How does Southwest Airlines make a profit?

My fiancee is in D.C., and I’m in Providence, so I’ve been buzzing back and forth recently on SW Airlines. (Not a plug–but I do love them! <g> ) I use SWA because they’re absurdly cheap.

My question: how do they make a profit? One-way from Providence to D.C. is $79, and let’s say there are 90 seats on any given plane. Surely after fuel costs, airport tolls, and paying the pilots and flight attendants, $7110 (90x$79) doesn’t produce much of a profit–and that’s if the flight is full! Even if the Postal Service pays them a bit to carry mail, I still don’t see how it adds up.

So, how do they make a profit?

A couple of points:
[ul][li]Not all tickets go for $79; they can be substantially more for last minute flights, especially business customers.[/li][li]SWA is a master of maximizing their resources. They keep their planes in the air a high percentage of the time by minimizing gate times.[/li]Volume-volume-volume.[/ul]

The same way Mad Man Muntz did it:

volume, volume, VOLUME!!!


TT

“It is better to know some of the questions than all of the answers.”
–James Thurber

Wow, GMTA.

GMTA?

Anyway, one of the MAJOR savings for SWA is that they only fly one type of airplane, the 737. This means all their mechanics know how to work on each of their planes, all their pilots can fly every airplane, etc. Other airlines with several types of planes must juggle resources such as pilots who specialize in 757 vs. MD-80 or whatever.

Other than that, billehunt is dead-on.

Great Minds Think Alike.
Southwest didn’t start out to beat other airlines. They started out to beat bus fare!
a)I’m not kidding and b)Heard of Continental Trailways in the last few years?
Southwest doesn’t fly hubs like the other airlines do. Rather, they fly the old point-to-point method. They just make sure their points run as full as possible. If a line should fall short and a long term reason for that shortfall can be identified…that run is cut. El Paso just lost it’s non-stop to San Francisco because of the Levi Strauss closings of the twin plants.
The 737 was chosen as the most economical plane to make their type of trip.
Southwest has never lost sight of what brought it to the table in the first place.

May I just say…SouthWest rocks!!! My kids and I are flying up to Hartford from BWI next weekend for $100 a piece, round trip, and non-stop. The other guys were not only over twice as expensive, but we had to change planes in NY.

And no, they aren’t paying me for this, I just think it’s an awsome company.

As a long-time travel agent, I can attest that Southwest has a very high degree of customer satisfaction. They’re usually the most on-time airline, too.

Their reservation system is a little clumsy on the agency side, but the customers don’t see that.

Volume, reduced costs, and satisfied, repeat customers…pretty sound business platform.

Not many airlines own the planes. They lease them for a set amount from the manf, Boeing.

Talk about cheap airfare, if you work for British Airways, you can fly yourself & a guest from England to the USA [Calif], about 5,600 miles, first class, for $188.00 for two people, inclusive.

Southwest is one of the best companies to work for! They treat their employees the best… Employee satisfaction has a huge effect on customer satisfaction. Since employees are happy, customers are happy… and they keep coming back


Never criticize a person until you walk a mile in their shoes… this way when you do criticize them you’ll be a mile away… oh… and you’ll have free shoes. :o)

Don’t have anything to add but **jjjfishe
** gets my nomination for the best SIG line ever.

Melin and I plan to travel to El Paso at the end of the month to visit MajorMD and PUNditOK. SWA often runs internet specials from Burbank to El Paso for as low as $68 or so, and even at full price it’s still the cheapest show in town.

And you would have probably done one/both legs of the trip each way in a “commuter” plane, which takes somewhat longer and is even less comfortable.

As pointed out before, SW makes sure they get maximum utilization of resources, have uniform hardware, and they never pretended to offer special amenities - which the major carriers have been cutting quite a bit w/o a corresponding cut in fares. And they let each route pay for itself or it’s dropped, while the major airlines tend to all be a little overextended somewhere along the system, with some routes subsidizing others

Do they have any flights to New Brunswick, Canada? :stuck_out_tongue: hehe
I wish there was such an inexpensive airline around here…


I don’t suffer from insanity…
I enjoy every minute of it!

Glen, try www.itn.com it is the big travel computer that every airline accesses. All the rates are there. This is not a low fare sort of web site, its the main airline computer.

Personally, I prefer not to fly on Southwest because I don’t like the cattle car mentality that their boarding system instills in passengers. But its so damn cheap - paying for a meal and an assigned seat just doesn’t seem to be worth the cost. Just play the game, show up early, and Southwest isn’t really that bad.

Southwest is a great example of cutting infrastructure costs - in fact, it’s fast becoming one of the most internet focused airlines in the world and will soon succeed in cutting more costs through the need for less ticket agents and airport personnel. Very interesting company.

Another thing - Southwest doesn’t fly any long haul routes, so the turnover on each plane is higher on any given day than on another airline - people get on and people get off more often. Volume, volume, volume.

Personally, I prefer not to fly on Southwest because I don’t like the cattle car mentality that their boarding system instills in passengers. But its so damn cheap - paying for a meal and an assigned seat just doesn’t seem to be worth the cost. Just play the game, show up early, and Southwest isn’t really that bad.

Southwest is a great example of cutting infrastructure costs - in fact, it’s fast becoming one of the most internet focused airlines in the world and will soon succeed in cutting more costs through the need for less ticket agents and airport personnel. Very interesting company.

Another thing - Southwest doesn’t fly any long haul routes, so the turnover on each plane is higher on any given day than on another airline - people get on and people get off more often. Volume, volume, volume.