April 5, 2011 on 1:00 am | In Airline News, Airline Service | No Comments
The latest stats on airline complaints have Delta at the top with 2 complaints per 100,000 passengers and Southwest at the bottom with just .27 complaints per 100,000 passengers. The legacy airlines (and many of their regional airlines) occupy the worst positions with LCCs and smaller airlines doing the best. Does that mean that bigger is worse?
No, not really. Southwest Airlines carries a tremendous number of passengers but it carries them on shorter flights and most flights are “point to point” rather than hub flying. In fact, the better airlines tend to be more “point to point” flyers and the worst airlines are those with exceptionally heavy hub flying. Does that mean hub flying is bad?
No, not really. It’s notable that Airtran which definitely uses hubs occupied a low complaint position despite being heavily hubbed out of Atlanta, home of Delta Airlines.
If anything, I would argue that it indicates just how much an airline values a customer and their repeat business. Those airlines holding bad positions sacrifice service to maintain revenue and in many instances that works out OK for them. However, those airlines who pretty much always show profits in good times and bad are the ones that are occupying the best positions.
There is a lesson there for airlines: Value your passengers total experience and they’ll value the services you offer.
March 25, 2011 on 1:00 am | In Airline Fleets | No Comments
A local friend made a comment to me about Delta Airlines and their mish-mash of a fleet vs Southwest Airlines and their one aircraft type fleet. His comment was aimed at the success difference between the two.
Well, not so fast. When you consider airlines 30 years ago and airlines of today, there is one thing that stands out. Fleet size. Today’s airlines such as Airtran and JetBlue would be behemoths in the market place in 1980 with 138 and 163 aircraft respectively.
Let’s take a look at what truly large airlines have in fleet size. Southwest Airlines, the 800lbs gorilla of LCC carriers, has 547 aircraft of which all are 737s, yes, but which is actually comprised of the 122 passenger -500 and the 137 passenger -300/-700.
United Airlines and Delta Airlines both have over 700 aircraft and American Airlines presently has about 620 aircraft. Each of those three carriers have a broad range of aircraft types, seating capacities and range capabilities.
A one type fleet works well for the smaller airlines because, yes, it does allow them to save money on maintenance and it keeps things simple when negotiating with unions about how much one is paid to fly what type for what distance.
But as you grow larger, it really is better to have some flexibility. Even Southwest acknowledges that the Boeing 717 aircraft they’ll gain from Airtran (number over 80) should help quite a bit in matching the right aircraft to the right route. They’ve gone farther than that, though, by ordering the 737-800, a larger aircraft than they’ve ever operated before.
If Southwest expects to continue to grow, they’ll have to move into both larger and smaller markets than they have customarily entered in the first 40 years of their life. The fleet types aren’t what will make their lives complex when it comes to the cost(s) of maintaining them. What they will have to contend with is the idea that a pilot of a smaller aircraft should earn less than the pilot of a larger aircraft. They’ll have to deal with scheduling flight attendant crews of two different sizes and that’s something they’ve never had to do before. Fortunately, the range in size between the 717 and the 737-800 is not so great that they can’t argue that all their pilots should be paid the same (and I would agree.) The truth is, while their fleet may be different, the missions aren’t that different in terms of distance, turnaround, etc.
Delta is succeeding with a broad range of aircraft in ways not seen before. Yes, they have added complexity but an airline big enough to operate more than 700 aircraft should be complex. Could they simplify? Certainly. Should they? I’m not so sure. There can be disadvantages to dealing with one aircraft manufacturer instead of two in terms of the bulk of a fleet.
Neither Boeing nor Airbus can really supply enough aircraft to Delta on a timeline that would make sense to replace, for instance, Delta’s 563 single aisle aircraft. It would take 40 aircraft a year to replace that fleet over nearly 15 years. Those manufacturers have to supply a number of other airlines as well.
Boeing and Airbus can deliver about 32 to 38 aircraft a year in their 737/A320 families. A Delta replacement order would conceivably consume more than one month’s production capacity in a calendar year and there are a whole lot more airlines out there of size than just Delta.
By using both manufacturers, Delta would get more flexibility in deliveries and more reliability as well. This is true for any airline of size. In addition, by making each manufacturer compete for those orders, the airline is liable to receive a better price on each aircraft and when you are talking about 500+ aircraft, that could well mean savings reaching into the hundreds of millions of dollars.
The days of ordering “just Boeing” or “just Airbus” may well be over for any airline of significant size. This may be true even for Southwest in the distant future. Boeing and Airbus are unlikely to remain in the 100 to 130 seat category and will probably cede that to the next generation manufacturers such as Embraer and Bombardier. That doesn’t mean an airline, even an LCC doesn’t need those aircraft, it does.
It’s notable that JetBlue already has a two fleet strategy as well as Airtran and Frontier. Southwest effectively has a two fleet strategy and probably needs 3 different sizes to work with going forward.
Flexibility is the key. Routes change over time. Some routes yield more and more passengers while others are best demoted to smaller aircraft over time. Southwest wouldn’t be flying 737s to places like Lubbock, Texas if it didn’t need a one-stop location to continue that flight to a larger city from the Dallas area. Southwest flights to Lubbock and El Paso on 737s continue on to other cities such as Las Vegas, Phoenix and Los Angeles.
But when the Wright Amendment goes away, the need to fly those one-stop flights goes away. I actually look for Southwest to start evaluating aircraft such as the Embraer E170/190 series or Bombardier C900/1000 or CS Series in the next 5 to 8 years.
You’ll find that the one fleet strategy is effective today only for airlines requiring a fleet to fly between mainline destinations. Once they enter into smaller markets and larger markets, two or more types are not only required but justified.
February 15, 2011 on 1:00 am | In Airline News, Airline Seating | 1 Comment
Delta Airlines is going to introduce its own version of “premium economy” seating on its international flights. In this case, it’s called Economy Comfort. Users will get the same seat economy has but more leg room and some extra amenities such as no charge for drinks.
Often when I consider what to write for this blog, I find myself wanting to be an advocate for the passenger as much as the airline geek as well. The truth is, airline geeks can be a vicious bunch when it comes to understanding or embracing what the common passenger is experiencing.
I think the common passenger experience on legacy and SuperLegacy airlines is appalling. Sadly, so much of the improvements that would improve that passenger experience could come at little or no additional cost. At the worst, they could come from legitimate fees designed to offer a better value proposition.
