Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.misc From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Air passengers have love affair with Southwest Date: Wed, 11 Nov 92 14:23:38 EST Message-ID: \SE C;MONEY;THE TRAVELER \HD Air passengers have love affair with Southwest \BY David Field \CR THE WASHINGTON TIMES Why can't they have more airlines like this one? Southwest Airlines, based at Love Field in Dallas, is the airline that everyone likes to like and that other airlines want to be like so they, too, can be liked. The little line, listed as "LUV" on the stock market as a sign of investor loyalty, boasts it is first-rate, and, by the few objective measurements around, it is. Transportation Department ratings for flights in September, released last week, gave Southwest its fifth "Triple Crown" victory this year in all three categories: It won first place in on-time performance, the fewest customer complaints and the fewest lost or mishandled bags. When consumer magazines rank airlines, Southwest is almost always No. 1 or No. 2, with the only complaint that it serves only 15 states. How does Southwest do it? Simple. They stay simple. And that's not as easy as it sounds. The airline flies only on short hops, choosing routes that average 55 minutes in the air, mostly between cities in the Southwest (hence its name). Its easternmost points are Nashville, Tenn., and Cleveland and Columbus, Ohio, even though airports throughout the Northeast have begged it to come in. Because Southwest's flights are short, the airline doesn't have to offer much in the way of meals, and because it doesn't have to offer food, it can get its planes back up in the air in record time. The planes, all Boeing 737s, just carry enough sodas, beer, peanuts and cookies to keep 'em happy. It also avoids complicated hassles with a first-come, first-seated approach. Southwest isn't listed in the computer reservations systems owned by the big carriers because it doesn't want to pay the fees they charge and because the people that love to fly it will make their own calls to get to Southwest. But instead of coming across like a cheapskate, Southwest has managed to make itself almost mythical for being fun to fly, largely through the antics and personality of its ebullient, crazy-like-a-fox chairman, Herbert "Herbie" Kelleher, who dresses up in Elvis regalia for pep talks to employees, sometimes tosses bags on the loading ramp and generally shows no shame when it comes to carrying the flag for his carrier. Southwest's costs are lower, not just because of the way the spaghetti untangles in short strands on its route map, but because its employees like working there, boosting productivity. As a result, Southwest has made money in every year except its first two, and in the third quarter this year it made $26.9 million. That's the same three months that cost Delta $107 million and put American $85 million in the red. Other airlines - even sworn enemy and crosstown competitor American Airlines - like Herbie's idea, and most airlines are studying Southwest, says Warren Lieberman of San Francisco-based consultant Arthur D. Little Inc. Robert Crandall, chairman of American, the nation's largest airline, told reporters in the spring that he was studying the Southwest approach; Northwest, the nation's No. 4, is considering creating a Southwest-type operation in California. Even new carriers like Skybus, a Fort Lauderdale, Fla.-based start-up, admit they've borrowed from the inimitable Mr. Kelleher. Even traditionalist Atlanta-based Delta Air Lines is thinking of transforming one of its feeders from a traditional commuter to a Southwest clone, keeping costs down with Southwest's formula of fly 'em frequently but not that far. But "to create from whole cloth the formula that he [Mr. Kelleher] has made work requires elements that just aren't always there," says Doug Abbey, president of AvStat Associates Inc., a Washington consulting firm. "You need a certain geography, certain population density, certain routes, and certainly a certain esprit de corps that's not portable or transferable or easily re-created. It's not that simple." NO WIDER WAR: LBJ used to say that about Vietnam, but when airlines say they want no war this winter, it may be true. For example, fares announced this weekend by Northwest for a sale of up to 35 percent off for travel between 22 cities and all other U.S. destinations served by the airline were not, repeat not, an opening salvo. Northwest has no "intent to have this become a sweeping, nationwide fare war," spokesman Doug Miller says. The cities in the Northwest sale, which the big boys have since matched, include Washington, Baltimore, Richmond and Norfolk, and, for some reason, Little Rock, Ark., although Traveler wonders if many denizens of that state capital aren't looking for one-way tickets. More evidence: A sale started by America West to lure people onto planes on the off-peak days of Thanksgiving week cut many cross-country fares to less than $300 round trip. USAir and many others promptly matched the sale but only on some routes, and the restrictions are still there. The deals that are expected will be for off-peak days during the holidays, called in the trade "shoulder times." "There's less discounting this year than at the same time last year," says Kevin Murphy, the airline stock watcher for Morgan Stanley & Co. And many fares went up by a flat $10 to $60 yesterday on routes that, because they have no nonstop service, require a change at a hub airport. American initiated the increase, the third industry price increase in two months. Dave Swierenga, a sort of think tank for the Air Transport Association, told a meeting of travel industry types that they should not count on any major fare wars in 1993. Still, many are waiting for someone to do something stupid and slash seat prices systemwide, starting the first full fare war since American Airlines tried its now-fading four-tier "Value Pricing" in April. Glen Engel of Goldman Sachs & Co. repeats the old but true maxim of airline economics: "You price as low as your dumbest competitor." He thinks a big fare war may kill a weak line. TWA TRANSFORMATION: One airline that's decided bargain-basement pricing may not be a smart thing is TWA, a carrier that until now has basically been El Cheapo, forcing others to match. In the last month, TWA has fired its most slash-happy executives as part of its change from private control by Carl Icahn to employee-bank ownership. New management was chief among the demands of the unions, who exalted when TWA's top pricing mavens left late last month. "The formula for success is not to drop prices to fill planes," new boss Glenn Zander says in an employee newsletter. CLOSER, MY GATE, TO THEE: Business One is what United Airlines calls its new program to ease full-fare fliers through the skies to its hometown hub of Chicago O'Hare. The plan basically brings its flights to gates that are closer to the airport exits for cabs and connections, cutting airport time, and offers ticket pickup for folks with full-price reservations, and gives free beverages and is offering introductory bonuses for frequent-flier plans and Hertz car rentals. Not to be confused with a Continental program called Business First, where they put bigger seats in the plane, United's B-One is in place at National Airport here, at New York La Guardia, Newark, Philadelphia and Minneapolis-St. Paul. IN BED WITH MARRIOTT: Bethesda-based Marriott says Delta Air Lines has joined in its frequent-travel program. All members of Marriott's Honored Guest Awards earn a 25 percent bonus on points per stay when they fly Delta. Delta tickets will also be available for redemption with Marriott points. Courtyard by Marriott, Fairfield Inn and Residence Inn hotels aren't in the offer. This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM