How to Feed a Hub
 

In the era of the p2p, the nonstop and the O&D traffic, the single fleet type was supreme. It worked and worked well. You had the luxury of offering the nonstops with high productivity with the airplanes. Wins for everyone. The company didn't need as many assets to run the operation and the high productivity made our lines of flying great because of the productivity. We have averaged more days's off then our peers. The block per duty day was the highest. The airplanes kept moving. With little connectivity, the business traveler made the network mint money(especially CA). Shell size of the aircraft began to increase. With the advent of the 800 coming to SWA the operating margins really increased because people paid for the nonstop as well lowered CASM. Then the pademic hit. Here we are. You can blame Boeing, you blame management but in the end we are here. So it's time rethink SWA. Product alone will not change a damn thing. Which leads to this.

If SWA truly is going to a hub and spoke model, then SWA will need more than just intentionally banking flights with 143/175 seat airplanes. A hub and spoke system at SWA WILL fail if that is the only assets they use. It will bleed money. Object of the game is to feed the hub with as many spokes as possible. That includes small, med and large cities. Not all cities can have 143/175 seat aiplanes. Their is a reason why the network carriers have mulitple fleet types. All those airplanes serve different cities of size profitably. The network carriers have been doing this a long time and have recently(last decade or so) have really right sized the hubs to where it's consistently showing good returns. When consolidation came around many uprofitable hubs lost their status. PIT,CVG,MEM,STL to name a few. They made the profitable hubs that much stronger. Adding more spokes(aka ATL). As of this writng, I have no idea what BJ will announce tommorrow. If their is not a plan to add some kind of feed to SWA, then this will fail big if they do a true hub and spoke. Which leads me to this.

SWAPA. We have the most scope restricted CBA in the industry. Nothing gets past SWAPA when it comes to airplanes, unless we ok it. Didn't really need to worry about it. P2p doesn't lend itself to it but hub and spoke will. IF we go to a true hub and spoke, that will have to be addressed.

EM is here because of the cash and credit that SWA holds. SWA is the only investment grade airline. If you notice EM didn't go after Hawaiian or American. They went after SWA. The balance sheet is the only thing left. It's important distinction from the rest. BJ and AW are way over their heads in this. Time to bring in someone who take this airline to the next level. Not just tweak it. Their are not many good options. We'll find out more tommorrow.

Supposedly leaked that it's 70/70 displacement in ATL with 18 going to 11 gates.

No leaks. That’s a fact. Internal memo today. That’s the only announcement today other than schedule release. Much more tomorrow.

interesting read regarding SWA and hubs:

https://www.patreon.com/posts/how-well-does-112706684

Wish I could read that first embedded article. The original piece on SWA hub and spoke but it’s for subscribers only.

I don't think they are going to go to a strictly hub and spoke at all. That would be a terrible idea. I think point to point will continue with the understanding that mega stations are going to be regional feed centers that do hub and spoke in that region. That's the way they have been operating at least since I have been here, more so now than ever. Customers fly SWA because they can go, for example, BNA to BUR or pretty much anywhere to LAS without having to make a connection. They can do it probably on multiple flights a day and if they decide to not go can get a refund. That's it. That's all we have, because our cabin product is terrible.

Clearly there are markets that have evolved like California where management is going to have to make some decisions going forward about how best to use our market power and scale there to drive more people to buy tickets since business travel has slacked off, at least for the time being. I think the future of our business is going to rely on our strong network and charging people for things that other airlines charge for like a second bag or seat assignment. That is, quite frankly, revenue that we have left on the table for far too long. People are clearly willing to pay for it if you are clear and up front about it. The legacy flex to basic economy has been a smashing success for them and, along with market forces and higher costs, has ended the ULCC market that was supposed to dominate the industry.

Here is what I know for sure, our current set of managers has done nothing to address any of these issues. I don't know if it's laziness or stupidity, and I don't really care. Someone needs to come in and fix us before it is too late. We are in late stage Roman Empire territory here where we just keep yearning for the old days that aren't ever going to come back.

Good read, well said. I'm starting to think we will never recover. I was very happy at SWA, but I'm starting to think it might be time to look elsewhere.

Could go either way, but it’s never a bad thing to have an alternate plan.

Yea I completely agree - might come out the other end in a good spot. Might come out as a shell. Just another example of how volatile this industry really is.

Today's best airline is tommorow's worst.

yup. Delta’s downfall will be epic.