Seating is one of those value propositions that I think is horrific on most US airlines. Seat pitch is terrible and we all know that it often is only reduced more and more. We’ve even seen airlines introduce new “thinner” seats to to cram more seats onto an aircraft. One consideration few ever gave to that proposition is that “thinner” really does equate to less comfortable as well.
When I consider how far we have come with respect to first and business class vs economy, I’m gravely disappointed. It astonishes me that airlines will spend a fantastic amount of resources (and it really is fantastic) on what can amount to maybe 10 seats on a large widebody aircraft but will completely ignore challenging their seat supplier to supply a better seat for those in the economy section.
Make no mistake, while those in the front of the bus might represent real profit, it’s those in the back of the bus that make or break the airline when it comes to meeting its expenses. Without those economy passengers, the airline would sink quickly. Notice that all business class airlines have never thrived?
There have been tiny little improvements and changes over the years. I actually like and enjoy the Airtran Recaro seats on their 737s, for instance. But isn’t kind of shameful that Southwest Airlines offers what is arguably some of the best economy seating in the world? Great leather seats with good seat pitch that, in many cases, exceeds legacy airlines pitch now and those same seats are not “thinner” or “harder”. They’re comfortable. Genuinely comfortable.
But here’s the thing, it’s not that Southwest improved so much. It’s that everyone actually got so much worse, really.
I”m not going to argue for more seat pitch. If you’ve got 32″ of pitch, you win in my book. If you’ve got 30″ of pitch or less, I consider you a chinchy airline with zero class. In between, you’re lackluster and have no argument for purchase of a ticket except, possibly, price. But I won’t even argue for more than 32″ of pitch.
But don’t tell me that we can’t challenge seat designers to come up with a better seat that is cost effective to install, practical to maintain and which offers a better seating experience. We can, we should and the airline who does will have a real and tangible value proposition to offer consumers. Build it, advertise it and they will come.
In the meantime, I’ve no problem with charging for more seat pitch and a free drink (which I’ll point out wasn’t free but simply included in the increased price as in the days of old.) I’ll often pay for such an amenity myself.
However, let’s not get carried away lauding airlines for seat designs that, for the most part, reside solidly in 1970′s thinking.
January 6, 2011 on 1:00 am | In Airline News | No Comments
At the beginning of each new year, I like to review what I thought would happen over the previous year and where I think things might go in the next year. Let’s take a look.
I thought that not much would happen with AA labor in the past year and that pretty much was the case. We’ve now seen several years of virtually no movement on solving these issues and I suspect that 2012 is the year that we see some kind of movement. Look for the flight attendants to be the aggressive parties but the pilots to be the leaders. All they need is a management group that wants to get something done. This might end up being a make or break year for AA CEO Gerard Arpey and it could well be based on coming to an agreement with their labor groups.
United Airlines (and Continental) really didn’t go where I thought which was the status quo. Instead, they merged and got going on getting somewhere and I like that. I didn’t think they would merge and said so at the beginning of last year. They proved me wrong. However, I think CEO Jeff Smisek hasn’t considered carefully what he needs to get agreement on to move forward with each phase of the merger. Look for this year to be good for United financially but bad on getting labor groups to agree on something. I don’t think they are headed in the same direction as US Airways . . . yet.
This is a year for Delta Airlines to continue rationalizing its routes and aircraft. They spent much of last year doing so and saw great financial results. However, their goal of a sustained 10%+ profit margin makes me think we’re going to see some weird stuff out of them somewhere around the beginning of spring. Probably in the form of new and innovative fees.
US Airways pretty much performed as predicted and I like how they are earning a profit but I hate how they still have no agreement with their flight crews that will permit them to quit operating two airlines in one. If Doug Parker were to have a New Year’s Resolution, it should be to hire someone who’ll get that taken care of this year.
LCC(s) and Regionals:
I didn’t see a merger partner for Southwest except, perhaps, Sun Country. Southwest proved me very wrong on that but I like the results. One concern I have is the somewhat “plodding” progress towards consummating this merger into one company. Does it indicate a plodding approach to actually consolidating operations? One good thing is this brings the potential for greater international flights and, hey, Southwest, consider just keeping that Airtran reservations system and then spending some real time to pick or develop a new one that will last another 30 years. You could do a lot worse.
Frontier/Republic is holding its own and I thought they would hold their own. I think they’ll hold their own this year but I don’t see them merging with anyone and I don’t see them growing subtantially either. Brian Bedford could prove me wrong and I hope he does.
Airtran made the Milwaukee market. They deserve the credit for the huge growth that city has seen in air travel. Southwest needs to commit to doing the same when they lead the game.
I slammed Virgin America a few times last year for appearing to be afraid to compete. In particular, with American Airlines. Finally, Virgin America made the plunge and came to DFW with flights from both San Francisco and Los Angeles. I liked the move and I think there is room for them to grow here. Time will tell. One thing I’ve noticed so far: AA doesn’t seem to be attacking them quite as badly as one would have expected from AA just 5 years ago. Mr. Cush, let me suggest that you could really do well with some flights from DFW to the NYC area. In particular, to Newark.
Alaska Airlines has moved closer to Delta in the past year and that worries me a bit for Alaska. They’ve generally been an airline willing to do a deal with anyone that made sense. Now, they appear to be more and more the Delta lackey and that could harm them in the long run. Another thing: Alaska doesn’t have any more logicical merger partners that make sense. American Airlines may have missed an opportunity here by not getting closer to Alaska instead of withdrawing more and more.
I don’t think we’re going to see any big mergers in the US this year. We might see one minor merger and that’s OK with us. I think this year we’ll see legacy and SuperLegacy airlines attempt to earn as much money as they can to retire as much debt as they can and to bank as much war chest as they’re able. However, I see competition heating up this summer and I think the LCC and new entrant carriers are going to put pressure on the legacy and SuperLegacy airlines in the form of adding capacity *and* routes. The question is, will the industry discipline we’ve seen hold strong or will someone crack?
November 21, 2010 on 1:00 am | In Airline Service | 4 Comments
I was a somewhat early adopter of Airtran starting with some flights in the late 1990′s and for a variety of reasons, the airline just worked for me. No one would describe Airtran as having a luxurious service product but, somehow, it was a service product that found a fan base.
Now there are many Airtran Fans who are lamenting the merger between Airtran and Southwest Airlines and what it means for Business Class. Right now, it means it’ll be going away.
I think that’s a mistake. The way Airtran operated their business class was somewhat unique and was a great upsell for many passengers including me. I have often arrived for a flight and paid the upgrade fees at the spur of the moment although I have to say that buying that upgrade at the last minute has gotten to be pretty difficult.
