News and notes from around the interweb:
- I’ve written many times that the biggest problem for Southwest Airlines is that they maxed out their model (domestic and short-haul, one aircraft type, selling direct, homogenized product, no partnerships). They had picked all the low hanging fruit. So their future was always going to be slower growth, higher cost. Management didn’t pivot quickly enough, but the immutable fact of their existence wasn’t going to change. Some interesting data:
In 2000, WN served 58 airports directly. 48.2% of the domestic population resided at the 58 but 85.3% resided within 120 miles of the 58. The 107 airports served today are home to 86.6% of the population and the population within 120 miles is roughly the same. REMEMBER THE “SOUTHWEST EFFECT”. The “stimulation of demand” or using low fares to redirect existing demand from one airport to a WN airport.
Between 2009-2019, the avg. labor dollar cost per seat would increase 104.5% and the passenger revenue per seat would increase by 46.5%. Nearly 72% of the airport pairs flown by Southwest begin or end with the same 58 airports WN served in 2000, yet the network has 500+ more aircraft operating.
- Hyatt’s Alila Marea Beach Resort in Encinitas became ‘adults only’ on February 14th. I’ve enjoyed it a couple of times with my young daughter (2024 review, 2021 review), but we won’t be allowed back. I guess it’s back to The Seabird?
- Ed Bastian is savvy enough not to call out Donald Trump on national television, so I’m not sure he’d give a different answer either way, but what he says here is actually true…
Gayle King from CBS attempts to pin the blame for plane crashes on Trump, but Delta's CEO refutes her claim. pic.twitter.com/W2DGosBomQ
— Catch Up (@CatchUpFeed) February 19, 2025
- When an airline doesn’t deliver the product they promise, they shouldn’t be entitled to the customer’s fare. A business class seat with inoperative entertainment system? They did transport the passenger, but that’s not the only thing they’re selling. The marketing promise drives their desired fare premium, but they fall back on a contract of carriage that says ‘our fingers were crossed, you didn’t think we were actually promising you the thing we advertised did you?’
Paid for an @AmericanAir business class seat on a 9 hr flight. This is what I’m met with. What a joke of an airline. I want a refund. pic.twitter.com/WilCJxaQWM
— Moi Mendal (@moimendal) February 20, 2025
- Is there anything less likely to end well in all of travel than booking a Hertz rental car through a travel portal? When a couple booked Hertz via Delta, they didn’t prepay the under-25 driver fee, and Hertz wouldn’t apply any of what they paid to their rental. They had to create a new reservation and pay for that in full.
- Uber, Lyft Risk Losing Customers as Fares Jump 7.2%
- 5 Bangkok airport lounges leave Priority Pass after March
What has smacked Southwest in the face is the ULCC business model albeit it’s doubtful if the ULCC business model is sustainable long term. Southwest thought “free bags” would be their savior but that hasn’t been the case. At the same time they don’t have lucrative premium long haul and have missed out on the leisure flyer that will pay money to get out of coach.
One a/c model becomes restrictive. Southwest has lost out on the economics that the 321neo can bring and or the other end what the E175 can bring on thinner routes. A single class configuration means the airline looses out on being able to collect additional revenue.
While legacies still offer bare bones shove you into a middle seat in the very back of the plane for a cheap fare increasingly they are attempting to cater towards a more upscale clientele that is more than willing to pay not to be shoved into seat 32B or not sit in a loud and crowded gate area.
The only merger partners that I see not dragging WN stock lower is AS or breeze. (Not pumping that stock). But a B6 merger would be a mess. As B6 is a mess.
The “free bags” value proposition – basically the main Southwest selling point for the last 15+ years – also lost luster when legacy airlines now give a 1 free bag subscription for $100/yr (via credit card), which may also come with a few other perks like a couple annual club passes and global entry fees. And for the same ticket price or less, that legacy airline lets you make a seat assignment, probably has a better network / frequency, and has premium options like economy plus.
