WorldTraveler
Corn Field
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WN to add 15 new cities from DAL.
- Thread starter 700UW
- Start date
eolesen
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Good piece by Brett today bringing the discussion of the new routes down to Earth a bit...
http://crankyflier.com/2014/02/06/southwests-announcement-of-15-new-destinations-from-dallas-leaves-so-many-questions-unanswered/
They've got at best about 35 frequencies to split up between 15 new destinations, and if they try to fly business markets with less than 5 trips a day, it's going to be tough to win over all but the true die-hard A-listers.
They need to free up another 20-30 slots at a minimum, and that can only come by pulling back more than they've already announced. They could go to hourly to HOU and free up a dozen right there...
Here's a snapshot of the DAL pattern of service:
If you take away 2 frequencies from the cities with 7+ frequencies, and 1 away from ELP, you'd wind up with about 17 slots freed up.
If you further pare back HOU, that could free up another 7 or 8, but that starts cutting deep into a shuttle market which is bread & butter...
The only remaining alternative would be to further cut at the cities at or below 4 flights per day, if not cutting a few cities loose.
Personally, I'd put ICT, AMA, LBB, and MAF on the list of cities I'd drop from DAL, if not from the route map. That would free up another 8-12.
We'll obviously know more in a few months.
http://crankyflier.com/2014/02/06/southwests-announcement-of-15-new-destinations-from-dallas-leaves-so-many-questions-unanswered/
They've got at best about 35 frequencies to split up between 15 new destinations, and if they try to fly business markets with less than 5 trips a day, it's going to be tough to win over all but the true die-hard A-listers.
They need to free up another 20-30 slots at a minimum, and that can only come by pulling back more than they've already announced. They could go to hourly to HOU and free up a dozen right there...
Here's a snapshot of the DAL pattern of service:
Code:
DAL ABQ WN 8
DAL AMA WN 4
DAL AUS WN 10
DAL BHM WN 3
DAL ELP WN 5
DAL HOU WN 22
DAL ICT WN 1
DAL LBB WN 4
DAL LIT WN 4
DAL MAF WN 4
DAL MCI WN 8
DAL MSY WN 7
DAL OKC WN 3
DAL SAT WN 11
DAL STL WN 8
DAL TUL WN 4If you further pare back HOU, that could free up another 7 or 8, but that starts cutting deep into a shuttle market which is bread & butter...
The only remaining alternative would be to further cut at the cities at or below 4 flights per day, if not cutting a few cities loose.
Personally, I'd put ICT, AMA, LBB, and MAF on the list of cities I'd drop from DAL, if not from the route map. That would free up another 8-12.
We'll obviously know more in a few months.
WorldTraveler
Corn Field
- Dec 5, 2003
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There are plenty of people who said that WN would have to cut its current schedule at DAL if they want to have any meaningful opportunity to grow outside of the WA.
With the cities that have been announced, WN will fly 7 of the top 10 AA domestic markets from DFW (counting ORD and MDW as the same market since WN doesn't serve ORD as noted), and there is no service to SEA or BOS.
And WN will serve 8 of the next 10 top markets, excluding EWR and MIA.
Thus, WN has access to 75% of AA's top markets. Given that they only have to deploy 4 flights/day in the top 5 markets to provide as many seats as AA carries in local DFW passengers/day, WN has more than enough capacity to successfully compete in AA's top 20 markets.
Add in that WN does carry a significant percentage - 40%+ connecting traffic via DAL on its current cities, and they have more than enough capacity to serve even the top 30 markets from DAL if they use their slots appropriately which means push the connecting traffic elsewhere, use the largest aircraft possible, and schedule efficiently.
Five flights/day is enough to successfully compete in the top 5 markets; 4 or less is needed outside of that.
Further, WN can't argue about other carriers using smaller aircraft if WN is carrying connecting traffic. Other carriers' use of aircraft smaller than WN's is because they aren't carrying connecting traffic - 100% of their traffic is local traffic.
When WN eliminates all of their connections over DAL, they can argue that they have a right to larger number of gates.
I doubt very seriously that WN will offer much if any connections over DCA or LGA using the relatively few slots they have there.
And it still doesn't change that just because WN thinks they need access to more gates doesn't mean that they can or will be entitled to them. WN is operating in a world of limited airport access; they can't argue that they are disadvantaged at DCA and LGA and need gates there but end up with more seats than UA (which is very likely) but yet need to control 90% of the gates at an airport where they already control one of the highest percentage of gates of any large airport.
WN's hope has been that other LFCs or LCCs would come along which could justify that they should get priority of the gates at DAL, but there is no legal basis for arguing that an airport should be restricted to LFC or LCCs to the exclusion of network carriers. None.
Further, WN's own dominance of its markets argues against any other LFC or LCC trying to compete against WN and certainly not at the level of activity that DL is proposing.
DL published its schedules to show the level of activity it would have at its gates which is at or above levels which WN will operate from its gates - and which so far no carrier, including WN has exceeded.
