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Q&A on Volaris

pberg
Not applicable

Starting today, Customers now have the ability to book flights to Mexico on Volaris via a link to Volaris’ booking portal on southwest.com.  I asked Senior Vice President Marketing and Revenue Management Dave Ridley to answer a few questions about what this news means for Southwest Airlines Customers and Employees. 

Q:  Customers will now have the ability to book flights to Mexico on Volaris via a link to Volaris’ booking portal on southwest.com.  Why just the link today, and what does that mean for Southwest? 

A:  We announced our intentions to codeshare with Volaris in November 2008.  While our official codeshare with Volaris has not yet begun, offering our Customers the option to book Volaris flights via the link on southwest.com is an important first step forward in that relationship.  It introduces our Customers to the Volaris’ brand and breadth of service and at the same time provides additional revenue to Southwest Airlines. 

 

Q:  Additional revenue sounds good.  How does that work, and how much additional revenue are you anticipating?

It’s too early to tell how many bookings or revenue that this new link will generate, but we will receive a commission with each Volaris flight booked via the link on southwest.com. 

 

Q:  In a separate announcement, Volaris said that they will begin service to two U.S. cities on July 1 – Los Angeles (LAX) and Oakland (OAK).  Are those two of the cities where Southwest will be codesharing with Volaris?

A:  Again, our official codeshare with Volaris has not yet begun, and we are not yet ready to announce which cities will support our codeshare service.  But, stay tuned.  We expect to make that announcement sometime in the first half of 2010. 

 

Q:  Why Volaris?

A:  A company’s dedication to Culture and Customer Service are very high on our priority list when considering a relationship of any kind.  And, we are confident that we’ve found a perfect fit with Volaris. 

  • Volaris was founded in 2006 and currently serves 39 routes in 23 cities throughout Mexico. 
  • They have a reputation for being a highly efficient airline with a dedication to Customer Service. 
  • They are known for competitive pricing and an end-to-end operations model that has earned them the reputation for being Mexico’s most ontime carrier, with a 92 percent ontime record. 
  • They operate a modern fleet of 18 AirbusA319 and an A320 aircraft with an average age of 2.17 years, guaranteeing lower Carbon Dioxide emissions, as well as a much lower sound pollution footprint than their competitors. 
  • Their single class, all leather seat cabin configuration is very similar to ours.
  • And, like Southwest, they have earned exceptionally high marks for their Customer Service through a commonly used net promoter score. 

All of these factors make Volaris a good fit for Southwest. 

 

Q:  In addition to codeshares with Volaris and Canadian carrier WestJet, we have also announced plans to broaden our international codeshare service even further.  Why aren’t we flying our own aircraft on these routes, and what impact will these plans have on our future growth?

Our CEO Gary Kelly has been very candid about our plans to codeshare to near international markets, along with Hawaii.  That was our plan with ATA Airlines, and we are now simply replacing the now defunct ATA with other carriers. 

The truth is we are not operationally ready to serve foreign destinations right now.  In addition to added operational costs and risks, we have no meaningful marketing presence in foreign countries.  Expansion opportunities in the U.S. are a much higher priority for Southwest than any foreign destination, and we have recently taken advantage of several of these opportunities in Minneapolis - St. Paul, New York LaGuardia, and Boston Logan.  We see more fruitful domestic opportunities ahead of us, and now is simply not the time to contemplate our own expansion to risky foreign markets. 

The other point to remember about our codesharing plans is that we’re contemplating only a marginal number of Customers per flight.  At the margin, this helps us sustain our own flights, especially in this environment of declining traffic.  The point is that codesharing is a necessary initiative to sustain or grow our own flying, not take away. 

 

Q:  Do these plans prevent Southwest from flying our own aircraft internationally in the future?

No.  Our codeshare agreements do not, cannot, and will not restrict us from flying internationally.  But, again, it will likely be years before we are prepared to consider our own international flying because it’s currently not viable—the expense and risks involved, coupled with the domestic expansion opportunities available to us, make it a low priority for us at this point.  That said, when we are presented with opportunities to make money on international routes we’re not yet prepared to fly, the responsible thing to do is to take advantage of those opportunities.  They allow us to grow our profits, and growing our profits is imperative to achieving our objective of continuing to grow the Southwest Airlines fleet and route map. 

 

Q:  How would you address concerns that we are growing other airlines at the expense our own?

That’s just simply not the case.  We have a number of revenue growth initiatives underway here at Southwest Airlines, with codeshare being just one vital component of our future growth strategy.  Simply put, the profits from our codeshare agreements will help finance the growth of Southwest Airlines.  The sale of WestJet and Volaris service on southwest.com is one important piece of that puzzle.  And, again, with regard to codesharing, Southwest is only interested in markets that would otherwise not be economically viable for us at this point to serve. 

 

Q:  In light of the current economic environment, we know some Employees may be nervous about the future and want to ensure that we are making the right decisions for Southwest and our Employees.  What can you say to those folks out there to assure them that their jobs are not being “outsourced”? 

