Southwest Airlines Senior VP Finance and CFO Laura Wright, at the Annual Dahlman Rose & Co Global Transportation Conference on 07-Sep-2011, stated Southwest Airlines has increased the number of B737-800s scheduled to enter the fleet next year to 33, all scheduled to replace the B737 classic, as part of an effort to continue reducing costs. Originally at 20 deliveries for 2012, the company has arranged for the lease of an additional five B737-800s which will be used out of its Dallas Love Field hub. The company expects to take delivery of 100 new -800s aircraft over the next few years, a large part of its cost-reduction strategy. Ms Wright also stated that due to fuel cost increases, which have resulted in declining profits for the carrier, it has become more aggressive in capacity cuts. Ms Wright also stated the carrier is anxious to enter the Atlanta market. It is planning to use Southwest metal to serve the 15 markets it originally announced in addition to the new points announced last week that AirTran did not serve – Phoenix and Las Vegas. Ms Wright elaborated on CEO Gary Kelly’s comments that Southwest would not retain AirTran’s B717s, stating it would be some time before they exited the fleet. AirTran brought 88 717s and 52 737s to the combined fleet. Ms Wright also explained the success of the company’s 2007 strategic plan, designed to increase revenues by USD1.5 billion, was driven by market-share increases rather than capacity growth. The additional revenues were offset, however, by rising energy costs. It is now in the midst of four follow-on initiatives including the acquisition of AirTran, its new FFP programme launched in Mar-2011, fleet replacement with the B737-800 and its new reservations system. Other initiatives in progress include additional revenue management techniques, in-flight connectivity, taking advantage of required navigation performance (RNP) and implementing an operations recovery/re-accommodation programme. Ms Wright added that merger synergies would yield USD400 million net by 2013, but it has forced the delay of its new reservations system, another initiative that will increase revenues exponentially.
Southwest Airlines accelerates fleet replacement
You may also be interested in the following articles...
European airline seat capacity growth accelerates - perhaps too quickly: Outlook for winter 2016/17
The summer 2016 season came to an end on 29-Oct-2016. Adjusting for an extra week relative to the previous summer, it produced seat growth of 6% for capacity to/from/within Europe, matching the rate of growth in summer 2015, but higher than the 10-year average rate of 4% and higher than any other summer since 2010.
Current indications from data filed with OAG are that Europe will also experience accelerating capacity growth in the winter 2016/2017 season, which runs from 30-Oct-2016 to 25-Mar-2017. Adjusting for the season being shorter by one week relative to last winter, total seat growth in Europe is set to reach 7%, compared with 6% growth in winter 2015/2016 (and 6% growth in summer 2016). This is higher than the 10-year average rate for winter of 3% and the highest winter growth since 2007/2008.
On routes to all but one region from Europe, seat growth this winter will both be faster than last winter and higher than its 10-year average. The one exception is Europe to Middle East, the fastest-growing region, where capacity growth will remain at 10%. This report presents analysis of this winter's seat growth for Europe by region and by airline group.
WOW air: the fast-growing Icelandic LCC starts new widebody services to US West Coast
The rapidly growing Icelandic LCC WOW air began a new chapter in its short history on 9-Jun-2016. Just over four years after its inaugural flight – from Reykjavik to Paris on 31-May-2012 – the airline has launched its first widebody service from Reykjavik to San Francisco. This route will be joined on 15-Jun-2016 by a Los Angeles service, also deploying A330-300 aircraft and taking its North American network to six destinations.
With 20 European destinations it is developing a role as a provider of low cost trans-Atlantic connecting services to sit alongside its point-to-point offering. In this respect it is providing growing competition to its larger compatriot Icelandair, which is also growing fast (and profitably).
However for now, at least, there appears to be room for both: Icelandair is not present on 12 of WOW air's European city pairs, or on three of its North American routes. Certainly the North Atlantic needs new competition, and both Icelandic airlines are helping to provide it.