Given that DL's schedule does have some holes in the schedule in the evening, it is possible that gate activity could be pushed even higher if DL chose to add further flights or if WN was permitted to use some of those gates in the 6 to 10 pm time period. DL's schedule is predominantly going to be east and nortbound while WN's will include more westbound destinations - based on current schedules.
It is also possible that DL could unload its large RJs in as few as 10 minutes, pull those planes off the gate and reload them in another 15 minutes at the gate cleaned and ready to go. DL is essentially using that technique to maximize gate usage and minimize capital expense for new gates at JFK and will likely do the same at SEA just as it also does at LAX. Given that WN has prided itself on how quickly it can turn aircraft, there is the capacity to operate way more than 12 flights/gate at DAL for both DL and WN.
It still doesn't change that if the DOJ allows gates to be sold to the highest bidder regardless of market concentration, then there are a whole lot of carriers that will be put out of business and the change in control of a whole lot of airports is at stake.
We can argue about the theory all day long but I appreciate that swamt is willing to put his name on the line behind his position.
Anyone else who would like to do the same is invited.
With the cities that have been announced, WN will fly 7 of the top 10 AA domestic markets from DFW (counting ORD and MDW as the same market since WN doesn't serve ORD as noted), and there is no service to SEA or BOS.
And WN will serve 8 of the next 10 top markets, excluding EWR and MIA.
Thus, WN has access to 75% of AA's top markets. Given that they only have to deploy 4 flights/day in the top 5 markets to provide as many seats as AA carries in local DFW passengers/day, WN has more than enough capacity to successfully compete in AA's top 20 markets.
Add in that WN does carry a significant percentage - 40%+ connecting traffic via DAL on its current cities, and they have more than enough capacity to serve even the top 30 markets from DAL if they use their slots appropriately which means push the connecting traffic elsewhere, use the largest aircraft possible, and schedule efficiently.
Five flights/day is enough to successfully compete in the top 5 markets; 4 or less is needed outside of that.
Further, WN can't argue about other carriers using smaller aircraft if WN is carrying connecting traffic. Other carriers' use of aircraft smaller than WN's is because they aren't carrying connecting traffic - 100% of their traffic is local traffic.
When WN eliminates all of their connections over DAL, they can argue that they have a right to larger number of gates.
I doubt very seriously that WN will offer much if any connections over DCA or LGA using the relatively few slots they have there.
And it still doesn't change that just because WN thinks they need access to more gates doesn't mean that they can or will be entitled to them. WN is operating in a world of limited airport access; they can't argue that they are disadvantaged at DCA and LGA and need gates there but end up with more seats than UA (which is very likely) but yet need to control 90% of the gates at an airport where they already control one of the highest percentage of gates of any large airport.
WN's hope has been that other LFCs or LCCs would come along which could justify that they should get priority of the gates at DAL, but there is no legal basis for arguing that an airport should be restricted to LFC or LCCs to the exclusion of network carriers. None.
Further, WN's own dominance of its markets argues against any other LFC or LCC trying to compete against WN and certainly not at the level of activity that DL is proposing.
DL published its schedules to show the level of activity it would have at its gates which is at or above levels which WN will operate from its gates - and which so far no carrier, including WN has exceeded.
Given that DL's schedule does have some holes in the schedule in the evening, it is possible that gate activity could be pushed even higher if DL chose to add further flights or if WN was permitted to use some of those gates in the 6 to 10 pm time period. DL's schedule is predominantly going to be east and nortbound while WN's will include more westbound destinations - based on current schedules.
It is also possible that DL could unload its large RJs in as few as 10 minutes, pull those planes off the gate and reload them in another 15 minutes at the gate cleaned and ready to go. DL is essentially using that technique to maximize gate usage and minimize capital expense for new gates at JFK and will likely do the same at SEA just as it also does at LAX. Given that WN has prided itself on how quickly it can turn aircraft, there is the capacity to operate way more than 12 flights/gate at DAL for both DL and WN.
It still doesn't change that if the DOJ allows gates to be sold to the highest bidder regardless of market concentration, then there are a whole lot of carriers that will be put out of business and the change in control of a whole lot of airports is at stake.
We can argue about the theory all day long but I appreciate that swamt is willing to put his name on the line behind his position.
Anyone else who would like to do the same is invited.
SWA did not set the requirements for the divesture of gates, this was done by the DOJ. AA has 85% plus of DFW (don't quote me on this exact number, read it somewhere) SWA has 80% of DAL, maybe this is why AA was told to divest the gates at LF, to put each airport at same level dominance by each carrier. WT just give it time to resolve itself, we will all know soon. But I will tell you what I have heard is happening. There appears to be legality issues with the way, or something to do with the sales of tickets by Delta. I do not have all the facts yet, and not even sure if it would preclude them from the bidding process. I also don't know if it will even become an issue, but there are talks about it currently going on, if I get more info I will pass along...
eolesen
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WorldTraveler
Corn Field
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and again, WN wants to run and hide behind the DOJ when it suits there need but they carried on lawsuits for endless years in the earliest years of WN. Somehow, it doesn't cross your minds that other airlines want to pursue legal challenges if they to ensure their ability to compete in the market.