Airtran’s business class is a bit special. It’s really more a decent seat, a few free drinks and a ride at the front of the bus. It isn’t a luxurious “total experience” that a SuperLegacy might offer but it does embody the 3 best parts of riding in a business class product.
And at the price it was offered at, it not only made money for Airtran, it also didn’t tax Airtran’s LCC service model either. Airtran didn’t have to dedicate one of the cabin crew to that section to rub the toes of those passengers and it didn’t have to carry meals either. They did their drink service and when in the front of the bus, they didn’t charge for the first couple of alcoholic drinks.
What I’m really saying is that Airtran’s business class actually *does* embody the Southwest service model. It is the Southwest service model translated by Airtran into a business class product.
In fact, I think you could retain it and toss assigned seating to the wind and few, if any, would even pause over that.
But here is the thing: it’s time to get over the idea that Southwest is the champion of the little people and it’s time to get over the idea that Southwest is completely egalitarian.
They are neither and, in some respects, they never were. Southwest was successful in Texas because it offered fast travel between city centers for the new breed of businessmen: entrepreneurs. It is true that Southwest did stimulate first time travel in people as it grew across the country but those days are over too. The 1980′s were a period when air travel became accessible and it was solidified in the 1990′s but the idea that there are a great number of people in various markets who have never considered air travel until Southwest (or other LCCs) showed up is disingenuous at best.
More to the point, an Airtran business class product is well suited to the Southwest frequency model that is still employed today. Imagine the revenue opportunities that exist in their newest markets from New York City to destinations like Chicago, Baltimore, Washington DC and Houston.
Southwest has matured in many ways and all for the better. Retaining a business class product like Airtran’s offers far more opportunity than it does risks and for SWA to dismiss it out of hand is a flawed move. Keep it, play with it and look for advantages. Use it to start eroding the appeal that newer LCC models like jetBlue and Virgin America have built up. If you think it’s the in-flight entertainment those airlines offer that is driving their business, you’re kidding yourself. It’s the better seat at the better price where they compete against legacy and SuperLegacy airlines.
Southwest’s quick move to announce it would go away struck me as inflexible and particularly so given their agility in most things. Yes, they are slow adopters, experimenters and generally an airline that waits for scale to develop before they make a move. The scale is there, Airtran is a ready experimentation and they’ve already adopted a number of features to better accommodate business travelers.
For all you Airtran Business Class Fans, I’m with you. It’s worth keeping not just because you like it but because it has all the appearances of being a solid business choice.
November 2, 2010 on 1:00 am | In Airline News | No Comments
Southwest Airlines CEO Gary Kelly speculated that Southwest could one day be flying to Hawaii and that has tongues wagging in the airliner world. Kelly mentioned this possibility in connection with their decision to purchase the 737-800 which they should arrive at very soon.
The fact that no one confirmed that Southwest would in fact buy the 737-800 at their recent media day leads me to believe that they are still in negotiations with Boeing and probably it has to do with price more than anything.
Still, even if they add the 737-800, it doesn’t mean they’ll do Hawaii. Flights to Hawaii require more than just that aircraft. It means proving you can do ETOPS flights and it means keeping a sub-fleet of aircraft that can do ETOPS flights. ETOPS means flight crews get more training and aircraft are specially equipped and specially maintained.
Alaska Airlines is doing such flights at present and they appear to be succeeding well enough that they’re adding flights to Hawaii from other cities. It is doable and it may well be profitable.
However, if this does happen, I think it might happen in 4 or 5 years, not next year or the following. Southwest has a bunch of things to chew on at present such as their merger with Airtran, phasing in new IT systems and just adopting not one but two new aircraft types: the 737-800 and the 717.
If this does happen, it’ll happen once they’ve managed to digest their other challenges. Don’t go looking for that Honolulu destination on their website just yet.
October 30, 2010 on 1:00 am | In Airline News | No Comments
Southwest has been pretty candid with people attending the Southwest media day and has made a number of comments and announcements that offer more clarity than we’ve seen in a while.
First up: Southwest and Volaris Airlines will begin interlining on December 1st. This is quicker than I would have guessed based on the radio silence we’ve heard on this subject for months now. It’s not a codeshare because you won’t be able to buy a Southwest ticket to fly on a Volaris flight. You will, however, be able to seemlessly transition between a Southwest flight and a Volaris flight to Mexico. You wouldn’t be able to do codeshares at present anyway since Mexico’s air traffic system got downgraded to a Category 2 recently.
Southwest sees the seniority list integration between its pilots and Airtran pilots as their number one issue. I agree. The rational people out there would have you believe that Airtran pilots should be happy no matter what since it is almost guaranteed that they’ll get a pay raise with this merger. Sadly, rational thought doesn’t enter into the equation when it comes to these discussions. In addition, pay raises aren’t the only factor when it comes to seniority. Seniority also determines the type of aircraft you’ll fly and where you’ll be based out of. I doubt it will be a “date of hire” integration and I doubt it will be a mere stapling integration either. There will probably be some sort of weighted integration and possibly jobs in the ATL area (and perhaps a few other bases) will be “fenced” off for Airtran pilots for a period of time.
Southwest says it will be charging $5 for WiFi access on its aircraft. This is pretty cheap compared to the fees for Aircell on other airlines. Apparently Southwest has done their homework and determined that’s the sweet spot for maximizing “take” on each flight. There will be no graduated fee for varying durations of flights. Southwest doesn’t know what it will do with Airtran aircraft equipped with Aircell because they don’t know what those contracts look like yet and they won’t until the merger is consummated. I suspect that Aircell will remain in place until those contracts expire and then they will be replaced with R0w44 systems to harmonize the fleet. That would be a good news for Row44 who hasn’t gained much in the way of market share when compared to Aircell.
Finally, Southwest thinks Atlanta could quickly become its biggest city once it has finished its merger with Airtran. Las Vegas currently is the largest but Southwest execs see lots of additional route opportunity in Atlanta already. They’ve identified at least 2 dozen new destinations that could be served and Atlanta is already pretty big for Airtran. Look for more frequency and a net gain on routes once Southwest really takes over.
October 15, 2010 on 1:00 am | In Airline News | No Comments
Southwest Airlines has reached a tentative agreement with its pilots union that, if ratified by the pilots, will permit Southwest to choose to adopt the 737-800 into the fleet. Southwest says it is still evaluating the choice and will make a decision soon.
