Also, from an operations perspective, Southwest has slated an average amount of time for its flight with 2 hours and 10 minutes to 2 hours and 30 minutes eastbound.  Westbound they’ve blocked 2 hrs 20 minutes to 3 hours and 0 minutes.  The hour flight is for the 5:30 PM westbound departure.  That gives them plenty of time to remain on schedule.

Most importantly, Reed examines on Southwest’s “no fee” strategy:

Despite all the changes, Southwest is today locked into a defiant effort to differentiate itself through a heavily promoted advertising campaign, focused on its “no hidden fees” strategy. This strategy is fraught with risk. The primary one is that while airline passengers seem to enjoy complaining about fees, evidence is scant that they book away from airlines who charge them.

Gary Kelly, Southwest’s CEO, is standing behind the strategy for now but said, “Time will tell if that translates into more money and more customers for Southwest Airlines. And it has to. If it doesn’t, we probably will have to change that.”

Southwest’s primary “no fee” advantage has been around for a long time.  It is the ability to change flights and cancel flights without any penalty.  You do need to pay the increase in fare but you don’t lose $150 on non-refundable tickets as you do with almost every other airline.  Add in the baggage fee and other fees and Southwest is much better of the consumer.  Now, there is a huge education barrier.  Most of the general public doesn’t follow the industry close enough to change purchasing behavior.  And, for business travelers, the frequent flier and business perks still are not enough to compete with traditional programs.

As for Southwest’s operational ability in the delay-plauged LGA, I don’t see why they can’t handle it.  They are good at what they do and can turn in a plane in under 20 minutes if they need to.  LGA is small and although is clogged, the taxi times (back to the gate) are not that long.  So, they just need to build an extra hour into the schedule and I can see them performing. 

So, oil is back up and airline stocks are back down.  But, the last three days show a interesting picutre.  As noted, I’d argue the overall health of our nations’ airlines are far more dependent on the ability for businesses and consumers to purchase tickets, rather than a $10 fluctuation in the ever-volatile oil market.  But, the chart below would lead you to believe otherwise.  The bottom three lines are the three major indexes.

So, take AMR.  It is outperforming the major indexes by about 20 points this week.  Go figure.

“‘No more remembering to hit the cash machine before boarding your flight!’”

“You can check your first two bags for free, there are no change fees, no fees for a window or aisle seat, and, as always, snacks, sodas, and smiles are all complimentary!”

Anyways, good news for those who don’t carry cash on them.

On another note, you’ll be seeing an increasing number of posts on Southwest for a couple reasons.  One, increasing fees on other airlines will make them a far better deal on many routes.  Two, the recent change of assigining spots in lines rather than the “free-for-all” method have eliminated the need to stand in an unncecesary line for 45 minutes before the flight.

1. Allegiant posted a ridiclious 95% load factor for July up from 91% year over year. That is a crazy number. The stock is up 14% up over the past week, jumping 11% today.

2. You might be seeing this headline out there: Traffic rises at AirTran, falls at Southwest. So you get the gist of it. However, I find the crucial number in this report to be Southwest’s load factor which dropped 5.1 percentage points year over year, as LUV’s capacity went up and it carried less passengers. Hey, they are paying below market value on fuel, but it is something to keep an eye on.

Others have noted United’s decree to return to the Saturday night stay. Now it appears they are also betting on peak travel days. With the hubub over Southwest’s opening of its fall and winter schedule, I did a quick check on two markets for the Thanksgiving weekend. United has closed all low inventory for the November 30th travel date. I picked two United markets. NYC-CHI which has plenty of competition. And also PIT-CHI which has far less competition. See below:

United is priced at least 50% above the competition in both these markets.

So, two takeaways:

1. Jump on the competitor fares right now.
2. United is not afraid to be agressive. They are making a play to actually cover costs.

But, the speech’s emphasis, the article notes, was about treating people well — both the Southwest employee and customer. Personally, sometimes I find the “cheer” a bit over the top, but these days Southwest is one of the few places you will find people smiling. Setting aside financials and route structure, the comparison really tells you why Southwest is on its way up and US Airways is stuck at the bottom. While waiting for my 3rd US Airways flight of the day to be cancelled earlier this week, I overheard another gate agent announce that, due to a computer glitch, they were going to board alphabetically. Apparently, a passenger or two made a joke about it and it was only a matter of seconds before the gate agent was back on the microphone berating the passengers for improper behavior. It was really quite shocking.

I’m sure the Republic Airways employees that were actually flying the plane were cheerful, but I doubt anyone on that plane got beyond the behavior of the US Airways gate agent. These days the stock prices on the Yahoo chart to the right react solely on the rise and fall of crude oil. But, it is important to remember that, once this all settles down, there are factors, such as service, that do matter.