Southwest Airlines annual report

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September 26th, 2016 at 12:17:01 AM permalink
Pacomartin
Member since: Oct 24, 2012
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But besides Allegiant there are very airlines competing in the smaller airports. For the most part it isn't profitable.

Perhaps if we let the Mexican airlines compete on domestic flights in the smaller Texas airports they may improve service and still manage to make a profit.

DAL, HOU, AUS, SAT are the medium size Texas Airports

San Antonio San Antonio International (Medium size)
El Paso El Paso International
Midland Midland International
Lubbock Lubbock Preston Smith International
McAllen McAllen Miller International
Corpus Christi Corpus Christi International
Harlingen Valley International
Brownsville Brownsville/South Padre Island International
Laredo Laredo International
September 26th, 2016 at 9:14:17 AM permalink
Nareed
Member since: Oct 24, 2012
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I ran across a chart comparing the costs of flying in various countries. Unfortunately it was while using my tablet, and I can't send the link to my work PC easily. But average costs are lower in the US than Mexico. I'll try to post it or link to it in the evening.
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September 26th, 2016 at 12:09:40 PM permalink
DRich
Member since: Oct 24, 2012
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Quote: Pacomartin
But besides Allegiant there are very airlines competing in the smaller airports. For the most part it isn't profitable.



It seems to me that Allegiant has done a remarkable job creating their own markets. To go from a small bankrupt company in 2002 to what they are today seems like it should be a business case study. I still think of them as the little Vegas airline but it seems that they now have more flights operating out of Florida than Las Vegas.
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September 26th, 2016 at 12:43:01 PM permalink
Nareed
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Quote: Pacomartin
I'll bet you Republicans are the greatest overall beneficiary of Mexican labor.


Without question. Aside from the benefit of their productivity, they reap political benefits in many different elections.

Quote:
But it also means that Southwest will never grow much beyond flying to 33 out of 72 small airports. So service to those millions of customers will largely consist of a handful of regional jets flying to a hub (at great expense) where they can look forward to connections.


According to Cranky flier, they should start charging for bags the minute fuel prices go up.

He hasn't said so, but he's been wondering why Southwest eschews the easy revenue from bags, and he thinks the deal with the pilots will cost them a lot. So it makes sense that instead of increasing fares, Southwest will have to charge for the second checked bag at first, and then for the first.
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September 26th, 2016 at 1:11:50 PM permalink
Pacomartin
Member since: Oct 24, 2012
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Quote: Nareed
He hasn't said so, but he's been wondering why Southwest eschews the easy revenue from bags, and he thinks the deal with the pilots will cost them a lot. So it makes sense that instead of increasing fares, Southwest will have to charge for the second checked bag at first, and then for the first.


Maybe they are hoarding the revenue from the fuel savings in anticipation of higher pilot costs.
September 26th, 2016 at 8:15:32 PM permalink
Nareed
Member since: Oct 24, 2012
Threads: 346
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Quote: Nareed
I ran across a chart comparing the costs of flying in various countries. Unfortunately it was while using my tablet, and I can't send the link to my work PC easily. But average costs are lower in the US than Mexico. I'll try to post it or link to it in the evening.


Here's the link: https://kiwi.com/stories/aviation-price-index/usd/
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September 26th, 2016 at 11:07:44 PM permalink
Pacomartin
Member since: Oct 24, 2012
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Quote: Nareed
Here's the link:


If I could translate the numbers into $/100km to cents per mile which is more familiar to US reporting.
($6.21 per 100km = 10 cents per mile)

There are four values:
Low Cost/Full-service Domestic Flights: Low Cost/Full-service International Flights


Mexico 14.3 29.9: 10.9 14.0
USA 5.7 7.8: 20.7 29.0
UAE 291.9 354.6: 15.8 18.2


I am having trouble with those numbers for the USA. Southwest reports Passenger revenue yield per RPM of 15.57 (cents) so I fail to see how they can calculate 5.7 to 7.8 cents per mile for domestic USA flights.

Volaris report revenue of 1152 pesos plane fare for an average of 965 mile trip. Since Volaris makes considerably money from other sources if I include them it goes up to 1431 pesos. Using 20 pesos per dollar, that works out to either 6 cents per mile or 7.4 cents per mile which also doesn't agree very well with the data from that article.

In the USA 88% of passengers take off from the 30 large and 30 medium size airports. The remaining 12% of passengers take off from the other 485 airports. I think the flights from large hubs are very efficient

But using the same definitions Mexico has two large (MEX and CUN) and three medium airports (GDL MTY and TIJ). US regional jets do not fly point to point, they almost all feed hubs.