Some have speculated that doing this and adding Airtran into the mix would be unattractive to Southwest. I say it that aircraft is coming and sooner than later. Despite Southwest’s potential gains (via the merger) at airports where this aircraft would be most useful, it still has great potential for the airline in those markets and others including, perhaps, some routes that Southwest will harmonize between itself and Airtran in the future.
Ultimately, this means Southwest is suddenly looking at operating 2 types and 3 classes of capacity in its system in the near future. The Boeing 717 on the bottom end w/ 117 passengers and the Boeing 737-500 sitting there right next to it at 122 passengers is the first “class” of capacity. The Boeing 737-700 at 137 passengers will remain the mainstay aircraft for mst routes and represents the second “class” of capacity. Finally, the Boeing 737-800 will offer increased capacity at about 175 passengers.
I wouldn’t expect the Boeing 737-800 fleet to be that large for a long time. Look for a sub-fleet of these that will probably range from 40 to 60 unless and until Southwest decides the entire fleet needs to bump up in size.
October 9, 2010 on 1:00 am | In Airline Service | No Comments
After the merger announcement between Southwest Airlines and Airtran last week, there was quite a bit of speculation on who would be relieved by the announcement and who would be on edge over it. Conventional wisdom (which includes me) saw this move as relieving Southwest of some burdensome competition in some markets such as in the NorthEast and in Milwaukee. Airtran competed effectively to drive down pricing with their flights.
Some have said Delta has nothing to worry about and Frontier has been foolish enough to see this as an improvement for them. I think Delta needs to worry a lot and Frontier is made weaker from this merger.
In Atlanta, Delta won’t see much change in Atlanta, I agree. It’s possible that in the regional area near Atlanta, Delta may even do better in the short run. However, Southwest has something Airtran didn’t: frequency. I think that Delta will discover that when Southwest’s capacity for frequency is deployed on traditional Delta / Airtran routes, competition is going to get a bit stiffer. The truth is, Airtran had many destinations but not always that much frequency. It’s one reason they were tolerated by many legacy airlines.
However, legacy airlines have generally always defended routes from other carries including LCC carriers by the ability to add frequency. That’s never worked well against Southwest . Southwest doesn’t go into a market with the idea of being a small player. They enter routes where they can deploy reasonable frequency right off the bat and they know how to schedule flights just as well or better than most legacies. Southwest’s size is already formidable weapon and it got a lot more formidable when the Airtran merger got announced.
Frontier and other LCC carriers (Hi jetBlue!) shouldn’t feel relief either. It’s that same frequency with an additional weapon that can spell hard days ahead for them, too. Southwest can compete with anybody’s frequency and I can think of just one LCC in just one area that has the frequency and capability to match what Southwest can ultimately deploy. jetBlue has that in the New York City area. But that’s it and Southwest is clearly building momemtum to be a bigger player in the NYC area.
That additional weapon? Network. Yes, Southwest isn’t a traditional hub and spoke carrier but they do know how to make their network work for the consumer. People aren’t adverse to connections if the price is right and the risk is relatively low. Southwest has lots of focus cities / hubs to provide network access to destinations that the other LCC carriers just don’t have.
Frontier has Denver and Milwaukee and is spread thinly in many cases. While they compete against Southwest in Denver, that’s changing slowly. They’ll never compete against Southwest in Milwaukee because Southwest is already capable of offering a network of destinations that Frontier can’t begin to approach.
Southwest has also done something that other LCC carriers have foolishly ignored. They covered the midwest. It isn’t sexy territory but it’s territory with lots of industry and commerce and need to get from point a to point b. It’s an area that appreciates a frugal approach to life and it’s an area with lots of family connections between cities. It’s also an area that has a strong attraction to the leisure areas that Southwest is strong in such as Florida and Arizona and California.
And now Southwest will have international capability to those same kinds of attractive leisure destinations in the Caribbean and Mexico. Frankly, I think Frontier should be very scared of what Southwest can bring to the table because it potentially spells their demise. I think jetBlue needs to start thinking about how they can grow their network and quite adding flights to the Florida and the Caribbean from the NorthEast.
jetBlue is also weak in another respect. They’re building focus operations in cities that are notoriously difficult to operate from in weather. Their operations can be significantly impacted in New York City, Boston and Baltimore-Washington by the very same storm system. All three of those are focus cities for them. Southwest doesn’t have those same weaknesses. They fly in the same areas and they’ll no doubt grow in those same areas but they continue to manage their risk by operating flights from those areas to other focus cities that are far less likely to be impacted by the same storm system.
And Atlanta will just add to that capability. I’m not saying Southwest’s system is perfectly isolated from risk but it is far more insulated from risk than other carriers like jetBlue and even the SuperLegacies.
Southwest is scarier because it has lots of resources and can operate in a very agile manner. The LCC’s can’t and the SuperLegacies can only do so much within the limitations of their hub style operations.
October 5, 2010 on 1:00 am | In Airline Service | 1 Comment
I like Southwest and feel that they have, more than any other airline, executed an extremely consistent business plan for nearly 40 years. I think they’re a better value today than they were 20 years ago and I recommend them frequently when people ask me for a suggestion on what to fly.
That said, I think Southwest has a few weaknesses that have really begun to stand out in the last few years. One of those is democracy. There was a time when a passenger on Southwest Airlines knew one thing for sure: everyone got on that aircraft on pretty equal terms. Lately, in the drive to attract a more business oriented passenger, things have begun to seem, well, different.
Now some passengers appear to be more equal than others.
That comes from some of the fees that Southwest has instituted. Mind you, I like their approach to fees in general because you are getting more for paying more on Southwest vs other airlines charging you for what was once included. But this rather soft approach to offering something attractive to the business traveler is starting to look a bit silly.
I genuinely believe that Southwest should look at adopting a business class on their aircraft. I think they could pioneer a different business class that offers value, comfort and workspace for a great price and I think buying Airtran gives them the chance to take a look at the viability of that. It would be poor form to dismiss it out of hand at this point.
They’ve already said they’re going to replace/upgrade their IT systems and I think that’s fantastic. However, I would suggest that instead of an internally focused effort over many years, it’s time to do a cost benefit analysis on adopting an industry standard. There is a reason for Southwest’s present system and that has to do with the rather unjust way it was handled in other reservations systems nearly 2 decades ago.
Thing is, that world doesn’t really exist anymore. I admired their approach to internet sales and going it alone. I liked that they saved money on travel agency fees back in those days. But those days are over and I wouldn’t mind seeing Southwest listed alongside other airlines when I shop.
