If Dagwood Bumstead, I mean Gary Kelly announced bag fees tonight, stock would go to $30 Tomorrow
All this nickle - dime stuff...what is wrong with this Kelly idiot. He keeps pushing this " Happy Family " #$%$ and still insists on imaging Southwest as the lil' airline that could. Let's do the math again : in 2011 Southwest had net income of approximately $500 million while flying 100 million passengers. Charging $5/bag would DOUBLE
net income...OMG ...what if $10/bag was charged. ( still only half what other lines are charging ) Certainly some customers would be lost, but the amount of money we're talking about is too much to leave on the table and not collecting it borders on dereliction of fiduciary responsibility.
If Dagwood announced tonight Southwest would start collecting bag fees, LUV stock would DOUBLE tomorrow !!
I'll take your points one at a time :
1) SWA marketing for bag fees could be just as effective... " Our Bag Fees Are 1/5 Of Others"
Are you really trying to argue that Doubling net income is not worth the effort ??????
2) "These folks" haven't done anything for 40 years...some of them aren't even 40 years old ....
and not one of them would make a pimple on Herb Kelleher's landing gear. However , they
have managed to oversee a 50% stock price drop over the last ten years during which time
RYAAY, ALK, and CPA have had great stock price appreciation.
3) "Dagwood Bumstead" is not a schtick...Kelly has the same sheepish looks and the same
sheepish demeanor as Dagwood......His employees don't respect him and think they are in
in charge and entitled. That is a recipe for disaster.
. Blondie !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
SWA is a great franchise and enjoys many benefits passed down from the Kelleher days. Dagwood hasn't taken advantage of that legacy. Over the last decade the airline industry has gone through tremendous change. Southwest , with its huge cash stash and clean balance was and still is in position to dominate, yet he we are at $14/sh, a 26 p/e, and Hawaii, Alaska, and international travel still years away. SWA could have had all this nearly a decade ago with the ATA
purchase, but timid Kelly chose to half step.
Now before you get busy typing some stupid six word reply just read this next paragraph. If you look back to November of 2012, when the stock price started moving up you will see that the catalyst was the announcement of change fees and cancellation fees. Neither one of these fees would come close to generating the amount of money bag fees would. So once again : IF SWA ANNOUNCED $5/BAG FEES, THE STOCK PRICE WOULD DOUBLE.