BOSTON--AND THE FALL--NOW FOR SALE!

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BOSTON--AND THE FALL--NOW FOR SALE!

Tue, 04/14/2009 - 10:01 — Bill Owen

Hello, Beantown! Our new service to Boston’s Logan Airport is now available for sale! Five weekday nonstops each day between Boston/Logan and both Chicago/Midway and Baltimore/Washington will start on August 16, 2009—with connecting and direct service to 48 other Southwest destinations (I’ll get back to you later for specific terminal and gate information for Logan). In fact, our entire schedule is now open all the way out through October 30, 2009…..so it’s time to book those fall excursions, y’all! Since Southwest serves so many gateways in New England—Hartford, Providence, Manchester, and now Boston—sounds like a great time to go get some “lobstah” or do some “leaf peepin’”…..eyah???

But there’s far more than only Boston to talk about with the Fall 2009 Schedule. This schedule contains some significant changes….and is very reflective of the economic environment that we all find ourselves in. Given the uncertainty of the economy, diminished airline traffic, high energy prices, and about a zillion other factors we consider as we plan for future schedules, we’re being extremely cautious about how many flights we schedule for the August-October timeframe (traditionally among the slowest times of the year) as well as being incredibly focused on the departure time of each and every flight. More than ever, we’ve used our schedule optimizer to help us trim flights that historically have departed at times that proved unpopular with our Customers—and you’ve told us by not flying on them! To frame this with statistics (we’re really good at doing that here in Schedule Planning!), in the Summer 2009 schedule, about 80 percent of our flights departed in what we consider “prime time,” defined as 7 a.m. to 7 p.m. By eliminating a number of unpopular flights that leave earlier than 7 a.m. or later than 7 p.m., in the schedule beginning August 16, that percentage increases to 86 percent. That is, by far, the largest swing of this schedule measurement from one schedule to the next in our history. While six points might not seem like much, remember that those six points are spread over a flight “base” of over 3,200 flights, so those six points represent a tremendous shift.

Of course—lest we freak those of you that use our very early and very late flights regularly out—we (obviously!) didn’t simply cut everything before 7 a.m. and after 7 p.m. Flights that have in the past been scheduled at those times and been popular should still remain in the schedule. So if you’re an early bird or a night owl—and as long as there were enough of you on those early and late flights—we’ve still got you covered!

As an explanation to those of you who use very early flights on Friday mornings, or very late flights Friday or Sunday nights, that are eliminated in the August schedule...some of the flights we have trimmed in this schedule had decent loads on Fridays and/or Sundays, yet were very unpopular Monday through Thursday. So why couldn’t we keep those flights only on the days they were popular? The answer might surprise you. Southwest is “built” to operate the same schedule, almost exactly, each day of the week, Monday through Friday, with Sundays from noon-ish on looking almost exactly like the afternoons from Monday through Friday (Saturday has always been its own animal!). Therefore, we had to look at each flight’s results as an average across the whole week, instead of more surgical trimming by specific day of the week. We realize this constraint restricts what we can do with our schedule, and the concept of day-of-week schedule variations is intriguing to us. Who knows—this might be the subject of an entire blog post later.

Getting into the specifics of the August 2009 schedule compared to Summer 2009…we’re bringing back nonstops between Little Rock and Phoenix, in addition to the new service between Boston and both Chicago and Baltimore. We’re also reducing frequency in a total of 81 markets—so this is easily one of most aggressive schedule reductions we’ve ever undertaken. However, again, remember that the vast majority of flights we’re cutting are from the “margins” of the day that (for the most part) you guys didn’t use anyway. We’re eliminating nonstop service in only three nonstop markets—Cleveland to/from Orlando, Indianapolis to/from Jacksonville, and Norfolk to/from Las Vegas—and all three of these markets will retain many direct and/or connecting itineraries. The good news is that we’re actually adding service in six markets, and keeping the number of aircraft flying the exact same.

So….for the August Schedule, we’re opening a new city, shrinking the number of flights in the network, and keeping the number of aircraft in the air the exact same compared to the previous schedule. What should this tell you? That all of us at Southwest are creatively and aggressively responding to market conditions (both in the economy and in the state of aviation industry)…yet those moves are tempered with a healthy dose of “maintaining who we are.” (Talk about your conundrums!) We’re very hopeful that we can resume our growth as soon as the economy begins to rebound—and we’re certain that, eventually, it will.