I think Southwest is now missing traffic because they aren’t listed alongside other airlines on travel websites. I think they’re too easy to forget in many instances and a bit of a pain to compare fares with at other times. Adopting new IT systems is a perfect time to do a cost benefit analysis of joining the rest of the world again when it comes to booking a flight. It might be the right decision.
Southwest likes experiments and buying Airtran and deciding to keep the Boeing 717 fleet is an experiment. Southwest will see how pilots get along with the concept of two fleet types and how managing crews across these types works out for them. It also allows them to see what happens when they right-size an aircraft to a market. That’s all good but I think they could stand to go one step farther.
Which leads to the idea that Southwest doesn’t have hubs. Well, actually, they do. If you want to call them focus cities, fine by me but they’re hubs. People fly aircraft into these “hubs” and connect with other flights to other destinations. The difference is that flights into and out of these hubs are more rationally scheduled and don’t involve “banks” of connecting flights.
But they still have “regional” flights bringing traffic to these “hubs” where passengers can connect to a flight to a destination farther away. It’s time to look at the possibilities of flying these “regional” flights with different equipment. It is no secret that I like the turbo-props for these flights because a turbo-prop can generally fly a segment just as fast as a jet when its distances are under 400 miles.
Southwest has a lot of sub-400 mile routes and I think they’re going to have more in the future, not less. A fuel efficient turbo-prop would permit Southwest to offer even lower fares and with Southwest’s famous ability to operate and maintain aircraft, I think they could make it work at a level not seen in the US so far.
But if turbo-props are just too revolutionary, they should also take a look at the latest generation of so called regional jets. I like the Embraer E170/190 class for Southwest. It fits all their original criteria for a jet and can fly those sub-400 mile routes very quickly and efficiently. It’s a better choice for a two type fleet than the 717 is. And it has the range to fly some long and thin (for Southwest) routes that would fit well within their point to point style of flying.
It’s a great time for Southwest to learn from this merger. I respect their decision to be Southwest but that decision doesn’t mean things don’t change. Just looking at Southwest’s history for the past 20 years will reveal plenty of change and it feels like one of those moments when SWA can adopt some change while integrating another airline. They would be wise to examine what Airtran was doing right before discarding it out of hand.
October 1, 2010 on 1:00 am | In Airline News, Airline Service | No Comments
With the Southwest/Airtran merger announcement, there has been a lot of rampant speculation on what US Airways or American Airlines should do in the face of this industry consolidation. Many see them about to come under pressure from financial markets and shareholders to find a pathway to play in this consolidation game.
While you could argue that US Airways is at a disadvantage to any of the SuperLegacy airlines now, I don’t think that AA is so much at a disadvantage that they *must* do something. In fact, their problem is that a merger doesn’t bring much to the table for them since they would be the surviving entity and they already have high costs. US Airways is doing just fine for now and I think they can afford to be cagey for a while at the least.
The truth is, I think jetBlue will be under more pressure than any other airline. Their growth is largely stalled right now and then continue to re-trench in existing markets. They’re busy defending NYC, Boston and, to a lesser extent, the Northeast. While I admire how jetBlue got its foothold by operating out of JFK airport, I also think that they’ve begun to forget just how much the Atlantic seaboard chews up airlines.
Yes, they’ve got their nifty trans-continental routes to the west coast and they appear to do pretty good with those on some level. What jetBlue doesn’t have is a clearly defined pathway forward. What’s their stategy? The status quo? More and more trans-continental routes that don’t offer all that great aircraft utility? More flights from the Northeast to Florida? More flights from Florida to Caribbean leisure destinations? None of that sounds very attractive.
Lest you think I’m speculating, read this story quoting CEO Dave Barger. He states they’ll continue to focus on their “growth plan” for Boston and the Caribbean. I’ll point out that Southwest Airlines is already a national airline with a hole in their network. That changes with the addition of Airtran and they become *much* more competitive with jetBlue upon completion of the merger. Yes, I think SWA will stumble some during integration but I do not think that will inhibit their ultimate success.
Contrary to popular belief, there is some low hanging fruit out there for the right airline. jetBlue has the right service product, labor costs and, frankly, network to go take advantage of that. But there is no vision for that kind of growth.
I suspect one thing that is inhibiting such growth is aircraft financing. It’s a tight credit market out there and good terms on aircraft aren’t nearly as easy to acquire as they once were. However, there are airlines out there with plenty of the right equipment and who could possibly be bought for the right price.
I think it’s jetBlue that finds itself under pressure for an acquisition and/or merger. It can’t continue to grow in its existing markets. There isn’t any room to grow without a bruising and expensive battle. I think it is going to take new leadership at jetBlue. Dave Barger does a great job of keeping operations going and maintaining the status quo but he has done a poor job of setting a vision for growth into new markets. There is plenty of opportunity out there and many airlines are seeing it and executing a strategy for it. That is going to put a lot of pressure on jetBlue in the next year or two to find a way to articulate what their next plan is.
September 30, 2010 on 1:00 am | In Airline News, Airlines Alliances | 5 Comments
About 24 hours after the Southwest Airlines / Airtran announcement, rampant speculation on who American Airlines should partner with started up. The truth is, while I can make an argument for them to merge/acquire US Airways, I think they’ll shy away from a merger. If they do go shopping for an acquisition, I don’t think it will be oriented towards a real “merger” a la Delta/Northwest or ContiUnited.
There are a couple of targets left. Alaska Airlines strikes me as one that should interest Southwest, American Airlines and Delta. I think it’s pretty hard to get a deal done with Delta because of regulatory issues particularly in the Seattle area. I think it’s pretty hard to for AA to get a deal done with Alaska because both parties have high labor costs and AA just won’t know what to do with the rather unusual operations Alaska performs in Alaska.
I don’t think anyone is going to buy jetBlue at present and jetBlue’s CEO says they’re going to grow organically. I would be happy to see jetBlue just get outside of its NY/Florida comfort zone and stop treating the midwest like it has the plague.
Frontier could be an interesting proposition for jetBlue, I think. Sadly, I also think that Republic Airways is going to hold on to Frontier for dear life given what’s going on in the regional airline world. Nevertheless, I do think that jetBlue could harmonize Frontier’s service and routes to the jetBlue way and make something of that airline.