It isn't immediately clear if Mexican airlines could fly point to point flights from small airports any more efficiently than US airlines. But they may welcome the chance to try. It's a somewhat academic point, as I don't see the US liberalizing it's policy anytime soon.
September 27th, 2016 at 6:54:35 AM permalink
Nareed
Member since: Oct 24, 2012
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Quote: Pacomartin
I am having trouble with those numbers for the USA. Southwest reports Passenger revenue yield per RPM of 15.57 (cents) so I fail to see how they can calculate 5.7 to 7.8 cents per mile for domestic USA flights.


I don't get complex finances at all, nor simple ones for that matter.

Quote:
But using the same definitions Mexico has two large (MEX and CUN) and three medium airports (GDL MTY and TIJ). US regional jets do not fly point to point, they almost all feed hubs.


In the old days most people wanting to fly from a to B where neither is MEX, usually wound up connecting at MEX, except for a few flights from MTY and GDL. Now there are far more options, but not nearly as many as you get in America.

Quote:
It's a somewhat academic point, as I don't see the US liberalizing it's policy anytime soon.


Who knows? No one seems to be making much of a fuss about Wal-Mart exporting so many jobs and stores to Mexico...

Still, what you might get if you got your wish, would be, say, Volaris or Interjet crews on their own planes painted with AA, DL or TED liveries doing contract work for the big airlines. I don't see Southwest, Alaska or Jet Blue hiring out regional flights any time soon.

Speaking of Jet Blue, there's much buzz about routes to Europe departing from Boston. Did you know (and you probably did) that Boston to Dublin is only a little longer than Boston to San Francisco?
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September 27th, 2016 at 8:12:06 AM permalink
Pacomartin
Member since: Oct 24, 2012
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Quote: Nareed
Speaking of Jet Blue, there's much buzz about routes to Europe departing from Boston. Did you know (and you probably did) that Boston to Dublin is only a little longer than Boston to San Francisco?


In February 2012, Aer Lingus' CEO said that they were going to go ahead with an order of 9 widebody A350's to replace their present fleet of A330's, but they may order another 5 narrowbodies to give them additional frequencies to the Northeast. So far they haven't ordered them.

Jetblue has not made any firm announcements about TATL flights with narrowbodies, but it is inevitable that someone flies that route with a narrowbody

The Boeing 737-Max 8/9 has an advertised range of 4045 miles. The Boeing 737-Max 7 (smaller one) has an advertised range of 4431 miles, but as we discussed they may never build it if Bombardier keeps racking up orders.

The neoA321 Long Range version advertises 4600 mile range. There probably won't be a Long range 737 with larger capacity simply because they can't move the wing.

The Bombardier C300 advertises 3800 miles which would allow Boston to Dublin

Boston to
SFO 2,704 mi San Francisco
DUB 2,993 mi Dublin
LIS 3,192 mi Lisbon
MAD 3,410 mi Madrid
OSL 3,504 mi Oslo, Norway
DUS 3,562 mi Dusseldorf
BCN 3,650 mi Barcelona

I mentioned the 30 FAA "large" airports which are, by definition, airports which board 1% or more of the USA air traffic. Currently that is roughly 16 million annual air passengers. The 31 European airports of equivalent size are pictured on the map.



PMI Spain, AYT Turkey, and ATH Greece are common vacation and tourist destinations. I don't think most Western Europeans go to the secondary airport in Moscow or the secondary airport in Istanbul. Stansted London (STN) might be a common destination to transatlantic narrowbodies as they have more room than Heathrow and Gatwick and they have a train that goes right to the heart of the business district in London. Brussels and Dusseldorf are not as common TATL destinations, but they may be reached by narrowbodies.

The 30 "large" FAA airports (less Honolulu)
September 27th, 2016 at 8:50:59 AM permalink
Nareed
Member since: Oct 24, 2012
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Quote: Pacomartin
Jetblue has not made any firm announcements about TATL flights with narrowbodies, but it is inevitable that someone flies that route with a narrowbody


I'm pretty sure WOW flies an A320 from Iceland to Baltimore.

Now, Jet Blue could easily buy some A330s, ceo or neo, or even A350s XWB, but that tears apart the fleet commonality mantra, and we know how they feel about it by what they say of the Embraers. So for now they can make do on the shorter routes with the A320/1 neo, even if they don't get the LR version.

If they do this and manage well, and they have a hard product that can compete on business class and is better in economy, and they grow in Europe, eventually they'll have to upgage and bite the bullet and buy bigger planes.
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