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Old 08-03-2009, 08:09 AM
  #257  
Immel
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Joined APC: Aug 2009
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Are there any other reasons?
FAULTPUSH - yes there are several other reasons and I want to hit on something you mentioned earlier about LFs and how much higher F9s are currently than SWs.

SWA operates a totally different model than most airlines. Frontier along with many other airlines operate a hub and spoke. To go ATL to LAX on Frontier you have to go through DEN and connect to an LAX flight (unless that airplane is a through flight). So, hub and spoke carriers traditionally have higher load factors. F9 has high load factors because everyone that flies on F9 out of ATL has to go to DEN to get where they are going. Thus, many of those pax are through pax simply going somewhere else unless their final destination is DEN.
SWA is a point to point carrier. When you fly SWA to RDU, the majority of those pax start in DEN and get off in RDU. There are a much lower ratio of transfer passengers on SWA planes, because we don't traditionally connect passengers in DEN like F9 does. I think this is why the ramp up in DEN has been seen as "trying to take F9 or UAL out." Actually, it might seem like that, but that is just a misunderstanding of our business model. We make money on frequency not necessarily filling every seat with a butt. So, you will always see SWA with lower LFs out of cities, but we break even with 70% LFs whereas many other carriers need a higher LF to make money.
Consequently, F9 is totally dependent on DEN. SWA has many cities, more flights with a bigger "route" network. So, we can, in essence, fall behind of F9 profits in DEN, but still make it up in many other markets. F9 lives or dies in DEN and I believe that is why they are in the position they are in. They have tried focus cities like MEM and LAX, and it has not gone well for them. SO, the point is LF comparison is not valid in determining who is winning the profit war in any given market. It's apples and oranges.

Secondly, while attempting to acquire F9 would help eliminate some competition in DEN, SWA is also pursuing this because it would give us more market share, it would help us grow with out having to infuse too much capital (of course this remains to be seen), and it would give us an in-house near international operation that we can study without having to farm out to WestJet or Volaris. So, the main issue here is jump starting growth with a removal of competition as a secondary effect.

Pilot'sWife, I cannot imagine how stressful this situation is for you and your family, and I pray that this works out for you. Try to separate emotion from fact though. Nobody is evil in this situation. I just try to put food on the table for my wife and three kids just like every F9 pilot and every Republic pilot. SWA or RAH are not the enemy here, F9 is in bankruptcy and this is part of the process. F9 is NOT "handing DEN to SWA," someone is going to get F9 - it is part of the process. Hatred towards any one company because of what you perceive or have been told is just that - emotion and not fact.
The reality is here that SWA would like to have F9, but it doesn't need F9 to continue making money. I think the F9 pilots need to ask themselves if they go with Republic can they say the same? A valid question, a tough question, but a choice to be made nonetheless.
I hope that doesn't sound cold, but it is reality. SWA will keep on trucking whether this deal falls through or not. It would be nice to gain F9, but not the end all. Unfortunately, that is the leverage the SWA and it's pilots have in this situation.
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