Gregory (Harvard, '04) just lost $5 Mill on Porkbellies
For those of us who use an airstrip that is served by Southwest Airlines there is no competition. Our search for flights begins and ends at their website. No matter how the numbers appear at the beginning of the planning stage it almost always shakes out that no other airlines can compete with what SW has going. The reasons are many: Tons of flight options to major destinations, cheap tickets, simple and effective reward system, no change fees and no baggage fees. Those last two points have been jimmy-jammed into our melons over the last few months ever since Southwest launched their recent slew of ads.
It all seems good and if this post stopped now our cult of followers would be sure RTB has sold out maaaaaan (shut-up hipsters). Ahh, but this post, sadly for you, is not over and we have a gut feeling that things are going to get very ugly down by the beach...
It is pretty common knowledge that Southwest really took off in mid-00's after they took the chance and hedged on oil at like $52 per barrel. Of course, right after that happened oil shot up to about $4,321.21 per barrel, roughly. That loud sound we heard back in 2007 wasn't real estate investors blowing their heads off, it was actually SW's corporate officers shooting hookers and cocaine out of celebratory cannons. The oil hedge also allowed the "Bags Fly Free" mantra to mutate and take over the world and now the "No Change Fees" animal to eat all the fat cats in fake Judge Judy's court.
Well guess what sugartits, Southwest is right back in the scrum with the other airline criminals battling daily oil prices and losing. This means bad things for your discretionary squirrel fighting gambling fund. Proof? A fair increase happened across the board last week. The first for Southwest in awhile. And how about the new convoluted reward plan they slammed on the table? Instead of rewards based on the number of flights flown (which was just awesome), points are awarded in relation to miles flown and money spent (more the better). I wonder who benefits from that? The name rhymes with "screwingcustomersisthebest."
Here's a wild guess for ya too: Southwest milked the free bags thing for all it was worth and has now changed its ad focus to the change fees angle knowing they will indeed need to charge for bags in the very near future. Offering no change fees is solid enough to advertise the shit out of and less of a burden on the bottom line to provide. And you know that the bags fee craze is just too good of an ass-ram to the consumer to pass up. Just wait and see, the best of the best is going to turn into just another airline stealing your lunch money.
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