SmoothOnTop

"First two checked bags are free."

This year, I'm sending all of my holiday parcels in pairs on WN.

Bond

You gotta love Southwest. They really get it! They understand that is not all about bending the passenger over. A while back they added a small fare increase (fuel surcharge I suppose) on a number of routes, most folks didn't even notice! It has kept them from having to do stupid things like charging $15 for checked luggage.

It's all in the presentation and marketing, and the WN folks are light years ahead of the Legacy carriers. Even when the hedges start to run out, those guys will still make money....you watch!

AirWillie

If people didn't expect to fly for peanuts maybe the others wouldn't have to resort to charging for baggage and every other thing en board besides the oxygen.

boilerpilot

Except that WN can pay their employees (ALL of them) more, have them be happier, and make money on what they charge. But you're right. It's not the ineptness of most of the legacy management, it's WN's fault.

JetA has gone down in price and yet UAL now feels it necessary to charge even more for the second bag? There isn't any way that that can be spun positively; any way you look at it it's incompetence.

Also keep in mind that WN serves only domestic flights. If the Legacies had no choice in the matter of how much to charge domestically because they fear an explosion of growth at WN (wait a sec...), then they could simply balance out their checkbook by charging more on international flights. Oh wait, then they'd have to compete with the foreign carriers. But I'm sure they're losing money just like the American carriers, so I'm sure they'd be willing to raise their prices too. How much is LH projecting to make this year? Sorry guys, any way you spin ANYthing to do with most of the legacy carriers, it boils down to an inability to manage competently.

Free Bird

In the next couple of years SWA cost for dead dinos will be more closely aligned to what others are paying. Any bets on what happens then? SWA will raise their fares significantly and they will ask for pay cuts from employees.

SWA mngt. did a brilliant move with the hedges. Take those away and they will not be any different than many of the legacies. They too would be losing $$$ right now if it wasn't for the hedges. Time will tell.

tsquare

Wow..... I wish we had such geniuses running my company... It's all so very simple.

SaltyDog

As a cargo dog that follows the business management of airlines closely, your argument is patently thin. You would make Gordon Bethune happy though <g>. He is a smart guy who did alot of brilliant things at CO, however, he simply hates SWA. SWA management strength is a stable team that is truly invested in the company. The challenge many of the legacies face is management teams that are invested in milking the corporation for their gain only. Golden parachutes, etc. are the priority. We employees pay dearly for this mismanagement.
1. SWA is able to pay well because the management team largely invested wisely the profits of the company. Fuel hedging is not uncommon in the airlines, but it does take capital. SWA management wisely uses this capital to lower their direct operating cost (DOC) via fuel hedging. It makes sense to lower DOC and sure beats the alternative of asking employees to pay for managements inability to lower DOC's any other way. AS another post demonstrates, sometimes you lose money, but overall, they win the hedge.
2. SWA business model is smart, one aspect, single aircraft type and get Boeing to modify this common type to match the market needs they desired. All airlines used to do this, SWA nearly perfected this normal business move to their profitable bottom line.
Could go on and on and have a PHd thesis <g>, but fuel hedging is only a little part in the reason they are profitable consistently over the long term. Take hedging away, they will still be a dominate player in the airline business.

LeftWing

You're blaming the passengers? It's not their fault, it is the fault of airline management trying to unrealistically undercut each other. If Toshiba wanted to sell high definition large screen TV's for a hundred bucks, I would definitely buy a couple and any business woes would be their fault, not mine. If you were airfare shopping, you would buy the lowest priced ticket too.....so would anyone.

C17MooseDriver

Those "people" pay the bills. They know what they're getting when they fly with us, no first class, no meals, but good service at a good price. (plus all you can eat peanuts).

Well put Leftwing.

Pilotpip

Southwest does a lot of things. The hedges help. Treating their people like, well, people helps.

One thing that everybody always forgets about is the hub and spoke. They don't do it. They roll everything. Don't need nearly as many gates to do the same number of flights out of a given city. As a result, they don't need the staff, they don't need the GSE. They also don't have those employees sitting for 90 minutes between pushes.

As long as they have cash, they'll have hedges. The cash allows them to purchase fuel at a volume discount.

Even if they cost a little more, I think people will still choose WN over legacies when given the chance. Happy employees make happy customers. Not to mention that without the fees people don't feel nickle and dimed. Skybus was cheap, but by the time they hit you with all the fees for bags, food and drink you were probably paying the same as anywhere else. Look how well that went.