July Traffic

A couple interesting things regarding July traffic:

1. Allegiant posted a ridiclious 95% load factor for July up from 91% year over year. That is a crazy number. The stock is up 14% up over the past week, jumping 11% today.

2. You might be seeing this headline out there: Traffic rises at AirTran, falls at Southwest. So you get the gist of it. However, I find the crucial number in this report to be Southwest's load factor which dropped 5.1 percentage points year over year, as LUV's capacity went up and it carried less passengers. Hey, they are paying below market value on fuel, but it is something to keep an eye on.

United: Good Luck Flying on November 30th

Do you usually fly United Airlines home for Thanksgiving? Targeting a return date of Sunday, November 30? Think again.

Others have noted United's decree to return to the Saturday night stay. Now it appears they are also betting on peak travel days. With the hubub over Southwest's opening of its fall and winter schedule, I did a quick check on two markets for the Thanksgiving weekend. United has closed all low inventory for the November 30th travel date. I picked two United markets. NYC-CHI which has plenty of competition. And also PIT-CHI which has far less competition. See below:



United is priced at least 50% above the competition in both these markets.

So, two takeaways:

1. Jump on the competitor fares right now.
2. United is not afraid to be agressive. They are making a play to actually cover costs.

Luv Does Chicago

The Chicago Sun-Times has a quick roundup on a luncheon with Southwest Gary Kelley in which he discussed Southwest's future. Unlike most of the other carriers, Southwest is actually moving forward with a strategy rather than simply reacting to the latest jump in fuel prices. Of course, the article notes Southwest's fuel hedging that they claim will save them $2 billion this year. And it mentions Southwest's plans to add Internet and other entertainment options.

But, the speech's emphasis, the article notes, was about treating people well -- both the Southwest employee and customer. Personally, sometimes I find the "cheer" a bit over the top, but these days Southwest is one of the few places you will find people smiling. Setting aside financials and route structure, the comparison really tells you why Southwest is on its way up and US Airways is stuck at the bottom. While waiting for my 3rd US Airways flight of the day to be cancelled earlier this week, I overheard another gate agent announce that, due to a computer glitch, they were going to board alphabetically. Apparently, a passenger or two made a joke about it and it was only a matter of seconds before the gate agent was back on the microphone berating the passengers for improper behavior. It was really quite shocking.

I'm sure the Republic Airways employees that were actually flying the plane were cheerful, but I doubt anyone on that plane got beyond the behavior of the US Airways gate agent. These days the stock prices on the Yahoo chart to the right react solely on the rise and fall of crude oil. But, it is important to remember that, once this all settles down, there are factors, such as service, that do matter.