Tuesday, May 13, 2014

Competition Comes Full Circle

I love the story of how Southwest Airlines started out thinking in opposites and shifting dimensions to deliver an outstanding value compared to the incumbents.  But 47 years later, their air fares are no longer such a bargain (compared to other airlines) as they have evolved from newcomer to dominant force.

After 9/11, Government intervened with time-consuming TSA security screening which has added substantial time for the Southwest trip.  When you factor in the time required to check in, go through security, check and retrieve your luggage, not to mention the 55 minute flight time, it eats up about 3 hours on a trip from Dallas to Austin.  (One can obviously save time by not checking luggage and paying a premium for some of Southwest express business options.)

Southwest started by serving the largest three cities in Texas (Houston, Dallas & San Antonio).  They were the outsider and driven by a mission to provide great service at a low price.  Early on they considered the bus lines more significant competition than the other airlines because their fares were so low.

Southwest made it.  In fact they made it Big and as of today they have over 44,000 employees and 3,400 flights a day.  And here is where life comes full circle.  In the same Texas tri-city area (Dallas/Houston/San Antonio) that fostered Southwest, a new entrant might very well eat Southwest’s lunch in the same way Southwest caused havoc with the existing players when they entered the market.  The irony is the new entrant is a bus company.

The start-up is Vonlane and they drive a much more luxurious bus than the Greyhound your father used to ride. It includes WiFi, satellite television and radio, free luggage, free refreshments, complimentary newspapers, a closet for their attendant to hang your coat or jacket, no middle seats, 110v electrical outlets throughout and best of all plenty of room with first class seats.  All of this for only $100 each way.

A private six seat conference room at the back of the bus is also available for $600 per trip.  You can rent a regular seat only, the conference room only or some combination of regular seats and the conference room.
Last Week (May 5) Vonlane began their inaugural service between Dallas and Austin.  They soon hope to add other routes between Dallas, Houston, San Antonio and Austin.

There is no time wasted waiting in lines – you can arrive five minutes before takeoff.  And virtually the entire trip can be used productively on work, play or sleep in the same 3 hours that it takes to make the Southwest trip. 

By the way, I checked the Southwest Dallas to Austin Southwest airfare a few minutes ago for a flight later today and the lowest fare was $201 and that does not include parking.

Ain’t competition great (at least for the customer). 

No comments:

Post a Comment