Things in the Sky

Well, for one reason or another, the geek test yesterday got a heck of a lot of hits. I’m not complaining. But I noticed one big thing – the “other airline’s” aircraft! As you can see here, the rampers line up alongside an AirTran 717:

But then, for the shot from inside said plane, the engines magically move from the tail to under the wing!

Friends of mine noticed other things – my friend Jay noticed that a 737-700 was initially behind the rampers, and then they’re in front of a 737-300. Also, my friend Steve noticed that the rampers weren’t wearing any badges.

Really, not a big deal. But just a thing that bothers airplane geeks. Maybe Southwest could hire me to consult for future ads?

Well, Southwest continues to be a aggressive in Denver with its promotions. After giving out free roundtrips for Business Select tickets out of the city, Southwest is now offering faster access to it’s still-new elite level, A-List, for Colorado residents. While sixteen roundtrips are required to earn the status, Southwest is now giving out the status for only four roundtrips.

But, one should note that one has a full year to make those sixteen roundtrips, while one must book and fly the four roundtrips in a three-month period, or one quarter. So Southwest is doing some simple math here and hoping that such passengers would be doing about sixteen roundtrips a year anyway, so this promotion just makes them A-Listers faster.

So clearly Southwest is aiming at Frontier and United’s elites here. But is it worth it for those elites to make the switch? I’m not sure. Those elites already get two free bags, so that part of Southwest’s campaign doesn’t do much. No change fees on Southwest is certainly nice, though. The A-List benefits of priority check-in, security, and boarding are the same as the other airlines’ programs.

Plus, I think Frontier’s and United’s perks are a bit nicer than Southwest’s, to be honest. Frontier and United’s elites get a shot at more legroom with STRETCH and Economy Plus, respectively, and also earn a mileage bonus once they’re elite. Also, Ascent and Summit members on Frontier get free DirecTV, while United miles are very valuable as they can be used across the Star Alliance.

This one could end up being a win for Frontier and United fliers, though. Last time Southwest unveiled a Denver promotion the two carriers quickly responded with offers of their own, so we’ll have to see if something similar occurs this time.

More details can be found here: southwest.com/denveralist.

Yes, two Southwest posts in one day. Sorry.

Last week, the airline announced its brand new iPhone app, which has actually been around since December, but there was no press release on the subject until last week. My guess is that Southwest wanted to launch it quietly and see if there were any bugs before publicizing it.

Anyway, the features of the app aren’t actually all that different compared to Southwest’s current mobile website, except for the DING! feature. But even though most of the features aren’t new – this is still a good move. Eliminating the need to surf to mobile.southwest.com makes for an easier user experience. And this does have the potential to increase DING! sales a bit.

I do wonder if Southwest will expand its offerings to include other phones. Yes, the iPhone is incredibly popular, but BlackBerry still has a larger share of the global smartphone market, and carriers that aren’t AT&T are busy pushing their Android offerings.

Regardless, mobile is big, and it’s not going away. While specialized apps aren’t necessary, airlines need to make sure that they have offerings that make life easier for travelers with smartphones – it makes life easier for travelers, and could potentially save time for airline staff as it gives passengers the options to take care of travel issues on their own while they’re on the go.

This makes me think…I really need a smartphone.

More details about the app here.

Well, earnings season has started this week, with results from American, Continental, and Southwest and more on the way next week. To be honest, I haven’t had the time to give the earnings releases the time they deserve. I’m hoping that over the weekend I can look over the SEC filings and listen to a few conference calls.

But I did want to point out something that really stood out in Southwest’s numbers – the airline is doing a fantastic job managing capacity. ASMs were down 7.7% year-over-year in the fourth quarter as Southwest cut many unprofitable routes. And Southwest was able to use that extra capacity to enter new markets that present new revenue opportunities – New York, Minneapolis, Milwaukee, and Boston were all added without Southwest growing its fleet. And despite the capacity cut, Southwest increased traffic (as measured by RPMs) 5.3% in the fourth quarter. Those numbers caused a big increase in load factor, on the order of 9.5 points to 77.3%.

And that should also explain Southwest’s favorable revenue numbers.

Yield is calculated by dividing passenger revenues by total RPMs, which show what passengers pay per passenger mile. Southwest’s yield decreased 6.4% to 14.22 cents. PRASM is like yield, except it brings capacity into the mix. One could divide passenger revenues by total ASMs, or multiply yield by load factor.

For the fourth quarter of 2008, Southwest’s yield was 15.19 cents, and load factor was 67.8%, giving us a PRASM number of 10.30 cents. In the fourth quarter of 2009, yield was 14.22 cents. With a load factor of 77.3%, that gives us a PRASM number of 10.99 cents – a 6.7% increase.

Now, just for the sake of argument, let’s say Southwest’s load factor in the fourth quarters of 2008 and 2009 were the same at 67.8%. If that was the case, Southwest’s PRASM for Q4 2009 would have been 9.64 cents, a 6.4% decrease.

So kudos to Southwest for really optimizing its schedule.