The first ‘adults only’ airline is long, long overdue.
Also consider that Southwest no longer offers competitive fares except for last minute fill seats at any price offers or companion scams. Airfares to Cabo have doubled this winter and are twice as much as AA and AS award travel.
Sorry to see them lose that market but with Elliott demanding profit on every flight it means they will probably pull out of the Cabo market soon.
Bastian failed to mention that any crashes resulting from FAA and flight safety staffing reductions, will be premium
in other news, Delta has hired Pete Buttigieg as a consultant for “vertical neutral” passengers and the airline now offers exclusive routes for those travel who prefer to fly upside down
Southwest is still profitable and have a strong ballance sheet. They have an opportunity to take some risk rather than just offering a few rows of 2×2 F seats.
I’ll say it yet again: Growth for the sake of growth is literally the definition of cancer. Airlines (hotels, and other businesses) prioritize their shareholder and owner’s profits over all else. Screw the passengers, guests, and workers, apparently. Yet, I thought I learned that the US is primarily a service and consumer-based economy these days. So, this all does seem incompatible. Like, at some point, a critical mass of people will be laid off, have no purchase power, and stop participating in the modern economy. For instance, if health insurance doesn’t cover anything anyway (automatic claim denials), why keep paying them thousands of dollars in premiums every month. Ultimately, I think we’re due for a major correction. Hopefully better times follow.
WN has a terrible business model and that has been the case for years, long before the vultures known as the Hedge Fund swooped in and tried to right the ship, not out of benevolence, but to line their greedy pockets even more, which is after all, the American spirit when all is said and done. The only thing that talks in this country is money.
Southwest is headed for a breakup and it will be Delta and United that will share the spoils, and not JetBlue, which itself will land in Chapter 7 once all the low middle class American flyers stop taking their bucket and spade trips. Spirit and Frontier will merge. JetBlue’s assets will fold into American Airlines. Only a matter of time.
> When an airline doesn’t deliver the product they promise, they shouldn’t be entitled to the customer’s fare.
This type of regulation is EXACTLY what has kept American businesses from growing, and thankfully the DOT is being prevented from issuing these.
This is what voters have voted for, presumably with the full knowledge of the consequences. You’re on the wrong side of history, consumers (taxpayers) are little people, only corporations matter now!
Someone who has not read about how Hertz does business or has chosen to ignore the reports. Maybe this was an attempted hack of some sort.
Depends on your use case – For years my job often required fairly short-haul flights (2.5 hours or less) to customer sites, usually at pretty short notice. For that, Southwest worked quite well.
These days, said customers are also working from home and don’t want to come into the office to meet with their tech rep. Not to mention that their data centers have largely moved to AWS, Azure and other cloud providers, so need to be on site anyway. So how about we just make that technical engagement a Zoom call?
@LadyOlives — I’m with you but only in-part.
Yes, we (in the US) have allowed our collective greed (and ignorance) to misguide us, but ‘power’ is the goal for some, not necessarily just money.
Southwest actually had a decent business for decades, an efficient fleet of similar aircraft, strategic futures contracts on fuel which saved them tons, more point-to-point as opposed to hub-focused which provided unique destinations and a competitive advantage compared to legacy carriers, and unique amenities (all economy, no assigned seating, free checked bags), which catered to frugal yet middle-of-the-road personal and business travelers alike. Personally, I liked Southwest, if you set the right expectations.
The pandemic really strained them. Inflation is killing everyone. Sure, hedge funds will do what they do, and I hate them, too. I’m not exactly sure how things will end up, but bankruptcy for many companies is probably correct, maybe not exactly how you predicted. What it means for us as consumers is less protection, less competition, usually worse off. Yay.
Southwest is the airline for fat people, those with too much stuff, and the lame seeking an in-flight miracle cure.
As someone who occasionally has to buy same-day tickets on Southwest, it’s fun getting to board in the C group when you paid more than anyone else on the flight.