Baha, My point is simply that SWA's is a domestic service business model that has been proven to work, in good and bad economic times, over three business cycles since deregulation, and that has recently, rapidly expanded into the vacuum created by network carriers' domestic network retrenchment. Using that business model, SWA or others may at some point extend to international markets, transborder being the first most likely. No, SWA is not (nor are other point-to-point operators) "all things to all people", nor have they ever claimed to be Sadly, the ubiquity that network carriers like to say they provide has been proven over multiple business cycles to do little but consume or extinguish capital. There is hope, however, in that network carriers have begun to adapt to the realities of the changed market, "no gouging" included. Whether some (UAL included) have enough time and money in hand to complete their transformation and reform balance sheets during the balance of this business cycle is an open question. Barring that, few will have or be able to develop sufficient liquidity to traverse the next economic trough. - Bob, fan of airline business models that work, on behalf of airline clients, industry employees and investors Bahadir Acuner wrote: >Bob, >Please tell me that you are not jumping in the group of people that consider >Southwest the next best thing since slice bread. > >Granted that I am way more informed about airline travel than regular Joe >Moe, but even some consultant folks are aware of the differences between >Southwest and major airlines. > >Let's leave the food discussion out of the question for a moment. United has >the right package of products for me: >- Conveniently located hubs (SFO, DEN, ORD, IAD, FRA, NRT) and focus cities >(SEA, LAX) with all these combinations I can get a 36 inch seat with decent >leg and elbow room. >- Very ample destinations.. To this day the only place that I couldn't get >seats on UA/UX carrier was XNA and thank god I didn't have to go there. (But >after 2 months that project born dead UA started service to XNA) >- CRJ700s and ERJ170s have Economy Plus and F seats.. Show me another >airline that does that.. >- Southwest doesn't have international connection.. I fly to Istanbul at >least twice a year.. UA gets me there in comfort, style with nice >connections. > >- I consistently pay higher fares on United compared to Southwest, even when >I am traveling for personal trips. (Just paid $427 for SFO-RIC instead of >$337 on AirTran. No one can force me in a 737-700 with 17 inch width and 30 >inches of pitch). > >FlexJet, NetJets, etc. are not an option for me.. I am not a executive, I am >a worker that happens to commute with airplanes. > >To me 4 hours of drive is the breaking point between flying/driving >decision. Even in some cases I personally fly an aircraft, than driving. I >really hate driving because except people in Quebec no one knows the concept >of fast lane, and that drives me insane.. > >Gone are the days of $2000 r/t tickets. Both United and other "majors" have >reduced their cost structures to a point where they are pretty efficient. >So, I think they are going to be here to stay.. Some of the traffic will be >converted to coach only service, but United is really being smart about it >by putting Econ Plus on Ted flights. > >BAHA >Fan of UAL > >-----Original Message----- >From: The Airline List [mailto:AIRLINE@xxxxxxxxxxxxxxxxx] On Behalf Of RWM >Sent: Saturday, August 20, 2005 4:34 AM >To: AIRLINE@xxxxxxxxxxxxxxxxx >Subject: Re: NW-DL poss bankruptcy > >True enough, and this in part explains the comparatively higher >penetration of train travel in Europe. > >Still, there is no reason for network carriers to have gouged people >through "discriminant pricing" than: > >1./ they stumbled across the economic theory, valid enough, but >2./ they never updated 1970's (pre-deregulation) market research into >price/demand elasticity, and >3./ they thought their service was un-substitutable and "worth it" >(keep that KoolAid coming), and >4./ they thought (hoped) they could get away with it, relying perhaps >on PT Barnum's theory of markets "There's a sucker born every minute". > >Of course, PT Barnum was an optimist. > >And then came Southwest, the coup de grâce. > >- Bob > > > > > >Bahadir Acuner wrote: > > > >>Yes, >>But flying is an essential part of the economy. Distances are much higher >>than any other developed country and if you are like me going to clients, >>doing projects, etc. etc. there is no alternative to it. >> >>Currently there is a not single soul in the project that I am working on >>that is local to Bay Area. One guy comes from NYC, the other one from PIT, >>another one from LAX, me from SEA, PM is from East Coast, etc. etc. >> >>Tell them to drive and you will lose them.. >> >>The price elasticity of these people are much different than the folks from >>Baltimore going to see uncle Herb in Dallas.. :) >> >>BAHA >>Fan of flying the friendly skies of UAL >> >>-----Original Message----- >>From: The Airline List [mailto:AIRLINE@xxxxxxxxxxxxxxxxx] On Behalf Of RWM >>Sent: Friday, August 19, 2005 2:45 PM >>To: AIRLINE@xxxxxxxxxxxxxxxxx >>Subject: Re: NW-DL poss bankruptcy >> >>Gerard M Foley wrote: >> >> >> >> >> >>>Don't know if I've said this before here. If so, I apologize. >>> >>>It is quite possible that air passenger transportation in the U.S. may >>>go the way of all other forms of public transportation - subsidy or quit. >>> >>>The automobile is a fierce competitor. Although its actual costs are >>>quite high, a major part of the cost is the initial purchase. Once >>>the car is bought, it is very difficult to convince the owner not to >>>use it. >>> >>>The result is that the public transportation facility, rail, bus, >>>subway, and maybe airline too, finds that there is no fare point at >>>which costs can be recovered. Drop the fare and the added volume >>>costs more than the added income. Raise the fare and the reduced >>>volume won't pay the fixed costs. The public always has two other >>>options - drive or stay home. >>> >>>Gerry >>> >>> >>> >>> >>Excellent points, Gerry. Indeed, Southwest is fully cognizant that its >>pricing affects the modal split between private and public ground transport >>and travel by air. This is one of the reasons they only reluctantly raise >>fares by $2-4 each-way, when network carriers file for $20 increases. >>Fundamentally different views of price elasticity and as a result, >>approaches to pricing. >> >>- Bob Mann >> >> >> >> >> > > > -- R.W. Mann & Company, Inc. >> Airline Industry Analysis Port Washington, NY 11050 >> tel 516-944-0900, fax -7280 mailto:info@xxxxxxxxxx >> URL http://www.RWMann.com/ This e-mail is for the designated recipient only and may contain privileged or confidential information. If you have received it in error, please notify the above sender immediately then delete the original e-mail. Any other use of this e-mail is prohibited.