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SOUTHWEST: Considers 2nd Type of Aircraft
Associated Press
DALLAS - Southwest Airlines, which owes part of its success to its use of a single type of jet, the Boeing 737, is considering adding a new plane to its fleet for the first time in its 33-year history. Southwest has considered adding 50- and 70-seat regional jets to its fleet but always balked because they couldn't carry enough customers to bring the cost per passenger low enough. That might change with the 100-seat Embraer 190, says chief executive James F. Parker. He adds, however, that a decision to change the fleet is still far in the future. "We are very happy operating a single aircraft type with the 737," Parker said, but the larger regional jet is "a new technological feature or aspect of our industry that I think we need to take a look at." Parker added that "We are a long way from making a decision, and I can assure you we would make a decision to walk away from the advantages we have of operating a single aircraft type only with a great deal of reluctance." Parker made the comments Wednesday to analysts in New York. In trading Thursday on the New York Stock Exchange, Southwest shares rose 2 cents to $18.84. A change in the makeup of Southwest's fleet would go to the core of the airline's business model. Dallas-based Southwest, the only major U.S. carrier to remain profitable through the industry slump since 2001, enjoys lower costs per passenger than rivals such as American, United, Delta and Continental. Part of that cost advantage stems from Southwest's exclusive use of the Boeing 737 in its 385-plane fleet. Southwest doesn't need to stock parts for other jets, and mechanics need be schooled only in the workings of one aircraft. The workers' familiarity with the Boeing 737 helps Southwest turn around incoming planes and get started on the next flight in an average of 25 minutes, the best record among major U.S. carriers. The 737 is ideal for Southwest's heavy schedule of short and medium trips - 80 percent of its flights are 90 minutes or shorter. The latest version of the plane, the 737-700, has more power and gets better mileage and is used on longer flights, including transcontinental routes. JetBlue Airways has already ordered 100 Embraer 190s and has options for 100 more from the Brazilian manufacturer. Betsy Snyder, an analyst with Standard & Poor's, said JetBlue's costs for operating the Embraer is similar to its Airbus A320s, indicating that the Embraer could be a "very plausible" addition to Southwest's fleet. "They're not going to do anything to jeopardize their cost structure or their balance sheet or their earnings," she said. While it mulls the possibility of buying Embraer jets, Southwest will continue to buy planes from Chicago-based Boeing. It expects to take delivery of four new 737s in the current quarter and 47 next year. Those new planes will let Southwest add service in Philadelphia next May, increase capacity by 7 percent next year and replace 24 planes scheduled for retirement by early 2005. Many of those retiring planes are older Boeing 727-200s, and Parker had a quick answer when an analyst asked whether the airline could bring them back if travel increased. When those 737-200s are retired, Parker replied, "the most likely way they will be brought back will be as containers for the Miller Lite cans on our aircraft." http://www.sunherald.com/mld/sunhera...ss/7253409.htm |
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SOUTHWEST: Considers 2nd Type of Aircraft
None wrote:
Southwest has considered adding 50- and 70-seat regional jets to its fleet but always balked because they couldn't carry enough customers to bring the cost per passenger low enough. Which is most interesting reality that the larger airlines haven't quite grasped yet. The only reason regional jets have caught on is because the big airlines were able to pin off a low cost "regional airlines" that was allowed to fly those, and even though the operating cost per pax is higher, they were able to hire el-cheapo pilots instead of their very expensive mainline pilots. "We are very happy operating a single aircraft type with the 737," Parker said, but the larger regional jet is "a new technological feature or aspect of our industry that I think we need to take a look at." Bull ****. The real reason is that with a single plane type, Southwest has pretty well reached its limit on viable destinations. They will need other plane types to reach new destinations. And this is the exact same argument used by Jetblue when it ordered its jungle jets. The workers' familiarity with the Boeing 737 helps Southwest turn around incoming planes and get started on the next flight in an average of 25 minutes, the best record among major U.S. carriers. I don't buy that argument at all. Plane turn around is a question of schedule, planning and staff flexibility. Since both the 737 and jungle jets have loose baggage compartments, it doesn't really make much of a difference. If some of its jets were containerized and some were loose luggage, then it would make a difference. The big advantage of having single fleet is that the pilot pay structure, scheduling and eniority issues make it a much more efficient system. When you fire the pilot with least seniority, you don't need to retrain all pilots with more seniority who get displaced ontothe next lower plane type. In terms of maintenance, I am not so sure that Southwest really has that big of an edge. Are the 737 of various flavours really so compatible with each other ? I find it hard to believe that a 737-200 would be the same as a 737-700 in terms of maintenance and spare parts. Betsy Snyder, an analyst with Standard & Poor's, said JetBlue's costs for operating the Embraer is similar to its Airbus A320s, indicating that the Embraer could be a "very plausible" addition to Southwest's fleet. The Jetblue president, shortly after announcing that order was interviewed on the USA PBS program "Charlie Rose". He was very specific in that the smaller jets are in no way as cost effective as their A320s, but that they would still be profitable and allow JetBlue to continue to grow. Now, for jetblue, there is a bigger difference between the A320 and jungle jet than there would be for Southwest and the same jungle jet since A320s are bigger. But for Southwest, they may be forced into it since if they don't start to open up the thinner routes to smaller towns, Jetblue and others will and Southwest may no longer be seen as the leading airline because it will have stopped growing. The big question will be how both these airlines treat Jungle jet pilots versus the bigger plane pilots. They may end up over time with problems similar to the bigger airlines (but perhaps not to the same extent) in terms of pilot seniority, and who gets bumped first when layoffs are necessary. |
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SOUTHWEST: Considers 2nd Type of Aircraft
On Sat, 15 Nov 2003 17:56:59 -0500, Furry Raccoon
wrote: Cut to save space... The big question will be how both these airlines treat Jungle jet pilots versus the bigger plane pilots. They may end up over time with problems similar to the bigger airlines (but perhaps not to the same extent) in terms of pilot seniority, and who gets bumped first when layoffs are necessary. "Jungle Jets"...??? Thanks, H Retired Teacher, Terrible Mechanic, Worse Plumber! LPFM Page: http://home.att.net/~optcamel/fmradio.htm |
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