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Originally Posted by jimworcs
Phx,
I made the point, it was a crude measure and for a true comparison, you had to also compare revenue per passenger mile. This irons out the differences between puddle jumpers and long haul.
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No sir, it does not. You cannot compare RASM of a carrier with both long-haul international and domestic routes with another airline which only operates a single aircraft type (Southwest only operates 737s) only on domestic routes. The cost structure is completely different and that is reflected in the fares and also the profit margins.
Quote:
Originally Posted by jimworcs
I think you will find even on this measure LCC's are much lower than legacies. It is harder to find because airlines don't always publish RPM's in a comparible manner, but I will do a bit of research on the Continental vs Southwest figures.
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It's in the financial reports and the formulas for arriving at those numbers is pretty standard industry-wide. However you are still trying to compare apples to oranges. You can't win this one, Jim, no matter how many numbers you throw out there to prove your point. There is just no way you can compare two airlines like Southwest and Continental. If you were comparing Southwest with, say, Virgin America or JetBlue (even though they fly to the Caribbean and South America) then fine. To compare Continental and Southwest you'd have to find a way to factor out all but domestic service on Continental and then compare.
Quote:
Originally Posted by jimworcs
The gap may have narrowed a bit, but there remain very significant differences. The legacies have structural costs associated with the hub and spoke model which cannot be driven out without fundamental changes to the model. For example, because they depend on large numbers of passengers who are connecting, if a segment is uneconomic, it is difficult to drop it, because the hub is a monster which has to be fed with high numbers of connecting passengers. Most LCC's operate point to point, so are able to drop or consolidate flights much more quickly.
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While that is still true about Southwest to some extent it too has become so large that while still operating point-to-point a lot of it's operations resemble the legacy hub-and-spoke model.
Quote:
Originally Posted by jimworcs
It is a battle which will go on... the legacies have had to cut costs viciously to try to compete, but there are limits to their power to cut without causing damage to their basic economic model.
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Which is why they have gone overboard with the fees.