Comments on: Is Southwest Airlines model the future for full-service airlines?

By: Jim

Jim — Fri, 26 Aug 2011 14:56:00 +0000

As a consumer I love Southwest Airlines for their two bags checked free policy and not hidden fees, charges, or gotcha’s like other airlines have. They are foremost consumer/customer oriented in providing a quality service that will make you want to fly again with them. I stopped flying Delta and United because of their extra fees and gothcha’s at the last minute. Full service, not yet, not compared to the old days of the 1960′s when they gave you real metal utensils and served out meals but for today’s traveler on a short 1 to 4 hour flight SWA is the best. Airlines might take a look at SWA and become more customer friendly and then they may see ridership improve.

By: Dietmar Kirchner

Dietmar Kirchner — Wed, 15 Apr 2009 05:04:04 +0000

Walter,
the government control on our industry is mainly on the technical and operational quality side, which is necessary, given the cost of failure. There is similar public supervision when it comes to car or building safety. We would all be better off if the SEC would have provided the same oversight over the financial industry.
Maintaining a high level of staff professionalism is in the airlines’ own interest, as even diruptions with no safety related consequences cost a lot of money. Yet, this does not constitue a reason for the government to look after frequencies, fares, or service features.
The reluctance of many major airlines to really care about their brand is the reason for the “commodization” of air travel. On http://simpliflying.com/ you can read a traveler’s experience comparing old Delta with new Virgin USA. It is bitter to read that Virgin’s US competitors try everything to keep that superior competitor out of the market. Carriers like Southwest, JetBlue and Virgin USA run very simple business models, but are able to delight their customers with reliable service, helpful and professional staff, and innovative service features. And they are in better financial shape than most of the large carriers.
The erosion of services to many smaller cities does not cry for re-regulation. It was Southwest in the USA and Ryanair in Europe that opened most of the new destiantions and brought B737 service to places formerly served with small prop airplanes. Maybe high speed trains (like in Europe or Japan) could be a better way of serving smaller cities and improve the national transportation system.

By: Dietmar Kirchner

Dietmar Kirchner — Wed, 15 Apr 2009 05:03:42 +0000

e: Walter’s comment,
I disagree. Basically in a market economy companies have to succeed in a competitition by offering better products and make money with them.Most airlines (even outside the USA) live in those environments. And even within the USA Southwest would not exist and be profitable in a regulated world (nobody would have given them route licences to start with).
Other businesses in the travel industry with high capacity cost and load-factor driven profits (hotels, rental car companies) successfully handle the yield management problem.
There is no modern business competition in a regulated market (who decides better on fares, on market access, on service levels than the market itself?). Also salaries are driven by market forces.If airlines pay too little, they will not get anyqualified staff. Even Southwest pays decent salaries to get a motivated workforce.
Safety is the major issue of our industry, but I see no correlation of safety maintenance or crew related accidents and the type of airline. Outsourcing heavy maintenance to FAA approved agencies around the world might make sense, but would not affect line maintenance.
So: If you do not succeed in competition, you have to improve, but you should not change the rules of the competition.

By: Steven Eberly

Steven Eberly — Tue, 14 Apr 2009 14:07:54 +0000

Dietmar,

While I can agree with you that the business models of the major airlines in the US is seriously flawed in comparison with other service oriented industries, one must keep in mind that the aviation industry is still very highly government controlled. While a hotel can simply go out and hire an employee with zero experience and put them to work right away, airlines are faced with many, many regulatory training requirements for nearly all of its front-line employees. In these days of industry contraction, those types of costs can make a very large difference in ongoing operations costs. An airline can’t just lay off employees for a few lean months and pick them up again a few months later, they must be re-trained and re-qual’d.

When was the last time you read an article on a major news outlet that talked about the mis-connects (wrong room, or keys that don’t work) and delays (Wiating for a hotel van at the airport?) of hotels? Aircraft engine fires vs. hotel fires?
Aviation interests are required to train their employees and report all kinds of metrics to, and by the government…and it isn’t free. These types of costs are easily covered in good times, but in times like these, pose a nearly insurmountable problem for yield management.

