Southwest Hypes Bag Fee Success, Downplays Basic Economy Woes

What’s the point of flying this airline now over somebody like Delta?

For me personally at PIT, they still have one of the more favorable non stop options, aside from that, not much

For myself Southwest flys direct to Vegas. I don't fly them because I like their staff, their planes or even the company. I only fly them as other carriers have 1-2 stop and Southwest does not. Found out the other day JSX also flies direct from my home location and most likely going to try them next. Roughly the same price and much better product.

Southwest should be careful how they proceed though there flyer program has been currently is and probably will remain a joke. Loyalty to a airline comes from that and nothing else. Anyone can literally dump there trash program and move on to another airline and be better off for it.

For the vast vast majority of people ( not avgeekd, those who consider air travel as a form of public transport) it comes down to price and convenience. If the price on Southwest is better than on Delta, many will choose Southwest. If I am trying to to get somewhere on a Sunday afternoon and Southwest offers a direct flight around that time, while Delta makes me connect in Atlanta…. Again - I’d pick Southwest

their passenger financial numbers are pretty much in line with DL and UA's domestic coach numbers. There is simply too much domestic capacity for the level of costs in the industry which are largely driven by labor.

None of the carriers that have reported so far (which now includes AA) has reported positive domestic RASM.
AA's int'l network did better than its domestic network - in line with DL and UA.

There is war of attrition going on in the industry and DL is adding slightly more domestic capacity on an absolute basis with UA adding a higher percentage but on a smaller base.

DL also overtook AA as the 2nd largest US carrier in ASMs and RPMs as well as in the domestic market by revenue.

Most of the US airline industry is not sustainably profitable.

and WN's only future in this war of attrition is to charge customers for things it gave away for free and it is succeeding at doing so.
WN's yield increase is leading the industry which means it is "firing" alot of customers that were coming only for the lack of bag fees and replacing them w/ higher value customers, even while shrinking the airline.
It is getting better efficiency out of its network because of redeyes.

There is a far higher likelihood that WN can turn the corner than AA can. AA expects to lose money in the 3rd quarter and the year. WN is expecting a small yearly profit.

The real discussion should be about the future of AA and its network and its passengers.

You guys might not like Tim Dunn but he's 100% correct there are way too many coach seats chasing a limited number of passengers, the lower income spectrum being clobbered by high cost of living, credit card debt, car loan debt, rising rents, buy now pay later schemes, and student loan debt. College degrees that are not turning into vehicles for a good salary.

For how DL and UA have been able to offset money losing coach fares but for how long? UA FAs demanding a sizable raise. DL trying to keep flight attendants from unionizing.

But on this travel blog and most others there seems to be this belief that an airline should have Frontier fares, PanAm Services and with enough filled 321neos the profits will flow. In other words, people will say that I and Tim Dunn are full of it.

I think you and Tim are broadly correct about Y seats not being profitable, especially domestically. UA and DL can get away with it to some extent because they do have business/premium leisure travel from most of their hubs that can reasonably be expected to sustain it going forward (based on those hubs' history) and thus continue to subsidize the losses. Plus the ties to Chase and Amex's credit card ecosystems, respectively.

AA should have been able to do the same thing as UA and DL have, but of course we know how badly they have been run for the last decade.

WN can potentially turn things around because they do have both a better cost structure than AA, and also business traffic and overall hubs that they can own unlike the ULCCs. They don't depend on price-sensitive travelers. For better or worse, WN is now going all-in on customers/markets that they think can generate revenue for them, and not bothering with anything else that is simply not profitable enough (if at all).

Seems to me American Airlines Group and Southwest Airlines may be heading for a merger.

At least there will be a Heritage Jet Collection of liveries. COSTS

I agree that this could be very bad news for AA if it works given that AA and WN compete domestically/regionally in multiple markets (not least Dallas and Chicago). AA has worse financials in peak summer season (as well as annually) and that's even before WN implemented its changes.

What hype? - I live 5 minutes from Love Field - I avoid SW and Fly Delta out of LUV now or even AA from DFW -- When you add in these SW baggage fees -- the SW fares are EQUAL to or MORE than fares to the same cities using DL or AA -- Why would I fly SW anymore ? The FA's seem beat up and have no more spunk - Herb died twice after this "take over" -- Sad -- Enjoy your new money while you bleed loyal customers..

It just so happens that Southwest operates nonstop flights to most of the places I visit frequently, and because I don't mind open seating and liked the baggage policy, I'd often book Southwest without even checking other carriers. Now I check, as there's zero reason to pick Southwest over any other carrier. It would seem to be that that level of loyalty would be worth holding onto.

both not being financially viable is not a reason to merge esp. given their overlap esp. in Texas and the southwest US.

So, struggling WN will execute a "$2.0 billion share repurchase program". That's not going to help the business. I wonder who benefits...? Huumm. Certainly not top executives, right?

For business travelers doing short hops Southwest was perfect because of many frequencies. If you're flying early in the morning from Dallas to Houston or Dallas to New Orleans for a meeting and coming home that night you just want to get there and get back. Yes upgrades are nice but one can live without an upgrade for a sub 500 mile flight-particularly as free upgrades becoming harder.

Southwest did have a loyal base of business flyers that flew short haul (like regional manager types) not obsessed with lounges and upgrades. Now maybe they want an aisle or a window and when suddenly 100 people start to game the system with "fake disabilities" well let's just say then the equation changes.

WN doesn't have the cost structure anymore to support those short hops - which is part of why their business has shifted to longer haul flying. Their average passenger trip is now over 1000 miles which is why their product has to more closely align with the big 3.

and redeye flying is apparently doing well and is part of their higher aircraft efficiency. and redeye flights by nature are longer haul - typically over 1500 miles.

I love that they changed the fare ordering on their booking pages, used to be Biz Select far left and Wanna Get Away on the right, now Basic is on the left. I wonder if they think that's going to make a difference in Basic bookings.

I just flew WN to Hawaii and back, the flights were over full (they've trimmed capacity), all but one return flight are now Redeye, and the flight crew were much more bothered by things. For now I'll keep flying them, Companion Pass will keep me around, but if they mess with that I'll move on to a better flight experience.

It is probably too early to tell about the impact of the changes. After the changes need to wait some time to see how people react. With DL and others now having basic economy then this will really affect SW.

SWA's biggest problem is deciding whether it is a point to point or hub & spoke carrier. If you look at this the issue is clear.

Lots of other issues.

https://visualapproach.io/painful-end-to-a-53-year-streak/

When I was pricing Delta and Southwest fares for my flights next year Delta was beating out Southwest prices and had better flight times than Southwest. I used to choose Southwest all the time because of free baggage and open seating. Now they offer no advantages.

Since the start of bag fees, I believe the passengers should at least be served something other than pretzels and cookies for a snack.