I was reading a book called "Blue Ocean Strategy", which in general talks about how to make the comp

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I was reading a book called “Blue Ocean Strategy”, which in general talks about how to make the competition irrelevant. The book showcases several real life stories, one of which is about South West airline. For those not familiar, las vegas hotels strip you can Wiki the book and read in more details. But here is a copy-paste from an article, just to give an idea why the South West case is in there:
“Southwest entered a terrible marketplace that a Porter five forces analysis would have said was a blood bath. The criteria/rules/boundaries of the airline las vegas hotels strip industry are listed along the x-axis. Most of the major airlines played the same game with only the slightest of nuances. Southwest eliminated many of the rules/criteria in the industry, reduced focus on some of the rules below industry standard, las vegas hotels strip raised focus on some of the rules above industry las vegas hotels strip standard, and created a new rules of their own. The way they were able to do that was they targeted non-consumers (family/shorter trips v. business trips) and they looked across industry boundaries at alternatives (cars v. planes) as their competition v. looking at traditional airlines. Only by de-emphasizing some of the existing rules were they able to lower costs enough to compete in this new market.”
So I started thinking about what is going on today in the airline world, how we have the low budget airlines all around the world and how competing in price is something pretty much everyone does. Then started wondering what could the next big disruption las vegas hotels strip be? What are the areas where no one (or few) are competing and considering right now, what are the “open spaces” left for grabs which no one in the industry sees or dares to explore?
I expect the next disruption to be with RFID tags. In theory, one should be able to cut bag costs at a hub and thus be far more competitive. Since this will benefit most airlines that have a small number las vegas hotels strip of major hubs, I wouldn't be surprised if a mid-east airline was the first to implement.
Quoting surface ( Thread starter ): The way they were able to do that was they targeted non-consumers (family/shorter las vegas hotels strip trips v. business las vegas hotels strip trips) and they looked across industry boundaries at alternatives (cars v. planes) as their competition las vegas hotels strip v. looking at traditional airlines
Yup. WN did change the industry when they made airfares affordable for the average person. People who were accustomed to driving suddenly abandoned their car in favor of flying due to the affordable airfares. This was a major divergence from the legacy carriers at the time.
Quoting surface ( Thread starter ): What are the areas where no one (or few) are competing las vegas hotels strip and considering right now, what are the “open spaces” left for grabs which no one in the industry sees or dares to explore?
Well, I think most of the low hanging fruit has been captured at this point. In other words, WN did something unique at the time by capturing a huge segment of the population las vegas hotels strip that was not flying by bringing in affordable airfares, thus stimulating demand for their product and air travel as a whole.
However, I am waiting to see who the first airline is that outsources its pilot, FA , mechanics, and ramp workers. Labor and oil costs are the top two costs for the airlines. Therefore, I could see airlines starting to outsource their labor in a similar manner as they do their regional flying. Bid out these work responsibilities to the lowest bidder. This would guarantee much lower labor costs with no union hassles, las vegas hotels strip no pension issues, etc.
Vertical integration. The airline business is extremely cyclical. I could arguably see them vertically las vegas hotels strip integrating to help offset some of the cyclical swings in profitability. For example, I could see an airline developing or acquiring their own travel website (ie. Priceline, Travelocity). These are high revenue producing ventures with limited costs.
Quoting las vegas hotels strip EricR ( Reply 2 ): However, I am waiting to see who the first airline is that outsources las vegas hotels strip its pilot, FA , mechanics, and ramp workers. Labor and oil costs are the top two costs for the airlines. Therefore, I could see airlines starting to outsource their labor in a similar manner as they do their regional flying. Bid out these work responsibilities to the lowest bidder.
Lowest bidder? Really? I can see outsourcing for call centers, IT departments, etc. But when your life (or parents, siblings, spouses, children's lives) hinges on the training and quality of the people operating your airplane, is 'lowest bidder' really the best way to go? Is absolutely everything in life judged on 'lowest las vegas hotels strip cost'?