US Airways? Well, they are the somewhat pretty girl who never gets asked out anywhere except to make some other guy jealous. Until they get their labor house in order, I think it’s going to stay that way. Their executive corps, however, ought to be attractive to someone. Despite all of US Airways weakenesses and their “East/West” style of ops, those guys make money. There is a lot to be said for that.
I think they are more attractive for bringing into a new alliance. Currently, US Airways belongs to Star Alliance but ContiUnited kind of makes them look superfluous. SkyTeam just doesn’t need them either. Oneworld aka American Airlines/British Airways, on the other hand, could perhaps take advantage of them. The deal would have to be a bit sweet because US Airways, if nothing else, is enjoying a nice “under the radar” ride on Star Alliance right now.
I can’t think of anyone who could find a use for Virgin America at this point except, well, the Virgin Group. Even the Virgin Group seems to have a hard time seeing a real value for working with Virgin America. If they had any money, I would point them to Frontier but I think Republic Airways would just laugh out loud.
The truth is, I think there is suddenly some opportunity out there to start a new airline. I would look for weak airlines who have major hubs and very little competition. Some place where business customers and leisure travelers alike are dissatisfied with their current offerings and restrictions. Some place that has a history of embracing the airline industry and where you can hire experienced people to kick that venture off. That would be a great place to start something new. I wonder where such a place might be?
September 29, 2010 on 1:00 am | In Airline Fleets, Airline News, Airports | 1 Comment
Regulatory authorities are going to start seeing Southwest Airlines differently as a result of this merger. SWA has done a great job of characterizing itself as the small underdog. In truth, it’s a big airline and this merger is going to get authorities such as the Department of Transporation and Department of Justice to see it a bit differently. SWA flexes more muscle against its own competitors than most realize and this move does eliminate a lot of problems that Airtran was giving it. Airtran had lower costs and a nice service product and competed very, very well against SWA on major market routes. SWA will forever be seen differently going forward now.
Southwest’s fleet strategy has always been a popular topic of conversation. While it’s true that they’ve stayed close to their 737 roots, different aircraft types aren’t unheard of for them. In the 1970′s and 1980′s, they briefly operated 727 aircraft. In the 1980′s they bought Muse Air and operated their MD-80 aircraft for a while too. The addition of the 737-500 was, in some senses, the addition of a different type for them as well.
Adding the 717 isn’t quite the challenge for them that many think it is. This purchase grows their fleet from approximately 550 aircraft to 602 737s and 86 717s or 686 aircraft total. Let’s put that in perspective for a minute. American Airlines has about 630 aircraft, Delta about 728 and the soon to be ContiUnited will have 700. Southwest leaps past AA and plays in the SuperLegacy category on fleet numbers. It will continue to lag behind on capacity measured as revenue passenger miles. Nonetheless, SWA is a huge player on a global scale.
There is already speculation about SWA “de-hubbing” Atlanta. Well, I think the structure of the routes into and out of Atlanta will change dramatically. I think we’ll see a SWA-like operation in Atlanta after a period of time. However, it will remain a “hub” in the sense that will be a major player in the SWA system just like other cities such as Phoenix, Los Angeles, Houston, Dallas, Denver and Chicago. Those cities are hubs too. SWA just doesn’t operate flights into their “hubs” like a network carrier does.
I wonder if SWA isn’t missing an opportunity to reinvent itself with this purchase. Airtran did many things very, very well and they are a profitable and very competitive carrier. They introduced Sirius/XM Satellite Radio on their flights. They were one of the very first airlines to have an all Aircell GoGo Wifi fleet. Their business class product is popular and upgrades to that business class product were also profitable.
There are some elements here that SWA could stand to step back and examine. They aren’t nearly as far from their own business model as they think. SWA is working hard to attract the business passenger and that business class product might well be worth keeping and even introducing across the fleet. Southwest is introducing Row44 Wifi (too slowly in most people’s opinion) and now they have an airline that knows how to do it quickly. They have a unique opportunity to take a look inside the viability of Aircell’s GoGo product and see if they don’t want to reverse course.
I don’t think onboard entertainment is necessary but I do think the Airtran satellite radio offering is a great value added item on their flights and, again, it’s worth taking a look at. I don’t want SWA to be jetBlue but the satellite radio quite possibly “fits” within their quirky nature.
I don’t think many airlines, if any at all, will object to this merger. It eliminates a lower cost competitor for them and replaces them with someone who has rising costs that are moving closer to legacy airline costs these days. In addition, the sheer size of SWA and the access it gains to major slot-controlled markets such as NYC and Washington D.C. mean that legacy airlines can now argue that there *is* enough competition in those areas. I wouldn’t be surprised if Delta and US Airways wanted to revisit their proposed slot swap deal in the near future.
Finally, there is another airline out there that kind of fits neatly into this mix. An airline that would be as unconventional as a purchase for SWA but which would really be a west coast mirror equivalent of Airtran purchase. Alaska Airlines. If SWA is willing to take on integrating an LCC carrier like Airtran, it could take on integrating a sub-legacy carrier such as Alaska Airlines. Especially one with a fleet type that remains compatible with SWA but which offers even more potential since Alaska Airlines operates a broad range of the 737 family. Such a purchase gives SWA a strong presence in all of the regions in the United States and an opportunity to see how a regional airline (Horizon Airlines) works using a very cost effective type: the The Dash 8 / Q400.
September 28, 2010 on 1:00 am | In Airline News | 1 Comment
If nothing else, mergers today give me an opportunity to come up with monikers for them. While the merger between Southwest Airlines and Airtran is being described as an acquisition, it is a merger with the Southwest brand surviving. And this is a pretty big bite for Southwest.
Southwest has made purchases before but never one nearly so big. Airtran is a pretty big airline and pretty successful too. Let’s take a look at the questions we all have.
The Boeing 717: I think SWA will keep this in fleet for a while anyway. The airplane works well within the Airtran model and I think SWA has been searching for a smaller aircraft it could operate for a while now. The 737-500 never really worked that well for them and the -600 just had too high operating costs to be worthy. This aircraft gives SWA an opportunity to play with their mix a bit more and its easy to integrate into scheduling because there are enough for a pilot base and it doesn’t change their flight attendant mix on other aircraft. I think this aircraft will stick around for a while and I think that if SWA does get rid of them eventually, we’ll continue to see a smaller aircraft in the SWA fleet a la the 717.
