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A major domestic airline that provides point-to-point, low-fare service.
They will most likely underperform since they will have to reformat their buisness model from the acquisition of AirTran. Three things come into play for Southwest, Lack of diversity of income generation,Labor, and Passenger Service. All three can be one too many hurdles for the airline to take on. Other major carriers do not just rely on domestic passenger service alone but on International markets and cargo. This definitely helps spread risk and brings in new income streams and opportunities. Southwest relies to heavily on just passengers, their planes can not support heavy loads of cargo since they are all 737's and 717's. They also can not compete internationally unless the find ways of making a 737 and 717 go across the Atlantic and the Pacific. Finally their fuel hedging practice will probably not be as generous as in years past making diversity that much harder with fuel expense on the rise.They are gaining new markets, but a lot of travelers that are used to AirTran will probably make a shift to other airlines most likely being businessmen. Businessmen are repeat customers that are not going to have the same privileges as they once did with AirTran since Southwest will be reconfiguring their airplanes and doing away with business class.Labor will also be another issue especially AirTran's non-unions and the their Pilots getting a new contract that is more generous then what they are used to. Poor diversity in revenue streams (not enough cargo and no international markets), labor costs (unions and pilot contracts), and passenger service (that makes some feel like cattle being driven into an airplane during boarding without the luxury of cheap AirTran business class seats ) will make for some interesting buisness dynamics for this company to overcome and AirTran passengers will need to get used to.
I hear you on the Airtran conversion issues but you just threw the word Diversity at me which in my book is hogwash. "Lack of Diversity of Income Generation"??? So you're saying the problem is that they get all their money from one place? Which is... people who don't like spending $a gazillion (yes that is a technical term) just to get from point A to point B. I strongly disagree with your point about passenger service. From my experience southwest passenger service is infinitely better than that of other airlines. I literally dread flying other airlines because I'm so afraid of how god-awful the passenger service is. I'm gladly willing to wait in line for a couple minutes to board the plane if it means 1. that I can sit where i want and 2. that I don't have to deal with Mr. and Mrs. Grouch when I get board.You totally lost me with the labor argument, it sounded like there was a problem because the pilots are going to be getting a contract "more generous then[*than] what they are used to"? which is a problem because... they'll be happy? or because it'll cost too much?If I had to choose between flying southwest and any other airline I'd choose southwest.
I should add that they do a nice bit of cargo business.
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