Southwest's Business Strategy Post AirTran Acquisition

[JetBlueAirwaysFan]

A thread on airliners.net got me thinking about what Southwest's business strategies may have to change after the consolidation.

The big one, the amount of flights per new station. Southwest in general has been veering off of their usual business strategy over the last few years with new flights to LGA, BOS, MSP, and MKE. A typical requirement for Southwest starting service to a new city is USUALLY that the station would be able to support 12-15 (somewhere in that range) flights from the start. Will a consolidated Southwest/AirTran be able to maintain that strategy?

Also, the BIG issue Southwest takes to heart. According to them, they have no hub cities. Will they change their mind after seeing how many of their flights operate into and out of Atlanta and finally declare a "Hub"? Let the debate begin...

[Delta777LR]

Southwest does have BWI, MDW, PHX, and DFW as their hubs

[steve1840]

Southwest does have BWI, MDW, PHX, and DFW as their hubs

Is KLAS a Southwest hub also? And doesn't Southwest use KDAL instead of KDFW?

[Delta777LR]

Yea I believe you are right, KDAL..

[JetBlueAirwaysFan]

Yes, it is DAL. What I meant was Southwest does not call them hubs. They never ever use the word hub for any of their cities with a large portion of Southwest flights such as BWI, MDW, DAL, etc. The question is, will they start using the word Hub after they acquire AirTran?

[steve1840]

If they don't usethe word "hub" to describe their larger volume airports now or in teh past, I don't see why acquiring another airline would all of a sudden start using it. It shouldn't really change their business model since they acquired AirTran. They currently have between 100-150 flights a day in and out of BWI and if they do not usethe word hub to describe that, I don't see them usign the word hub to describe ATL which would appear to have just as many flights.

[NIKV69]

Tommy summed it basically. As for the hub stuff WN is not a hub and spoke carrier but they enjoy the best of worlds by using places like LAS, LAX, BWI as locations to connect flights to other parts of the country.

[Alex T]

Most everyone is correct but I'll offer the terminology WN uses...

Stations with 100 flights or more a day are defined as "mega stations"

True, WN does not use the term hubs, they simply retime the flights to allow ICO (Internal Connection Opportunities). (Call it a hub if you want, just using WN's terminology)

SWA has crew bases at OAK, LAS, PHX, DAL, HOU, MCO, MDW and BWI. ATL wil be the next crew base for SWA, if they do not fence it, this is still being discussed. MCO crew base for FL will become WN's, no problem there, MKE base is still being discussed, either co-base it with MDW or make MKE folks go to MDW.

It used to be a minimum of 8-10 flights a day yes, HOWEVER in the old days of SWA, stations were only starting with 4 flights a day, so this is not entirely new. WN will keep and open what they can if it makes money, 1 flight a day or 200 flights a day be damned.

ICO's (Hubs to you guys) are at DEN, PHX, LAS, STL, BWI, MDW and HOU. OAK and MCO are not Hubs/ICO's, there are connections made available yes, but equally at other smaller stations. WN defines their ICO's as the stations I just mentioned.

WN will not be using the reservation system from FL or WN, it has come down to two reservation systems, SABRE and Amadeus, I believe are the two it's narrowed down to.

WN defintly bought FL for ATL, among the capaiblities to go international as well.

Expect a decision to be made by June now, it had to be pushed back to the 2nd quarter. They are meeting I think March 30th now.

To answer the OP, No, WN will not be using the word HUB anytime soon.

Alex

[steve1840]

Just out of curiosity, and not to change to direction of this thread, but what is going to become of their fleet of aircraft? I know that Southwest wants to have a stable of all one type of aircraft. Are they going to sell off the non 737 aircraft in the AirTran fleet, or are we going to be seeing whale-tails in Southwest colors?

[TSGSpotting]

Southwest plans to use the 717s I think.

[sporky]

Just out of curiosity, and not to change to direction of this thread, but what is going to become of their fleet of aircraft? I know that Southwest wants to have a stable of all one type of aircraft. Are they going to sell off the non 737 aircraft in the AirTran fleet, or are we going to be seeing whale-tails in Southwest colors?



I believe WN will be keeping the 717's and going to a 2 plane type system. My take on it is WN is going to use this as a learning experience in a way. Since they have never had a multi-type system, or its been a really really long time since they went from a 727 to 737 fleet with some dual types possible, having some experience with a couple types in the fleet might be very useful to WN if they do decide to not go with the Next-Next-Generation 737. This may be due to WN going with the possible replacement to the 737, Airbus A320 NEO, C-Series or the other choice. My $.02.

-Tad

[T-Bird76]

"Since they have never had a multi-type system"

That statement is TOTALLY UNTRUE!!!

the 737s that have been and currently are in WN's fleet are variants of each other and therefore make up a multi-fleet type system...in which they all require different training, different parts, different procedures. While they are based on the same FAMILY of aircraft they are of different design. Go take a gander at WN's training facility.....I'd wager to guess you just might find more then one type of 737 simulator...

Think of it this way.... A Ford Mustang GT is a FAR different car then a Ford Mustang Saleen series...same family different model, different engine, different suspension, and a different tranny. Much like a 737-700 and 800 are different then a 500 and 300.

