As a rule, I support SWA's
right to make such a policy. I don't think it's a good policy and I don't think it's a smart policy - as I think they are discovering. But they have the right to make it and the subsequent obligation to live with the consequences.
I don't go to amusement parks because, the last time I went, I couldn't comfortably ride anything much more daring than the merry go round. But I don't feel I have the right to demand that they make their rides accommodate me.
But it is still important for companies such as amusement parks and stores and airlines and just about everyone else to remember one thing - no matter how little they think they need my business, the simple fact is that I need their goods and services even less. That simple fact dictates the tone of our relationship and whether there will even be one.
I think a better policy for SWA would be something along the lines of:
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It is a common occurance that, for a variety of reasons, some people are denied the ability to board and take a flight that they have paid for. These customers are routinely compensated in some manner for this inconvenience and we always ask for volunteers first. But there are times when we must select which passengers will be denied service - and when we do the degree of compensation given increases accordingly.
If a situation arises where an aircraft is full and a larger passenger is encroaching on the seating space of another passenger to an unacceptable degree and other arrangements cannot be made, the larger passenger may be denied service and, with appropriate compensation, not be allowed to take the flight.
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But I found one of the claims made in their statement to be really troubling:
Quote:
From SWA's statement quoted in an earlier post:
For 2001, on average only six seats per aircraft accounted for Southwest Airlines’ profit. ... If we were to replace just three rows of three seats with two seats, each being one and a half times wider, we would have to double our fares to maintain our profit margin.
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This statement is laughably assinine.
Before we even look at this ridiculous claim in any depth, we can rule it out as being absurd immediately. If I had, say, only sixty passengers on a plane and I dropped that by three because I elimated seats, then my number of passengers went down by 5%. In order to keep the same revenue, I would therefore need to increase the amount paid by each remaining passenger by roughly 5%. It is completely irrelevant whether my profit for the flight corresponded to six seats, forty seats or half a seat. We're talking middle school match. So the notion that they would have to double their fares shouldn't have survived the first glance and the person that suggested it should have been sent out to get coffee.
What does the first part mean? Assuming that it is an accurate statement in the first place, it means this: on average, the amount of profit from each flight is equal to the average fare of six seats.
So, just to put some numbers to it, this is data taken from SWA website:
Quote:
Approximately 2800 flights a day
364 aircraft - 52 with 122 seats and 312 with 137 seats.
2001 Financial Statistics:
Net income: $511.1 million
Total passengers carried: 64.4 million
Total RPMs: 44.5 billion
Passenger load factor: 68.1 percent
Total operating revenue: $5.6 billion
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If they average 2800 flights a day, then they make 1,022,000 flights a year.
If they carried 64.4 million passengers with a total revenue of $5.6 billion, then their average revenue per customer was $86.95, their average number of passengers per flight was 63, and their average revenue per flight was $5480.
Keep in mind that a person making a round trip flight is TWO passengers - one going out and one coming back. This assumes that there is no significant revenue from other sources such as cargo - which is almost certainly not true since cargo carrying is a significant part of most airlines' business. But let's assume that there is no cargo service.
That means that the average revenue from a round trip ticket is only about $174. I can probably believe this given the claim that their HIGHEST one-way ticket is under $300 and since taxes and fees chip away pretty thoroughly at the fare the customer pays before the remainder gets counted as "revenue" for the airline.
Their "Net Income" of $511.1 million dollars divided by the number of flights means that, on average, each flight contributed right at $500 (of the $5480) toward that bottom line. At $86.95 per seat, that's 5.75 seats. This is almost undoubtedly where the six seat figure comes from. It appears reasonable (subject to the cargo question) so we will accept it at face value.
So, let's assume that we remove the three seats from the airplane as suggested and let's make the wild assumption that, on every flight, this means three fewer passengers. So instead of 63 passengers to get that $500 toward the bottom line, it would have to be done with only 60. In order to generate the same revenue - the $5480 per flight - each person would now have to contribute $91.33. That's a difference of only $4.38 each way or less than an addition $9 for a roundtrip ticket. And this would actually result in slightly more Net Income since three fewer people means less weight, less fuel cost, less food and beverage cost, less labor to handle baggage, etc. But these factors are pretty minimal as it costs almost exactly as much to fly an empty airliner (with a full crew) as it does to fly a full airliner.
So we've just seen that, even if removing three seats from each airplane to make room for six larger seats meant that EVERY SINGLE FLIGHT had to have three fewer passengers, that the average ticket price would only have to go up by $10. If that constitutes a doubling of the price, I want to know how to get that fare in the first place!
But what percentage of flights would such a change actually reduce the number of passengers on the plane. The answer - very few. On average, their aircraft have 135 seats - and worst case they have 122. So with an average load of 63 passengers they have a LOT more than three empty seats on the VAST majority of flights. For those flights, what difference does it make if 15 seats are empty or 18 seats are empty?
Now, at this point there is a discrepancy in their data. They claim a Passenger Load Factor of 68.1%. This would appear to mean that, on average, their planes are 68.1% full. But that would mean an average of 92 people per flight. That can be correlated with the total number of passengers only if they are flying just 1920 flights per day and not the 2800 claimed. It would also mean that the profit per flight corresponds to 8.4 seats and not six. So I suspect that the 68.1% is referring to something other than what I interpretted it to be - or there claim of a profit corresponding to six seats is wrong. But, even with these alternate numbers, the $10 would cover the worst-case shortfall and that the vast majority of flights would still have more than three empty seats today.
I have no idea what percentage of flights are fully booked, but I would suspect it to be under 1%. Let's say that it's 10%. That means that the shortfall due to fewer seats would only be 10% of worst case. So by increasing every ticket by only $1 they would cover the shortfall.
But let's look at it the other way. Say they took the three rows of three and converted them to six oversize seats. They could then make these seats available to customers at a, say, $20 premium (or even a $50 premium). Their number of customers would INCREASE because people that currently fly other airlines in the cramped seats would CHOOSE to pay more to fly SWA. They could sell some of the seats and keep a couple of seats open until the very end in order to let a couple people upgrade on the almost full flights.
Now, please note that the above statement by SWA was made by Colleen Barrett. She is not just some media relations hack. She is the President and Chief Operating Officer of Southwest Airlines. So, either she is so math illiterate as to actually think that her statement makes sense, or she is knowingly lying to us by using blantantly bogus Fuzzy Math. In either case, is she someone who should be making key decisions for a multi-billion dollar company?
I think I will be writing SWA and ask them that question. It will be interesting to see if I get one of those "accurate, specific, personal, and professionally written answers" that they claim I deserve.