Flying from DFW. CEO Gary Kelly says the Wright Amendment prohibits them from flying from DFW and so the integrated airline will cease DFW operations. I can find nothing that prohibits SWA from flying from both airports and if Airtran departs DFW, this is going to be a pretty big blow to consumers in the area. Airtran provided so much needed competition on some routes from DFW and if those go away, I think we’ll see fares from American Airlines rise astronomically. DFW needs to explore this with these two airlines.
Union integration: I think this is going to be a bit tricky. On the whole, the SWA pilot and flight attendant contracts are much better than the corresponding contracts at Airtran. If the SWA unions are willing to integrate somewhat fairly, perhaps this won’t be too much of a problem. I think those unions will be a bit fussy about bringing over the Airtran crews and I wouldn’t be surprised to see them try to simply “staple” the Airtran lists to the bottom of the SWA seniority lists. Gary Kelly needs to do more on behalf of Airtran employees in this area and perhaps he will.
Milwaukee: I think we see routes shrink in this city and fares go up. Airtran won over Milwaukee and that wasn’t easy to do. I don’t know if Southwest will succeed as well as Airtran in that market and suddenly I wonder if Frontier doesn’t have an opportunity in this city. They know how to hold their own with SWA.
Management teams: Expect to see a few Airtran executives move over to SWA. Expect most to depart. Southwest is a pretty insular company but even more so when it comes to its executive corps. I wouldn’t be surprised if some Airtran executives are working on their “flare” this morning.
International flying: I think Southwest will maintain the existing Airtran international routes and I think they’ll awkwardly explore ways to expand it in the distant future. To withdraw it all at this point would be a big loss.
Airtran’s Business Class: Say Buh-Bye. Southwest will dump this product quickly. Southwest never sees the value of business class and I think this will potentially be a mistake. Airtran’s business class is pretty nice and very attractively priced. Retaining it even if just for some markets might not be a bad idea. Think NYC – Washington, D.C. here.
I think this merger will happen and I think it will ultimately result in a stronger airline. However, I think it will also be very awkardly executed. SWA does things its own way and always has. It always stubbornly clings to its own methods and madness and that works pretty well for them. However, they are a big boy airline now and it wouldn’t hurt to start looking a little more closely at how their fellow competitors are doing things. I’m not suggesting change for the sake of change. I’m suggesting that Airtran figured out how to do pretty well with products that are pretty different from SWA. Others have too. It’s worth looking at the other guy’s success before you throw out the bathwater.
Sadly, I think SWA won’t do this and I think SWA will have some labor problems and I think this will take longer and be more awkward than it has to. I do think SWA is every bit capable of losing some of the advantages that buying Airtran brings. Like losing a reservations system that knows how to do things like codeshares and international flights. This is a risky deal for SWA. One they can conclude and profit from but I think this will be harder to do than many seem to.
September 27, 2010 on 8:25 am | In Airline News | No Comments
Southwest Airlines has announced a tentative merger/purchase agreement to buy Airtran Airlines for $1.4 billion today and, yes, I was completely surprised. It’s a bold move and offers SWA huge access to Atlanta and competition Delta Airlines (who I imagine has already opened up the desk drawer and taken a swig of antacid this morning). It offers more access to the NYC and Washington DC areas, too. And it brings that international experience to the table as well.
As much as this is about growth and access to new markets, it’s also about eliminating some damaging competition in other markets. SWA and Airtran are already beating each other up in the North East and in Milwaukee. It was soon to be only a matter of time before the bumped heads elsewhere too. This is as much about Southwest elimating that distraction and allowing it to focus on competing with the SuperLegacy airlines. More tomorrow.
September 21, 2010 on 4:08 pm | In Airline News | No Comments
There is a rumour that Sun Country Airlines may be in play for being purchased / merged with another airline. Candidates suggested are Delta, Airtran and Southwest Airlines.
Delta? Never gonna happen. They don’t need Sun Country and they don’t need the regulatory headaches that a Sun Country purchase offers.
Airtran? Kind of doubt it. Airtran has been avoiding direct competition with legacies lately and they’ve got that area of the country covered with their operations in Milwaukee. In addition, Aitran isn’t a 737-800 operator and doens’t need that headache at present.
Southwest? Now that’s a marriage. One that I suggested at the New Year in this post. Mind you, I don’t think it will be for the weekly flights to London. The fleet is compatible and despite concerns over it being entire leased, it’s a good fit and allows SWA to start 737-800 ops just that much sooner and on routes that are that much more lucrative.
It also offers MSP gates and more opportunities to fly more places. In fact, it offers just the right kind of opportunities: international flying. Southwest Airlines recognizes that international flying is something that they need to consider. However, it involves an area of expertise that just isn’t at SWA and within their business model.
Sun Country offers that ready-made expertise and to a variety of destinations. With that experience, SWA suddenly has the ability to go to Mexico and Canada which are already a part of its codeshare work (and where is that codeshare with Volaris, by the way?). But the experience in the backend, reservations, visas, handling foreign currency, etc. is all offered with a Sun Country purchase.
It’s a ready made solution for growth but it has one risk. Union agreements. And Sun Country has a lof of employees who feel that Sun Country was never given an unfettered opportunity to grow. Whether that’s true or not, it’s an obstacle. If SWA can convince its unions to offer senior merging on a date of hire basis, it might work. If SWA’s unions insist on a purchase being “stapled” to the back of the seniority list, it’s unlikely it will work.
September 9, 2010 on 1:00 am | In Airline Service, Airports | 3 Comments
There is a reason there is a lot of focus on the near mid-west and east coast when it comes to airlines. That’s where people are. The population density in our eastern half far exceeds that of our western half. Even LCC carriers “get it” and if you think otherwise, look at the focus of jetBlue, Airtran and Southwest Airlines.
But I think the opportunity of the west and mid-west is getting ignored. All one has to do is take a look at routes flown from the DFW, Houston, Kansas City, Salt Lake City and, yes, Las Vegas area and wonder at the possibilities. Yes, the flights are a bit longer in length and time but they also fly in and out of airports that are far less congested and far less affected by weather.
Southwest ignores routes from DFW while it waits to fly unrestricted from Love Field in 2014 and I think that is a mistake. jetBlue has ignored the Dallas market despite the fact that it connects an amazing number of people to areas where it already has a strength: the east coast and west coast.
Airtran has game in the east and even in the upper-Midwest now but it has ignored the west so far and that puzzles me. It’s an airline that is clearly ready to go to the next level and be a real national player. Frontier is playing some in the west via Denver but take a look at the fares it is charging on those western routes. I think Frontier is more vulnerable than it thinks.
