Why does Southwest stay domestic?
 

It might be to late now but i thought they could expand to fly to all the vacation destinations in mexico and the carib. Any thoughts as to why they never tried?

It was hard enough to leave Texas.

Heyas,

Because their management doesn't believe their pilots capable of international flying.

<ducks>

Seriously....the real reason is that SWA is the latest member of the Legacy Club, complete with miserable labor relations. Herb is gone, and management styles rarely survive such a change.

Herb was more than management, he was OWNERSHIP, who believed in fair pay for a day's work, and knew which side of his bread was buttered, and was in it for the LONG haul, which meant making good decisions for long term survival.

OTOH, current management is like the rest of the miserable managers at other airlines...bean counters with no real stake in the airline (stock options don't count...they only serve to drive bad short term decisions). They LIKE to outsource. Makes the bottom line look great.

Welcome to the club, guys. Here's your pin, t-shirt and souvenir inflatable rat.

Nu

I thought it was because of the turn around time coming back to the states and dealing with customs. It would be hard for Southwest to turn the a/c in 30 min after coming back for Mexico or Canada. Opinions?

Well a Smart manager would say, hey lets start Southwest "international" and do flights to the carib. and mexico from a main hub and make the turn times longer if you have too. Thats really sad, if its what you guys say it is about the airline changing after herb left -its hard to want to go there anymore.

I don't think turn around is a problem, that could easily be fix. The real problem is cost. In Latin America "operational charges” are high, Goverments will squeeze anybody that comes in. TACA,LanChile, will lobby any Gov.in their favor.

It's all about cost. They're the only large airline that knows how to keep costs under control and it costs more to fly international. I'm sure they're also looking at whether it fits into their business plan of short turns. Those markets are notoriously low yield as well. I wouldn't complain about a management that has managed to keep debt to a microscopic level especially when I look around at others (mine included) that have door busting debt coming due. When the cost benefit analysis shows it makes sense I'm sure they'll do it.

Back in the "Good ol days" when SWA was just a pup, wasn't going North of the Red River consider Int'l??;)

Seriously, why try and 're-invent' something when it is doing very well. If it isn't broken (especially in the industry), don't "screw" with it.

BTW....Thanx USMC lol

Keeping It Simple S...

Because they would be getting into the legacy airline business...

Competing with people who already know how to do hub and spoke (sort of).

Attempting to merge their unique operational program with a separate system capable of dealing with all of the international problems mentioned above. Hard to a 20 minute cattle-call turn when you have to check passports and the terrorist watch list...pretty much impossible at an international outstation.

I think long-haul would be out of the question. Canada would be reasonable, latin America also possible. Actually they were in serious talks with one or more regionals about doing just that before the bottom fell out of the economy.

I admire them for being disciplined enough to stick with their proven formula.

I'm sure the Mexican and Bahamian governments are really going favor Taca and Lan. I forgot how much more they fly to the Caribbean then all the US airlines. I guess Americans spending billions of dollars in there country annually does add up to any benefit to the local economy.

Last time in Cancun I couldn't believe how many Chileans there were.

Can those "Vacation" destinations support multiple flights between city pairs, 6 to 8 a day, 365 days a year????

I would bet outsourcing your ground handling in Mexico would be cheaper then staffing there own.

The most accurate statement ever made.

There is plenty of expansion opportunities stateside well before going international: IE: Denver, Minneapolis, and yes... Denver!!

Patch

SWA has a business model that makes money when a destination meets the model SWA goes there. Their management is, or has been , smart enough to stick to the profitable model. They turned a profit this past quarter.

I'm all for more Denver!!!!

I think the opportunity costs are too high for SWA at least for now.

SWA isn't quite at Wal-Mart's level yet.

;)

The world is flat beyond CONUS and they do not want to fall off..... ;)

Walmart customers does not travel international, they don't even know there is such a thing...:D

What do you mean Wal Marts customers arent international? Everytime I dare go to mine there is more spanish than english spoken!!!!!

Why fix somthing that isn't broke.

Like every airline, SWA is maturing. With that comes higher costs. SWA's pilot costs alone are higher than anyone else out there. Yes, their efficiency is awesome, but 95% of airlines have copied it.
SWA is going to have to find a way to spread these costs out. The best way to do this is to go international, and go after the Legacy carriers. They do this and three if not four of us our out of business. We ran for the woods when they did it domestically after 9-11. If they start in LA etc and then move to Europe, the Legacy carrier could not compete with them.
Problem is that WN has such an awesome balance sheet that they would just start to feel a little financial pressure when the rest of us would be on the floor. They have the money to kill any other carrier they want to. It will effect their bottom line to do this, but they can if they so choose.
I see them growing in the leisure markets South of the USA in the next three to five years.

[quote=stbloc;649232]I'm sure the Mexican and Bahamian governments are really going favor Taca and Lan. I forgot how much more they fly to the Caribbean then all the US airlines. I guess Americans spending billions of dollars in there country annually does add up to any benefit to the local economy.

Last time in Cancun I couldn't believe how many Chileans there were.

That's how far south of the border US airlines operate? Do you know the names off all the countries in Latin America? Volaris is owned by Carlos Slim 3rd. richest person in the world, recently entered into code share with SWA and it owns 25% of TACA. LAN Chile is whole different animal, but I guess you knew that.

Cost is the real issue! North America is a continent; the countries south of the border are made off very small "tiny" countries. The flexibility that is provided in the US market makes the environment feasible for companies to operate. Here it is different, you will never know how deep the rabbit hole goes, political instability etc....

Just to give you an example how things work in "Latin America" It has taken the Costa Rican Gov 10 years to construct, develop and put in place a decent airport operation, 10 years! And still the novel hasn’t finished. And Costa Rica is the most progressive, stable, and secure; developed country in Central America, not Latin America.

TACA pay scales are below a regional in the US. Ten year Cap’s in TACA make around $5200 with benefits and per diem, and Embraer Cap's around $3200 MONTHLY. FA's $500 and Senior ones $1000. Ground staff depends on the minimum wage in their respective countries.

TACA is very close to any and all politicians in the region, and provides their very own "buddy passes". After the accident of TACA in Toncontin last year, the airport was closed by Zelaya, the president of Honduras. As he declared it unsafe to operate commercially, three months later it was reopened by lobbyists of TACA. Against Airbus, and its own pilots recommendations.

In Latin America we don’t have a body that regulates unfair competition, like in the US and Europe. Those bodies are in this case TACA and LAN Chile, Avianca etc, that write their own aviation law in their respective countries. In addition, low cost carriers have to operate to/from the same airports as legacy fly ins. Almost all major cities in Latin America have one airport, one less advantage for the low cost.
Anyhow I think it will be interesting to see how the low cost in Latin America will manage to take away the monopoly of the skies of these companies. You speak about “Billions of dollars” that Americans poured into Latin America, do you think they only fly with US carriers? How about corporate companies, private ones? Most economies south of the border depend on remittance s from Latin’s living in the US. So a large % of those billions are of illegal aliens in the US flying not only US airlines but their own country brand.

They walked across or came swimming here..... Did not use SWA.... :D

When you make 50 million dollars in a quarter and have been profitable since the 1970's you dont have to answer who, what or why to anyone. The question should be why does everyone else fly international and lose money?

[quote=jet320;649498]
The post was why doesn't SWA fly to Mexico or Caribbean destinations. Were not talking talking LAN countries. I would bet the farm that the amount of people who fly LAN ot Taca to get to Mexico or the Caribbean are in the single digits if nor less then 1%.

I counted 68 flights from the USA to Cancun on Flight Aware. How many does TACA or Lan fly there in a day?