Originally Posted by
Bluedriver
It's a fair question and concern. It's what JB set out to do and what they are. It's like asking Apple to drop the high tech stuff and just make cheap calculators.
They still have economic forecasts for very high margins after the fleet changes and after they have weathered the Delta storm. There is only so much more Delta can do in BOS/NYC and they almost don't have a play in Florida. Delta tried to stop JB's transcon Mint by putting wide-bodies and an improved lie-flat product on transcons, JB still does really well. The same may well be true in Europe.
The big 4 still make up for 80%+ of domestic travel, and nearly all of the high fare premium travel... So there is a tremendous opportunity for a better product at a lower price. That's JB. And the middle and upper middle class travel more often.
On the other end of the spectrum, and this is just my opinion, and I'm sorry to repeat, I don't mean any offence, but I believe the actual market size for ULCC travel is much smaller than you were led to believe. Especially if you desire to have daily service or multiple flights per day. The overwhelming majority of markets that support dialy ULCC service are to MCO (Disney), LAS, and cheap Florida vacations. It's why there is so much overlap on those 3 markets between F9 and NK. And the Johnny cheap vacation guy doesn't travel near as often. And... An airline typically only has the lowest costs for a certain number of years. As they grow from small to medium to large, their average employee longevity increases, raising costs over time. Remember when SWA had cheap fares? They aren't cheap anymore! They got bigger and older. They still don't offer frills to speak of. Just a cheap product for a much higher fare than they used to. Today it's NK and F9. But another 10 years, and you will be getting your butts kicked by Sun Country, or New Air, or ULCC 2.0, or ULCC 3.0. Having your only competitive advantage be cheap, is not sustainable. Having a high quality product at a reasonable price most likely is sustainable.
These are my ramblings, they are worth what you paid for them.
Rambling or not they make sense. I still wonder why SWA passengers put such high praise on that company. Don’t get me wrong, some of the nicer employees for sure but the product is worse than NK’s in my opinion. At least we have the Airbus. Some of those older 737’s are garbage to ride in.