http://biz.yahoo.com/ap/080422/airlines ... .html?.v=2

I can't but wonder if the entire Airline and Music industry are just built on outdated models... I think Southwest is one of the few airlines turning a profit still... I understand having to increase prices b/c of gas prices, but on a $200 ticket, if it's increased 20%, it becomes a $240 ticket, and if it's a hundred passengers, then it's a $4,000 profit- I can't imagine the airlines need THAT much more per flight for fuel...

Delta, United, American... they're not good business models, they're terrible in fact given how successful Southwest has been and they've refused to adopt certain principles (and I'm not talking about SW's open seating)

I work in the industry and I can believe it. There's a lot of things about the airlines I shake my head and shrug my shoulders at but the effect of fuel on the bottom line is not one of them. Every penny increase in jet fuel relates to roughly one million dollars over a year for the large airlines. The cost of jet fuel is slightly more per gallon than the gasoline that goes into your car's tank. I think Southwest may be mariginally profitable but just barely and not certainly like they used to be.
There's really two distinct types of carriers, those that were around before deregulation in the '70s and those that came along after. Each have their own advantages and disadvantages. For example it's no coincidence that those that have been around for decades have more union and pension issues. And any time you hear a carrier refered to as "low cost" it's low cost to them, not necessarily the passenger
So why don't the airlines just raise fares instead of nickel and diming with fees? When you (or a travel agent) check online to see who has the lowest price you're just quoted a base fare before taxes/surcharges/fees. If you see carrier A is charging $100 but adds a fuel surcharge, baggage fee and ticketing charge and carrier B is charging $130 with the additional fees included in the base which are you going to choose? And that doesn't include the various government fees (US, AY, ZP and XF) which can especially get high on international travel.
One bit of advice. If you do ticket from a discount online agency (Expedia, Cheaptickets.com, Priceline, etc) good luck making a change to your ticket. Those are very restricted and basically sold as-is. Definitely read the fine print on those.

I love Southwest, I only fly with them.

I can write a lot about this and might but I will just say two things for now:

1) While Southwest's model is great (one plane cuts down on costs, shorter routes, etc.) the main reason they are still making money vs. the others is they have been hedging their fuel costs. If oil went in the opposite direction they would still be making the same very small profit vs. the other airlines benefiting. All of this being said, hedging works IN THE SHORT TERM and eventually they will have to pay the same price of fuel as everyone else, whatever that price may be when it comes time to 'hedge' again.

2) The airline industry is first and the automobile industry is second in places to NEVER invest. They are terrible industries and while you might catch a lucky wave when things are going well...something will fuck you. Unions, foreign competition (when it comes to Auto but people are even now calling to let foreign airlines compete in the U.S...there are laws that prevent domestic air travel owned by a foreign entity...virgin airlines had big problems with this when trying to set up here and ultimately had to have the majority of the US subsidiary owned by US hands), and in the current case, Oil.

This was actually very damn informative

I do too. I like the idea of picking out my seat and their flights around the midwest are pretty cheap.

Southwest pretty much owns the non-cross country flights in the West.

is jetblue still around?

jetblue announced today they hired financial advisors to evaluate potential deals (that's wall street speak for they are fucked and they know it)...and the stock is at a multi year low...but yah they are still around.

and yes, southwest has a monopoly and many routes...in san diego if you want to fly direct to vegas...you are going southwest.

Yeah, thanks for that. One of the best things about message boards is all the industry-insider stuff, I learn a lot on here about businesses and other institutions.

Southwest has also done a very good job tapping into leisure markets as opposed to the business traveler. Again there's a reason you don't see them flying directly in one of New York's major airports and they fly into the second airport in places like DC, Chicago, Houston and Miami. I exclude Dallas since Love Field was their original home base. They service some of the west's major airports like LAX, SFO and Seatac but it was big news in the industry to see them position themself into directly Philadelphia. They serve Las Vegas and Orlando but those are largely leisure markets. Your business traveler is typically willing to pay higher fares and are the reason for the dreaded Saturday night stay. They want to finish their trip and be home for the weekend. Over the past decade or so Southwest has done a better job attracting these higher dollar customers but I would bet their bread & butter is leisure travel.
As Given mentioned earlier a large part of Southwest financial succes came from their fuel hedges, contracting fuel for a set price. As those contracts expire they are more subject to petroleum's market whims. Other carriers hedge too but not to the extent Southwest does, especially after 9-11. And they don't have the international routes of the old (legacy) carriers which is generally less price intensive than the domestic schedules. Passengers expect to pay more to cross an ocean.

I used to work for united in the 90s and up to 2003....what a horrible industry it is....I can only speak for united but the unions dont have a clue....also, all you have to do is look back 5-7 years ago when oil was 25-30 $ a barell and they still didnt make money...I honestly think the only thing that can fix some of the problems is for Government (gasp) to step in again and start regulating....once they stopped doing it 30 years ago, its been downhill since then.....God, If I only had the money to fly privately, I wouldnt hesitate one bit..

didn't expect this much good info about the industry... glad to understand it better... given, write more about this if/when you can b/c I too appreciate learning about all this stuff

some earnings results just came out....one that stand out and says all you need to know:

Delta LOST $16.15 a share and wall street analysts were expecting a loss of 49 cents

northwest lost 15.78 a share

This is where you can use different statistics to make different points. Delta's day to day operations lost $274 million in the first quarter which comes to 69 cents per share. Their revenue was actually up 10% since last year. The $6 billion figure does indeed reflect the over $16 drop per share since they came out of bankruptcy last year.
But yes, as mentioned above no one ever got rich investing in airlines.