[ Tuesday ]
Economics 101
Has anyone at the major airlines ever heard of
supply and demand? I mention this again, because Southwest Airlines reported a profit for the most recent quarter, a feat they have now accomplished for 48 consecutive quarters. They literally fly in the face of the majors, and have continually beat them in providing acceptable levels of service at fair pricing.
Southwest Airlines (SWA) succeeds where the others fail for several important reasons. SWA flys Boeing 737s because they are relatively fuel efficient, and SWA has structured their route system around the range of the aircraft. This also keeps SWA's maintenance costs lower than the others, since only one type of aircraft is utilized.
SWA does something else that has endeared them to their customers...they have consistently finished at or near the top of the 'Triple Crown' award standings, with Best On-Time Record, Fewest Passenger Complaints, and Best Baggage Handling. SWA has been very innovative within the airline industry, introducing self-ticketing machines in 1979, and ticketless travel in 1994.
The flying public apparently has given an ultimatum to the major air carriers...straighten up and fly right. While not everyone can fly carriers such as Southwest or Jet Blue, many potential passengers have reviewed their travel options during the past few years and have said 'No' to American, Delta, and United. Witness the huge losses these carriers have experienced, while carriers such as Southwest have prospered.
It may be wise for these companies to 'occasionally' look at some old college economics text books. Focus groups might also help. Taxpayers, I presume, do not want to subsidize these companies, or any others for that matter, for their inefficiencies.
MM [11:56]
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