We have been very open and honest with our Employees regarding our plans for near international codeshare opportunities.  And, recognizing our Pilots' sensitivity to codeshare, in particular, we have contractually agreed that Southwest codesharing will not be a substitute for continuing to grow our airline.  Rather, codeshare will be an adjunct of that growth.  In fact, we have even agreed that trans-border segment available seat miles (ASMs) of near international codeshare flights (e.g. Canada and Mexico) will not exceed a certain percentage of our total ASMs.  If our ASMs increase, then trans-border segment codeshare ASMs can also increase.  And, SWAPA, our pilots union, has agreed that if Southwest meets certain fleet growth targets, the limitation on trans-border segment codeshare ASMs goes away.  So again, codeshare will not be a substitute for our own growth.  We understand the concerns of our Pilots and all of our Employees, and we have agreed to work collaboratively with SWAPA on future domestic and far international codeshare opportunities.

 

Q:  Final thoughts?

We are excited about our partnerships with both Volaris and WestJet.  We see this as a win-win for everyone involved – our Customers, our Employees, our Company, and our new partners.  We are pleased to be adding value for our Customers, not taking it away, and we think our Customers are going to be very pleased with these new services and more to come. 

 

Thanks, Dave.  Tickets on Volaris and WestJet are now available for sale on southwest.com, so book today.  And, check out this thread on FlyerTalk for a trip report from a FlyerTalker who recently flew Volaris to Puerto Vallarta.  

5 Comments
scottnearsmf
New Arrival
Your upcoming announcement regarding Volaris looks exciting, so I just now (May 19th) checked it out and so that the first screen you get to has information that "expired" on May 15th. Also, digging in the Volaris part of the site also noticed that Los Angeles will offer Toluca, Hermosillo, and Cancun. Oakland is to offer Cancun, Guadalara, Hermosillo, and Toluca. So Volaris is to offer additional services beyond what was described on the outdated screen. Dig deeper and check out the services.
Alan2
Not applicable
It would make a lot of sense for Southwest and Volaris to use El Paso as a major hub to connect the two airlines together. Here are 10 reasons why: 1. El Paso is in the middle of the US and Mexico. Flights from the west and east could easily connect giving both airlines a central hub instead of having to have one hub for the west (Phoenix or LA) and one for the east (Houston, Dallas). 2. El Paso is a bilingual city. Almost everyone communicates in both languages so the need to hunt down bilingual workers would be solved. 3. El Paso's weather is better suited as a hub since weather delays would be minimal if not existent - at least El Paso's weather would not be blamed for any delays due to weather. 4. El Paso's airport is smaller than Denver, LAX, Dallas, Houston Phoenix - connections would be a breeze for customers. 5. Many El Pasoans understand both cultures and would make customers from both countries feel more at ease when travelling and making connections. 6. Southwest is the major airline in El Paso. Most people flying into El Paso are already frequent and loyal Southwest customers. 7. Other airlines flying into El Paso could take advantage of the El Paso to Mexico destination services, giving both Southwest and Volaris more revenue. 8. While waiting for their connections, passengers from Mexico could get a taste of Americana at El Paso's airport while American passengers could get a taste of Mexico. El Paso's airport provides a mixture of American and Mexican food (and not just plain airport food but actually with a very tasteful menu!) 9. ELP has been remodeled and modernized and could accomodate the additional traffic easily. 10. Volaris would have no competition from other Mexican airlines as it would be the sole provider of flights from El Paso to Mexico. Many El Pasoans travel to Mexico now by either going to the airport in Juarez (now a dangerous endevour) or by connecting in Phoenix, Dallas, or Houston.
Anonymous1246
Not applicable
A goodly part of Volaris flights operate through Toluca, which is not very convenient to Mexico City from where vitually all their other flights radiate_ Mexico is also a somewhat fickle market for commercial aviation as well_ The long-established carrier Aviacsa went out of business this year due, it's been suggested, to underfair influence peddling by, among others, the powerful Grupo Televisa (also a major investor in Volaris)_ With Aviacsa out of the way, perhaps Volaris will be able to use their much sought after MEX landing slots and stop bussing passengers for over an hour going and coming from the very basic and remote Toluca airfield
johnny_simpatic
Not applicable
It appears the SWA-Volaris codeshare deal is dormant. Too bad. Mexicana just abandoned its international service. Fares to Mexico have gone through the roof. A SWA linkup through ELP or Harlingen would be magnificent -- even if it means having a shuttle bus to bring passengers across the border. My sense is that if SWA doesn't do really feed directly to Volaris, someone else will. The market is too juicy.
Alan2
Not applicable
I still can't believe Volaris has not taken advantage of flying to El Paso so that Southwest passengers can have a more convenient way of connecting to Mexico. And I can't believe Southwest Airlines can't see what a goldmine El Paso would be for them if they had Volaris in El Paso.