Quoting HAL ( Reply 3 ): Lowest bidder? Really? I can see outsourcing for call centers, IT departments, etc. But when your life (or parents, siblings, spouses, children's lives) hinges on the training and quality of the people operating your airplane, is 'lowest bidder' really the best way to go? Is absolutely everything in life judged on 'lowest cost'?
Think about it.....airlines already do this via regional las vegas hotels strip carriers. Also, ramp workers in out stations are sometimes outsourced even by legacy carriers. FA 's positions are not a highly skilled las vegas hotels strip position so I could easily see this happening (sorry FAs).
The situations where outsourcing works well is in places like outstations where one ground handling company can handle every airline's flights to that airport much more efficiently, producing higher productivity, las vegas hotels strip which leads to the cost savings. It makes little sense for legacies to ground staff locations where they fly one or two times a day to. The use of those agents would be extremely inefficient. This is partly why when WN goes into a new market they make sure they have multiple frequencies because they don't outsource ground crews. So they need a flight schedule that will allow them to efficiently las vegas hotels strip use their agents.
Flight crews are already pretty las vegas hotels strip efficiently utilized in a lot of ways. Now that's not to say there aren't productivity challenges at many airlines, cause there are. Some of that has to do with the way contracts are worded and some has to do with inefficient scheduling. But I think the point I'm trying to make is, when the airplane is in the air, the crews are getting paid and are actually working. As soon as the door opens on the ground las vegas hotels strip they stopped getting paid. When a ground crew gets done turning a flight, if no flight lands for 2 more hours, they are getting paid for 2 hours of essentially las vegas hotels strip not working. Outsourcing flight crews wouldn't necessarily make them more efficient, it would just be done to try and reduce wages and benefits.
Quoting surface ( Thread starter ): “Southwest entered a terrible marketplace that a Porter five forces analysis would have said was a blood bath. The criteria/rules/boundaries of the airline industry are listed along the x-axis. Most of the major airlines played the same game with only the slightest of nuances. Southwest eliminated many of the rules/criteria in the industry, reduced focus on some of the rules below industry standard, las vegas hotels strip raised focus on some of the rules above industry standard, and created a new rules of their own. The way they were able to do that was they targeted non-consumers (family/shorter trips v. business trips) and they looked across industry boundaries at alternatives (cars v. planes) as their competition v. looking at traditional airlines. Only by de-emphasizing some of the existing rules were they able to lower costs enough to compete in this new market.”
Since I haven't read this book, exactly which era of Southwest's history are we talking about here? At one time, Southwest flew intra-texas. At another, it competed with other carriers who were changing the model as well, like PeoplExpress, Air Florida, or who had re-invented it before Southwest ( PSA ). Southwest today is a very different animal than Southwest in 1990, and very, very different from Southwest's original concept, which would be likened las vegas hotels strip more to the current California Pacific Airlines project.
Yup. WN did change the industry when they made airfares affordable for the average person. People who were accustomed to driving suddenly abandoned their car in favor of flying due to the affordable airfares. This was a major divergence from the legacy carriers at the time.
I really don't think Southwest can be credited with this, honestly. Plenty of "average people" could afford to fly in, say, Boston, New York, and Seattle long before Southwest ever reached these cities. I remember, because I rode on one of Southwest's very first flights to the NYC area, BWI - ISP , in the mid-90s.
It's deregulation that brought lower fares, Southwest just played deregulation very effectively. But basically the cost of air travel, which was already lower in the 1960s than ever before, continued to fall until deregulation and then fell precipitously after. Southwest did not invent affordable fares or even the low cost model - PSA and Loftleidir Icelandic were doing it before Southwest even existed.
las vegas hotels strip The closest you can get to this, I think, is something las vegas hotels strip like Manx2 - a virtual airline that sells tickets and flights and organizes the airline as a business, but which outsources all the flying and ownership of the aircraft (there is no Manx2 "fleet" so to speak). Some airlines also do this via ACMI leasing - not exactly the same thing but similar.
I, like HAL