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Old 07-17-2009 | 06:05 AM
  #10494  
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Bucking Bar
Can't abide NAI
 
Joined: Jun 2007
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From: Douglas Aerospace post production Flight Test & Work Around Engineering bulletin dissembler
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Originally Posted by deltabound
Whether it's 5, 10, or 20 years, I think his conclusions about airlines are essentially correct (who the ultimate survivors are are debatable, but SWA is probably a decent bet). As for me, I'm not making any long term plans based on a future in the airlines (though I'll certainly savor it while I can)
Deltabound:

I respectfully disagree. SouthWest made it's market, initially, by creating demand for travel by offering fares cheap enough to make discretionary travel possible. Google the "southwest effect" for a summary. Delta's market strategy has been to create a network that customers could fly from anywhere to anywhere.

In effect, Southwest takes where you'd want to go if you could get there cheaply. Delta takes you where you NEED to go. If your business builds parts at an Asian factory, Delta can get you from Topeka to Taipei, or Minneapolis to Manilla. While there are other alternatives to driving from Dallas to Houston, there are no alternatives to flying from Atlanta to Narita. Over the past few years we have seen Southwest copy Delta more than the other way around. Southwest is now flying in and out of higher cost airports, like LGA, and has some limited international code share.

Thus in a future economy with high oil prices, I expect Delta to succeed while airlines like SWA fail. It will not be easy, it never is in this business, but overall the airlines remain a growth business as long as our planet's product increases. Airline travel has always correlated with GDP.

It is likely that there will be alternatives found for jet A, particularly at $8 a gallon. Turbine engines are not picky about what they burn and we could very well find ourselves burning some form of bio-Willy. The US military is already moving that direction. If you are Delta bound, you are headed for the right place.

Last edited by Bucking Bar; 07-17-2009 at 06:18 AM.