Originally Posted by
alfaromeo
US Air is doing this because they don't have a viable business plan staying the way they are. In my view this is the first step in a controlled fragmentation of the airline. It is almost impossible for them to be bought as a whole due to the labor situation, so many think they will get chopped up, bit by bit, until there is nothing left.
Southwest has to have a culture change. Their previous business model was based on extremely low costs and finding underused airports to serve large metropolitan areas. Now their costs have crept up and there are only so many Baltimores and Providences around. They have to change to attract higher fare customers to increase their revenue. That means cracking into markets like New York, Chicago, etc. They already have a pretty big operation in Midway.
Note: This is not Southwest bashing, this is the business model that Southwest management talks about constantly. I did not make this up.
Nice username. My dad has several Alfas one of which is a 1956 1900 CSS 3-window coupe. I had a chance to go on a race track as the passenger in it, loads o' fun. Waaaay out of my price range. Back to topic -
US Airways : I agree. If US doesn't get an identity they won't make it in the long run. I don't see them going anywhere anytime soon though, at least I hope not, baring a merger.
Southwest : Southwest seems to know their business plan is poor in the long term. Oil may be overpriced now, but at some point it will go up and stay up. When that happens Southwests core customer will no longer be able to afford to fly, unless they or the airline is government subsidized.
Doug Parker : Always amusing how when it comes to employee pay US is a struggling minor player, but when it comes to Parker's compensation, look out we're a fortune 500 major airline. What is annoying is when asked about his salary he always quotes base salary. I can quote a chapter's worth on share-based compensation, since I'm getting a second degree in accounting. However, I don't remember being taught while getting my management degree that you have to treat the employee group like idiots. My school must not have been as good
We could do a lot worse though as far as CEOs go
