Quote:
Originally Posted by percysunshine
Chuckle... SW Airlines is a highly profitable non-union shop. Big target for bad publicity.
|
And also the one that has had the least need for government aid and protection to avoid bankruptcy. While all the "major airlines" were struggling to avoid bankruptcy due to economic downturns, due to higher fuel prices, or due to increased competition, Southwest has thrived. In fact, Southwest's biggest obstacles has been the regulations that have restricted their ability to take over business from the majors, restrictions that the majors lobbied government hard to sustain.
One might view airline deregulation with a bit of irony, given the role that Ted Kennedy played early on and then Carter, who signed the landmark act, which has resulted in the bankruptcy of nearly every major airline, the disappearance of the airlines that most defined commercial flight, and the bankruptcy of over a hundred small airlines.
And it isn't clear that the deregulation and its "creative destruction" actually cut fares as much as mythology suggests. Southwest is the most successful of those that deliver transport from point A to point B as a commodity. The majors have merely employed more complex yeild management strategies to obtain the maximum price from the maximum number, by charging multiple prices for the exact same service. Has the deregulation really resulted in significantly lower fares.
If before deregulation an airline carried 10 passengers for $100 each and ten empty seats, and now carries 3 for $130 each, 10 for $100 each, and 7 for $10 each, for an average of $68 and because of the extra costs of twice the number of passegers has a lower profit which might result in a loss, is the price really 30% lower? If the ten passengers who flew before end up being the ones who pay $120 (3) and $90 (7), then they pay an average of $102, paying more while suffering worse service.
The major airlines have pursued a strategy that is like a McDonalds charging Warren Buffett $1000, and 3 of the 50 homeless people a dime, for their Big Macs.