The 717s will stay in place as they allow Airtran to serve half the markets AirTran currently serves. I'm not going to put up the link because based on reading this thread some folks REALLY need to do some research... There's a number of good studies that show the C series may very well be in WN's future as a replacement to the 717...oh those studies are not done by hack job college prof's but by real experts..

[T-Bird76]

Yes, it is DAL. What I meant was Southwest does not call them hubs. They never ever use the word hub for any of their cities with a large portion of Southwest flights such as BWI, MDW, DAL, etc. The question is, will they start using the word Hub after they acquire AirTran?

Does it really matter? Its just a word.

[sporky]

I do apologize for my previous post. I used the term multi-type, where in fact I should have been saying multiple airline families. While the 737 Classic's and NG's are quite similar in appearance and some operations/parts, they are also very different and thus require different parts/procedures based on variant. I didn't think of the whole picture as I was writing my response, but was remembering somthing specifically about the cockpit differences between the variants and pilot training.

From the cockpit standpoint WN made it a requirement to Boeing that the cockpits of the -700's needed to be standardized to the cockpits of the -300/500's so that WN pilots could move to different types throughout the fleet without having to train differently. If you look at the cockpit of a WN -700, while it is glass it looks completely different than any other -700 cockpit out there. I remember one of the Boeing solutions incorporated is a plate over one of the features of the -700 cockpit so that WN pilots would not be able to utilize it (though the pilots did find a work around). Also if I remember correctly, the FAA even certified the WN cockpits differently from what I recall.

Here is an example taken from Airliners.net:

Southwest 737-500 cockpit:
http://cdn-www.airliners.net/aviation-photos/middle/1/6/2/1451261.jpg

Southwest 737-700 cockpit:
http://cdn-www.airliners.net/aviation-photos/middle/0/1/4/1304410.jpg

Transavia 737-700 cockpit:
http://cdn-www.airliners.net/aviation-photos/middle/2/7/5/1657572.jpg

-Tad

[Alex T]

Within the Southwest Airlines system, the 737 is considered one type, and one rating, 737. That is all a Pilot needs for SWA is a 737 type rating, which qualifies them to fly on 737-500, -300 and -700.

The -700s are no longer in that configuration now, they were changed and modified back to PFD/ND which is Pilot Flight Display/Navigation Display, and when SWA did the RNP (Required Navigation Program).

The different training and procedures not so much, there is SLIGHT difference, but once the -700 got changed different parts, yes depends on what part you're referring to on each of the 737 type.

The 717 is going to stay for the time being and will be painted in the SWA colors. In time you will see 737-300, 737-500, 737-700, 737-800 and 717-200.

Alex

[NLovis]

I wonder. Think we will ever see a -900 in SWA colors?

[Art at ISP]

So what are the odds of having the 717's do ISP-ATL? That would be sweet.

[NoGreenBox]

Good morning all! First things first, Southwest has operated multi-fleet AND Multi-type in the past, see the link below for a photograph of one of the B727s that used to fly for Southwest. Not for a long time, and not in a major way, but still...

To chime in on both their "Hub" plans and their "fleet" plans, IMO, it comes down to Southwest evolving to meet their new role as not just a hometown, folksy, LCC based in the Southwest, but as one of the major players in the airline industry and, especially with the AirTran acquisiton, the primary competitor to Delta.

The term "hub" (or the lack of its use) is one way in which they can maintain a different culture and different identity in the minds of consumers. Its amazing how different words have different conotations for travelers. Many are the business travelers who might have an adverse reaction to the term "hub" and perfer a more point to point way of flying. Worst case, a connecting opportunity in an Aiport that is not ATL, or DFW, or DTW, etc. In this way, and by not using the term, Southwest can appeal the business traveller (and his higher fares) while establishing a difference from DL, AA, etc. Is it the same thing, of course.. you know that, we all know that.. but.. the general public isnt really going to squibble over the details, and as long as Bill working for IBM isnt stuck in Chiago during the next round of Thunderstorms because he connected in BNA or LIT or DAL, I dont think he will either.

As for aircraft type, that is an obvious area where, in order to maintain growth, Southwest has to make changes and adjustments. The addition of the 738 (and associated changes in labor requirements) are almost as significant from a route planning, scheduling, and logistics standpoint as the B717. Southwest has probably hit is maxiumum growth ability without the addition of new types (or versions)-- on both ends of the scale. They will make more $$ into LGA with fully loaded 738s, and they will be able to make inroads into the smaller Airtran markets, and perhaps even some existing SW markets with the 717.

If anything, Southwest is behaving like a succesfully maturing thirty year old, keeping what works and adjusting what needs to be adjusted.

oh and heres the 727..

www.flickr.com/photos/7903090@N06/3410697755/ (http://www.flickr.com/photos/7903090@N06/3410697755/)

[T-Bird76]

So what are the odds of having the 717's do ISP-ATL? That would be sweet.

I'd think its pretty high Art or I hope it is.... At the least its certainly higher then DAL doing it. The cost would be far lower for WN to open that up then DAL.

[Art at ISP]

I agree Tommy--and I hope it comes to pass...then A List here I come :)