By the way, there is no such thing as competition in air service anymore. The lowest fare wins, regardless of the amenities in most cases. This does not foster service competition, only cost competition, and when a product is only differentiated by cost, the industry will inevitably drive itself to the lowest cost/value level. The only way to keep this downward spiral from decimating our country’s aviation industry further is to regulate the price and service levels again.

As an airline pilot, I can easily see the erosion of service to many communities, and to the industry as a whole. If this contraction and reduction in services is a comfortable option for America, then so be it, but I always thought the idea was to improve and expand our national transportation system….was I wrong?

By: Steven Eberly

Steven Eberly — Tue, 14 Apr 2009 14:07:25 +0000

Walter,

Sadly…correct.

By: Cyriel Kronenburg

Cyriel Kronenburg — Thu, 09 Apr 2009 07:24:55 +0000

Personally I don’t think the Southwest model would be sustainable if all carriers would do the same. Picking and choosing only profitable routes and vacating the hub and spoke model would leave many airports in the world without service.

The current airline model works fine, as long as Governments would stop making commercial passengers subsidize other forms of transportation and stop crazy barriers on airlines to operate in a liberalized environment.

By: Jonathan Baker

Jonathan Baker — Thu, 09 Apr 2009 07:24:02 +0000

As a former airline pilot, I can assure you that happy employees are the key. For a plethora of reasons, Southwest will continue to rank among the top airlines in the world, and without a doubt one of the top airlines in the United States. Read the book “Nuts” and it will provide you with the many reasons Southwest has always been able to succeed.

By: Walter White

Walter White — Thu, 09 Apr 2009 07:03:13 +0000

The answer is Regulation. The deregulated business model for airlines has not worked. It has created a business full of enormous debt, low-paid employees with little to no benefits, and cramped miserable flying experiences for the most part. Japan and other countries with strict airline regulation have airlines that invest in new aircraft and systems, provide excellent jobs and excellent flying experiences. Yes, the price for the customer will increase. However, they will be paying for a safe, reliable, comfortable flight. Deregulation has taught American air travelers to think air travel should be cheap and painful. There is also the ongoing insane fare structures that have a leisure passenger paying $99 for a flight that is sitting next to a business passenger paying $800+ for the same flight. No matter how many times the major carriers have said they would simplify their fare structure – they have always gone back to this inane business-passenger gouging practice. Then they wonder why their business customers leave for low-fare carriers. Ultimately this should be about safety. Safety will only be ensured with well-paid, experienced, happy employees running the airline. Regulation combined with modern business competition will ensure this happens. How many customers realize that their Regional Jet crews are making less than their city bus drivers? Pretty much anyone working for a US Regional airline has to live with their parents in order to survive on those wages. Don’t even get me started on out-sourced maintenance work to Central America! It’s time to re-regulate the US airline industry!

By: Steven Eberly

Steven Eberly — Thu, 09 Apr 2009 07:02:28 +0000

Simply put, full-sevice airlines have undercut themselves into a corner. They still like to differentiate themselves from low-cost rivals by insinuating a higher level of service, but cannot afford to follow through. The the truth is that there are no longer ANY full-service airlines in the US. There are large and small airlines, but service tends to look the same once on the plane.

About the only service difference is in the reservations area. The ability to get to a destination reliably is higher at a major “full-service” airline, only because of their extensive network and spare aircraft availability. Southwest might be the exception to this, as a low-cost rival, but even they have some difficulty in this area due to the tight scheduling of aircraft.

I expect that as airlines trim their capacity across the board, the majors will gain their second wind and begin competing again on a service based platform. When that does happen, ticket prices will be much higher in comparison with today’s prices, and they should be. Competition should be healthy, not debilitating. If the airline industry does not take the proper steps to maintain a healthy balance, perhaps the govt. should consider regulating them again as they did before the 80′s.

By: Dietmar Kirchner

Dietmar Kirchner — Thu, 09 Apr 2009 06:59:08 +0000

As we can see in the present economic crisis, even business people are able to fly in lesser-sercice classes. Airlines like Southwest or JetBlue sell pure, but effecient and decent tarnsportation. At JetBlue you can even buy meals in case you are hungry. The complexity of offering full service craetes cost that is hard to recover these days on the fare side.
Even in the most expensive hotels you usually pay for drinks, movie channels, and meals. So why do airlines catering for the same people have to give those services away for free?