were) pretty close.
The important comparison (going forward, anyway) is comparing SWA and DAL costs if you want to predict pricing. Anyone have those numbers?
The important comparison (going forward, anyway) is comparing SWA and DAL costs if you want to predict pricing. Anyone have those numbers?
05-04-2011, 05:12 PM
#20
Moderator
Joined APC: Oct 2006
Position: B757/767
Posts: 13,088
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