More importantly, I don’t think there has been the same LCC stimulus in many western markets that we’ve seen elsewhere. Many LCC’s operating routes in the west seem to have come to some tacit agreement with legacy airlines on competition. With the exception of the west coast, we don’t see much LCC stimulus going on past 150 miles east of the west coast.
There is opportunity there and the airline that figures out how to build a better network there is potentially set to earn a great deal of money. Sure, Southwest is out there and they do have pretty good coverage but even they could stand a little competition these days. At least outside of California and Arizona.
September 4, 2010 on 1:00 am | In Airline News | 1 Comment
In an interview with TheStreet.Com, jetBlue CEO Dave Barger says that jetBlue has earned the right to grow. His justification for that comes from jetBlue having positive cash flow, steady earnings and it’s contrarian nature that has lead to success at difficult airports.
Personally, I think all airlines have a “right” to grow. I just think they have to make a busines case for it and as far as I’m concerned, have at it.
I think this signals something else. Here is an LCC announcing its attention to grow in almost insolent manner. In particular, Barger declares their intentions at Washington Reagan National and fails to mention that his opportunity for growth there comes from a partnership with American Airlines that included a slot swap.
But this is somewhat classical behaviour on the part of LCC’s. They see revenue opportunities on routes that legacy airlines are only, at best, barely managing to cling to and the LCC’s want to earn that money. Their costs are lower and they can handle going in at a lower fare and capturing the business. The only tool a legacy has to use to fight off that competition when that happens is adding frequency and matching prices for a sustained period. It does work sometimes. From time to time, a legacy airline can fight off an LCC intrusion but it’s hard and it does eat up cash and resources until it’s over.
That was easier to do when there were few LCC’s and they were focusing on peripheral airports and lesser routes. Now we have quite a few LCC carriers and they want in on the big action. That’s why we have Virgin American flying trans-continental routes, jetBlue flying from JFK and Southwest Airlines introducing itself at both La Guardia and now Newark airports.
Can legacy airlines fight these attacts on many more fronts as the airline business recovers in the US? Maybe. At least to some degree. But I suspect they’re going to have to be a bit more choosy on their fights and I think w’re going to see some markets where even SuperLegacy airlines concede, eventually, to LCC intrusion.
Dave Barger and jetBlue are the first to declare their intentions but they won’t be the last. It’s notable that all of the US LCC’s are earning good profits and increasing their revenue base (with the exception of Virgin America who has yet to earn a profit). That makes for a warchest and with their sizes approaching a critical mass, they can afford to take on more and more legacy airlines.
Airtran did it in Atlanta. jetBlue did it at JFK airport, Southwest did it in Denver and now it’s happening at Washington Reagan National. It’s going to happen at more and more airports too.
One alternative defense might be for more and more legacy airlines to strike deals with LCC carriers and offer them some success but access they can control as opposed to an all out fight that results in legacy airlines bleeding red with losses.
Look for more airlines to declare their intentions and justify those intentions with their current earnings and revenue growth.
August 24, 2010 on 1:00 am | In Airline News | No Comments
British air traffic control is warning pilots of a vulture that can apparently fly at heights of 30,000 feet or more. This bird has a 10 foot wing span and supposedly one was encountered by a commercial aircraft at 37,000 feet back in 1974. The bird is an escapee from a breeding program in Britain.
Airtran has decided to be another kind of vulture and raise their bag fees. The increase is $5 more and while it’s cheaper than their home airport rival (or just about any other airline with a bag fee), boo to them. This just strikes me as greedy more than anything else.
Still another kind of vulture has been operating in the airline world as well. The Thief Vulture. Last week, an American Airlines employee was arrested for stealing personal items on aircraft as well as for stealing AA property too. The man was tracked down when police decided to track a stolen cell phone (Palm Pre) which lead them to his house. They then discovered so many stolen items, they filled 3 pallets.
In addition, a TSA screener from Seattle has pled guilty to stealing more than $20,000 worth of items from luggage he was supposed to be screening.
The irritant about these last two vultures is this is exactly what airlines and the TSA deny happening all the time. It does happen and it happens, I think, far more frequently than is ever admitted. I’ve had my own bad encounter with TSA screeners trying to get me to hand over my wallet and then turn away from them. Another friend recently had a few items stolen from his bag without response from the TSA despite the fact that the suitcase in question HAD A TSA APPROVED LOCK ON IT!
These are some of the worst vultures around.
August 20, 2010 on 1:00 am | In Airline Fees, Airline News, Airline Seating | No Comments
American Airlines is introducing a new fee. This time, a fee from $19 to $39 can you get you a seat up front in coach including bulkhead seats and it will allow you “group 1″ boarding.
Personally, I’m all for offering more varied product on aircraft. That’s the one development among “debundling” that I am in favor of. However, please offer me something of real value. Frontier gets it. United gets it. Airtran gets it. Even Southwest Airlines gets it.
AA doesn’t get it. A seat that has no more pitch or other benefits except that it is “up front” and I can potentially board earlier (and sit in an uncomfortable seat longer before take-off) isn’t more value. If the seat comfort isn’t going to change, do I really care if it’s up front or in the back? Well, maybe I do if I’m on a cranky old MD-80. Does it afford me more opportunity for overhead space? No, not really. Despite reports to the contrary, it’s just not that hard to find overhead space. Sure, the bins are more crowded but you can still access them.
If anything, it’s the jokers who put their luggage up front and then take their seat in back that annoy me.
But I’ll gladly pay for more seat pitch and a generally more comfortable seat. I’d gladly pay $20 / segment to gain 2 more inches of pitch alone. And I can already get that on an airline of my choice in most cases. For the prices AA is offering for this “service” you can more often than not get an Airtran business class upgrade. You can get more seat pitch and more service on Frontier. You can get more seat space on jetBlue. Southwest Airlines’ fee for priority boarding affords me a real opportunity to choose one of the best seats in a 737 for a cheaper price and you can bet I’ll have bin space on the SWA flight no matter what since they aren’t fools and charge exorbitant fees for baggage checking.
Perhaps this might have some appeal to a business traveler but I don’t think such a fee is going to be reimbursed as an expense. That certainly wouldn’t fly at my company, a major aerospace and defense firm.
How about a $25 fee that A) gets you a exit aisle seat and B) *guarantees* your checked luggage arrives with you? That might be particularly attractive to AA flyers.
At the end of the day, for any traveler except the most extravagant, it’s money that can be better spent elsewhere. And if you are that extravagant, you’re probably getting an upgrade to first class anyway.