I recently sat down with our Executive Vice President of Strategy and Planning, Bob Jordan to get his insight on Southwest’s network growth strategy in this challenging environment, here are a few quotes from that discussion:

How would you describe our current growth strategy? We are introducing our low fares and convenient service to new, untapped markets by tapping aircraft time, made available through our schedule optimization, to those places Customers want to go. At the same time, we are showing that we can successfully enter a new market with a conservative investment. This tactic somewhat mitigates the risk in this type of environment. Essentially, we are benefitting from the 38 year investment we’ve made in developing our brand and vast network by “connecting the dots.”

Why is it important to “tweak” our growth strategy in this environment? We realize that the majority of our Customers are changing their spending habits and we must adapt ourselves to our Customers’ needs. Flight optimization is a sophisticated approach to deploying our aircraft. Again, we know that some of our established markets have seen a drop in traffic due to higher energy costs and recession--but thanks to optimization, we’ve been able to adapt quickly, going where people want to fly at the times people want to fly.

If you have a question that you would like to ask Bob, join us for a “lunch with Bob” session on Twitter today at high noon Central Daylight Time!

Thanks for reading this, folks….and more importantly—thanks for your support (and I’m including both our loyal Customers and our wonderful Southwest Family in that statement!). If you have any comments or questions—just post a comment to this blog. I’ll be watching and will post responses as soon as I can. (I’m really good at responding to comments while listening to American Idol!!!)

Happy booking, everyone.

Have questions about today's Boston announcement? Leave them in the comment section below between 10:00am-11:00am CT and we'll ask our Executive Vice President of Strategic Planning, Bob Jordan. A video with his answers will be posted on the blog later this afternoon.

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Comments

Hey Bill,
I'm glad Southwest has come to MSP but somehow your prices don't make any sense. I'm looking at a one-way flight from MSP>FLL on June 9 Flight 186/10 which switches planes at MDW at $179.
If I look up flight 186 MSP>MDW it is $69 and flight 10 MDW>FLL the price is $59, the total should be $128 at 2 one-way flights. Why is Southwest charging $179 if I book MSP>FLL? I would think MSP>FLL should be around $99. A one-way flight from MSP>MCO is only $64 for the same date. I have noticed the same fare pattern on a bunch of different days going to FLL.

Mike S. — Tue, 04/14/2009 - 11:23

I would like to know why I can't get Rapid rewards for the tickets I purchase for my kids or mother? Everyone else I understand. Just Curious!

Ramon — Tue, 04/14/2009 - 11:23

Nice to see New England with more complete Southwest service now. Can we eventually expect to see Boston nonstops to destinations similar to those served by Providence and Manchester? Orlando, for example, has a lot of nonstop Southwest service from Providence, Manchester, and Hartford. Thanks.

Robert S — Tue, 04/14/2009 - 11:30

Bill,

I accuse you of putting "cool leaf changes" into the optimizer and that was the basis of the schedule. I offer as evidence the additional OAK -GEG.

Defense?? ;-)

Seriously, thanks for keeping us flying, and even increasing our offerings to new cities.

Will

Will — Tue, 04/14/2009 - 11:40

Hi Bill and all in schedule planning.
I just want to say a few words about this and future scheduling.
First, I am happy to see us grow into the larger markets on the East coast. it is about time.
Secondly, it concerns me that at my home station, that it appears that with the latest flight cuts here, as well as retiming of remaining trips, that we seem to be de-optimizong the schedules here. Yes we finally get a through flight first thing in AM to DEN, but latest scheduled return leaves DEN at 2:15pm. That doesn't seem to convenient for any business traveller. Or leisure, for that matter.
Also, our latest inbounds from anywhere easterly, or for connecting purposes from the East, seem really too early in day. Last arrival from SLC at 6ish PM? That really helps out no one east of SLC. And finally, our new PDX/SEA schedules will seem to help out Horizon quite a bit in my opinion.
Yes, I am concerned that we will cut here, then amazingly when flight loads go down due to worse schedule here, we cut and so on. A downward spiral to justify a future discontinuation of service.
When I started here at WN, I always was wondering how long it would take for WN to become like how the larger airlines were at that time. Well, it looks like 15 years is the answer. So, I feel in another 12, we wil be like how they are now.
Thank you for your time and to let me vent.
So, when do we start the hub-and-sppoke system? LOL. Just kidding.
Take care and have a nice day.
Mike

M — Tue, 04/14/2009 - 11:54

Question for Bob Jordan-EVP:
Could the start date begin sooner for new Boston Service (from BWI) like at the beginning of Summer in June vs. August?

Thank you

Anonymous — Tue, 04/14/2009 - 12:19

Love the Boston schedule! This will be the first time we've been able to make the whole trip on a full size plane in a long time and not once a day but several times a day :) As always I have to throw BNA-ATL & CLT out there.

BNA — Tue, 04/14/2009 - 12:22

Anchorage Alaska why don't you come make money in Alaska????

