I am still catching up on my reading from the last two weeks.
I ran across an article in WSJ’s Dec. 23rd edition titled “Southwest Air Considers Shift In Its Approach”. The article has very little to do with Southwest. The article states Southwest is considering buying Embraer 190’s to their fleet. The rest of the article is about what all of the other low-cost airlines are doing.
You may know the only plane that Southwest flies is Boeing 737s. The reason is they are the lowest cost plane to fly. Imagine the indirect benefits the Southwest gets from flying one type of plane (maintenance, parts, pilot training, etc.). Southwest’s CFO Gary Kelly estimates the Embraer per-seat cost would be 15% to 25% higher than their current fleet.
The article ends with a quote from Kelly that I think correctly sums up their market:
We think the driving factor in choosing an airline is the fare.
Why change?