Heyas J,
Obviously there IS a market for point to point service. That's how SWA built up their whole airline....flights between large cities with long drive times...AKA TX and CA.
There were also opportunities to poach service from a legacy hub, and that's how SWA laid waste to USAir's entire BWI hub (I flew out of there in 1993-94...it was a very going concern).
But SWA's operation has morphed closer into to a hub based system with very high labor costs, albiet offset by the efficiency of their operation. Problem is, the low hanging fruit has pretty much vanished, and where they do go into, they're seeing competition that has frustrated their goals (Frontier in DEN, AirTran in MKE). Now they're forced to enter into markets they said they'd never enter...first PHL, then DEN and now the crying over LGA and DCA. Why? Because that's where the money is.
What you have now is an airline that is finely tuned to skim the cream off of nearly every market. Who wants to go to East Butthole, Minnesota when you can pick the 7-8 highest yielding/load factor city pair out of any population center? This is EXACTLY how AirTran got started in ATL, and to some extent, how JetBlue got started out of JFK (although to be fair, that was more like seeing the keys to a Kenworth Truck sitting on a table with a note saying "here, take it, it's free and we'll even give you free parking")
So, whats to prevent DAL from reverse engineering the process and targeting specific, high yielding city pairs? Well, a couple of reasons. First, NWA tried it out of MKE and IND, and had mixed success at it. Some flights worked, others didn't.
Second, it takes them outside their "core compentencies", something RA has traditionally gotten away from. We had an NBA contract with 5 727s that were a license to print money....all you had to do is turn the crank and out came the cash, but the whole operation was shuttered.
Same with cargo. Although HIGHLY profitable at one point, and WAS considered a "core compentency", it was allowed to degrade to the point where it was no longer cost effective to spin into something that was competitive with the "new market". Had it been treated with a minimal amout of TLC, we'd be flying -400 freighters now.
But is SWA vunerable in a place like STL? I think yes. We've fought a good holding action in MSP, DTW (for a long time), and SLC. AirTran is in sort of rewind from ATL and is looking for easier pickings (IE MKE). But it's important to understand that AirTran is NOT SWA...different kind of operation altogether.
If we have the spare airplanes, I think we COULD go after some of the "heavy cream" markets that the LCCs use to subsidize their operation...but you have to be smart about it, and not just show up one day at KDAL with 40 airplanes ready to lay waste to Texas (although I would personally love that...especially with DC-9s
).
Our yields are certainly subject to erosions by LCCs...but we're all more or less on the same playing field now, and 5-10 airplanes in a LCC's core market could really throw a monkey wrench into THEIR plans for a change.
Nu