Anon — Tue, 04/14/2009 - 12:43

Will you print a table showing which markets will get more service and which will get less? Also since you are reducing service in 81 markets but flying the same number of aircraft, that the average flight time per aircraft will decline?

Ron — Tue, 04/14/2009 - 13:56

Bill,

Nice to see the additions for this fall.

Quick question: You mentioned the addition of service in six markets...what are those?

VegasLUV

VegasLUV — Tue, 04/14/2009 - 14:17

Ron - If you click the attachment link at the bottom of Bill's post (Aug16Changes.pdf), it will take you to a table which breaks down the optimization.

Paula Berg
Southwest Airlines

Paula Berg — Tue, 04/14/2009 - 14:18

In response to Ramon - wanting to know why he can't get Rapid Rewards Credit for his mother and children. It's called a Frequent FLYER Program. Not a Frequent PURCHASER Program.

I purchase, with my own credit card, around 10 Southwest flights per week for others. I would LOVE that credit! But I'm not the one FLYING.

Anonymous — Tue, 04/14/2009 - 14:21

I AM NOT FLYING TO LOGAN BECAUSE IT TOO CLOSE TO DOWNTOWN AND MAJOR TRAFFIC TROBULES THAT S WHY I AM KEEP FLYING TO MANCHESTER IT S MUCH EASIER FOR ME THATS WHY NOT FLYING TO LOGAN

MIKE THORN — Tue, 04/14/2009 - 14:34

I am so excited for this service to begin at BOS

Anonymous — Tue, 04/14/2009 - 17:47

Why have you over the last 8 or so years gone on a trend of continually cutting back larger portions of flights than you are adding(shrinking) in places like St. Louis and Nashville which used to be Top Ten cities thus pushing them off the list while keeping the growth pace up in others so that they would stay on? What should be expected as far as the future of these markets goes in terms of their size? Also, why after all these years are you cutting certain intra-Texas routes which is how you got started?

Sam — Tue, 04/14/2009 - 18:07

Why did you CUT the last Cleveland to Orlando Non Stop???Will it come back in the winter??

jack tighe — Tue, 04/14/2009 - 18:34

Hi, everyone! Some brief answers.

Mike S--I'm in Schedule Planning--our pricing is taken care of by the Revenue Management and Pricing group, so I can't speak for them as to what is or is not "appropriate" pricing. However--I know from personal experience that you can certainly purchase two tickets exactly as you describe. Being a Dallas area resident, that's how folks used to have to work to get around the onerous and now on-the-way-to-sunset travel restrictions from Dallas Love Field. Just make certain you allow enough time to make your connection at Midway (45 minutes should be sufficient).

Ramon, as explained above, RR credits are awarded to the traveller, not the purchaser. You might consider enrolling Mom and baby girl in RR themselves--then they would get to start building up their own credit "bank!"

Robert S, we're opening Boston just a tad larger than we opened Minneapolis/St. Paul, but you can see by how quickly we responded to our incredible reception at MSP that the surest way to see more service is to fly Southwest's new service often--and bring your friends!

Will--what, me, cook the books? :) Seriously, the process used to create schedules has become an INCREDIBLY collaborative one. We'll have to catch up on that sometime. Until then--thanks for the kind words, and thanks for giving our Customers your usual incredible POS!

M, I am **assuming** you are in Boise (by looking at the 'clues' you gave and the schedule that was published). While I agree that it's a difficult and slippery slope to try and shrink your way to profitability, I stand solidly behind this schedule in its totality. The whole thing about schedule optimization is that you don't nail everything, but the overall, entire product is scored to be the best. As to specifics--I personally think the last SLC-BOI departing at 4:35 is nearly perfect for the local SLC-BOI market. True, it may offer fewer connecting opportunities from the East (including DEN)--but those markets are much smaller, and already very well served by our competition. That doesn't mean we don't want that piece of the business--but we're always going to schedule first for the local market, and then for the direct and connections. In fact--that's what separates us from the hub-and-spoke guys!!!

BNA--thanks for the kind words!

Anon--we're adding service to three of the busiest airports in the lower 48 this year. Let us finish our business down here--then we can look again at serving the state that Saturday NIght Live claims has at least one resident that "can see Russia from [her] house!"

Mike Thorn, you are the EXACT reason why we think serving three airports in the greater Boston area is the right move. Manchester is a great airport and the most convenient for a whole lot of people--so is Providence for another, different group of folks. For a third group, Logan is the ticket. And now, Southwest can offer those "tickets" to all three groups!

Sam--the answer is very simple. Southwest is responding to market conditions and Customer demand (read: traffic results). The exact same holds true in Texas, in Missouri, Tennesee, and everywhere else we fly. With our increasing cost base (even ex-Fuel, as you heard Gary talk about in the Messages to the Field if you were able to attend or watch online, or read about on SWAlife or in LUVLines), compounded by the overall shrinking of airline travel during the current dep--er, recession--we can no longer affford to operate flights at times of day that our Customers simply don't buy. We're modifying our system to serve more Customers conveniently than before. As to what the future brings--who knows. But we're doing everything we can to make Southwest's--and our--future bright. (Hey, I said the answer was simple. I never said it was concise!!)

Thanks, guys. I'll look again tommorrow evening!

Bill

Bill Owen — Tue, 04/14/2009 - 20:30

I'm so glad that you've added Boston to your itinerary. Thank you! My sister-in-law comes from Maryland to Boston about every 2 to 3 months and stays with her dad who is only 30 minutes from Logan. I don't travel as much, but I fly to Maryland as well. Logan is closer to me-about 45 minutes- but the airport parking fees are considerably more per day than at Manchester. So I guess I'm in a bit of a quandary, myself. I want to be able to drive to the airport and park, and do not really want to ask someone for a ride. Also I'm glad that we can fly into/out of IAD as BWI is a hike.

Connie — Wed, 04/15/2009 - 13:42

Bill--thanks for all the answers. A couple more questions... now that there are seasonal schedule variations (like more Florida in winter and more northern market flights in summer), can we expect expanded early and late departures in the more seasonal markets during their peak seasons? For example, an additional evening PVD-MCO flight that would be weak in September might make sense in March, and could be drawn from a line that otherwise parks a little early. You mention day of week variations; this would be very appropriate for markets like LAX-LAS and LAX-OAK and I'm sure it would be a lot of work. Even beyond that I could see vacation week variations... think of the possibilities for boosted Spring Break service to Florida. Okay, I'll stop finding ways to make your job harder! Thanks.

Robert S — Wed, 04/15/2009 - 17:34

Hey, guys....watching "American Idol" tonight--wow, Jennifer Hudson looks INCREDIBLE especially after the awful tragedy she and her family suffered recently!

Connie, thanks--we really think Logan is going to round out our New England offering. So hopefully we'll see you on one of our flights as soon as we start our Boston service!

Robert, dude, if you could ONLY see my project/priority list. Looking at traffic variations across seasons and days of the week is a big one--and it's one in which the data we have collected is just stupid massive as well as has incredible impact. So no worries, buddy--I've already made my job harder. Stay tuned--after a healthy time period--to see how Southwest may be changing in these regards!

Still watching Idol....don't know who I like best--Allison or Adam. I guess you could say they are in the "A" list....kind of like our Business Select and A+ Customers. (Yeah, I'll admit that was pretty cheesy.....but it made me chuckle!)

Night everyone! Updates as you comment.

Bill

Bill Owen — Wed, 04/15/2009 - 20:43

Hi Bill,

Is Southwest also acquiring ATA's slots into DCA? Hopefully once you gain some great experience with slots in New York that would be great if Southwest began to offer service into DCA from Chicago.

Thank you,
Rich

Rich824 — Thu, 04/16/2009 - 13:29

My parents & I LUV Boston! Do you think you'll have service there from TUL? :)

Leah — Fri, 04/17/2009 - 20:48

Its sad to see Islip is losing another three flights, down to 22. We have lost 40% of the flights. During the middle of the the day, the new SWA terminal is empty with not one plane at one of the eight gates. The "very bullish outlook" about ISP we heard early this year looks like it will not be coming to pass after all. At what number of flight {less than 10?} is SWA pulling the plug.

tony — Fri, 04/17/2009 - 21:00

The most important thing Southwest can do is remain profitable. If it doesn't, their goes my luggage fees and many other costs. Southwest passenger load drops in this economy is much less than its competitors (luggage fees do manner). I suspect if you were compare Southwest flight discreases to other airlines over the past 12 months, the other airlines would have much bigger decreases.

Anonymous — Sun, 04/19/2009 - 22:43

Hi, everyone! Happy Monday!

Rich, I"m not sure what happened to ATA's DCA slot. It's my understanding they had a very small number of them; in any event, Southwest hasn't indicated any plans to start service at National.

Leah, we'll have connecting service between BOS and TUL!

Tony, Southwest remains bullish on our ISP service. The three trips trimmed in this schedule change are all to leisure Florida destinations, and more or less seasonal in nature. However, leisure or not, in this economy we cannot afford to continue to operate flights that aren't popular with our Customers.

Anonymous--you are SO right. Southwest's decreases have been significantly less than those of the other large airlines.

Hope everyone has a GREAT spring week!!!!

Bill

Bill Owen — Mon, 04/20/2009 - 18:26

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