I'm sure that the legal issues with DL's ticket sales are coming from WN trying to argue that DL has not right to sell tickets. The courts, if they are called into it, can sort it out but the fundamental issue remains that if it comes down to DL vs WN, there is absolutely no legal basis to argue that WN can be allowed to add to its gate stock at DAL when other airlines can and want to add service, regardless of what kind of carrier they are.
When you factor in that no one has yet to substantiate that any other else has expressed interested in serving DAL, then it becomes even harder to justify that gates should be reserved for either WN or another low fare carrier.
Again, the process is hasn't played itself out and I AM NOT SAYING THAT DL WILL SUE but I would be very surprised if DL allows the DOJ to grant the degree of access to low fare carriers including WN who will have offer more seats at DCA than UA does while saying that network/legacy carriers cannot bid on any assets, including at DAL.
You can talk about all of the gates that AA has at DFW or DL has at DTW or ATL but it doesn't change that there are gates available for new entrant airlines, regardless of what type of fares they charge. Federal law requires that type of access at federally funded airports and that principle would be completely violated if WN is allowed to dominate an airport to the exclusion of other airlines that want to and are willing to serve the airport.
E,
in terms of boardings DL is already only slightly ahead of Spirit. In order for B6 or VX to grow to a position to challenge DL, they would have to add a whole lot more service than they operate now.
If in your twisted view of making sure DL loses, you want to see someone else beat DL, you deserve what those carriers will do to AA - not at DAL but at DFW. There are already pretty strong odds that VX and B6 will both add further service to DFW and ORD using the slots they have gained which is not exactly great news for AA.
The whole outcome of this process was likely going to be that AA's top hubs would face significantly more competition which would hurt AA and UA.
I'm sure that the legal issues with DL's ticket sales are coming from WN trying to argue that DL has not right to sell tickets. The courts, if they are called into it, can sort it out but the fundamental issue remains that if it comes down to DL vs WN, there is absolutely no legal basis to argue that WN can be allowed to add to its gate stock at DAL when other airlines can and want to add service, regardless of what kind of carrier they are.
When you factor in that no one has yet to substantiate that any other else has expressed interested in serving DAL, then it becomes even harder to justify that gates should be reserved for either WN or another low fare carrier.
Again, the process is hasn't played itself out and I AM NOT SAYING THAT DL WILL SUE but I would be very surprised if DL allows the DOJ to grant the degree of access to low fare carriers including WN who will have offer more seats at DCA than UA does while saying that network/legacy carriers cannot bid on any assets, including at DAL.
You can talk about all of the gates that AA has at DFW or DL has at DTW or ATL but it doesn't change that there are gates available for new entrant airlines, regardless of what type of fares they charge. Federal law requires that type of access at federally funded airports and that principle would be completely violated if WN is allowed to dominate an airport to the exclusion of other airlines that want to and are willing to serve the airport.
E,
in terms of boardings DL is already only slightly ahead of Spirit. In order for B6 or VX to grow to a position to challenge DL, they would have to add a whole lot more service than they operate now.
If in your twisted view of making sure DL loses, you want to see someone else beat DL, you deserve what those carriers will do to AA - not at DAL but at DFW. There are already pretty strong odds that VX and B6 will both add further service to DFW and ORD using the slots they have gained which is not exactly great news for AA.
The whole outcome of this process was likely going to be that AA's top hubs would face significantly more competition which would hurt AA and UA.
WT, MY GOD, give it a rest until the results are announced. You can try and pan out everything that will happen, and give all of us your guess of what will happen. None of us really know what will happen. My bet with you is just that, a bet, no facts, just a bet that I hope my airline wins the gates, and you hope your airline wins the gates (or at least your previous airline--or is it?) Stop the micro-managing. Give it time to resolve into results...
WorldTraveler
Corn Field
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SharoninSAT
Veteran
700UW said:
And yet another article...
Some idle thoughts on Southwest Airlines plans at Dallas Love Field...
Dallas Morning News
- 02/04/2014 -
1. Why now?
We now know where Southwest Airlines plans to fly after the Wright amendment goes away on Oct. 13. But Monday’s announcement raises more questions in our mind.
Why announce the destinations, but not the fares and schedule? In other words, why whip up a frenzy for a product you aren’t selling, and won’t sell for at least three months?
Southwest officials made it clear last October, one year in advance, that they planned to have a year-long build-up to the day that airlines could fly nonstop out of Dallas Love Field.
So, did Southwest Airlines separate the announcement of the cities from the announcement of the fares and schedule so they could have another step on the ladder of rising excitement?
We don’t know.
We note that Delta Air Lines in December outlined its plans on how it will use the two gates it wants but doesn’t have at Dallas Love Field: 22 flights to six cities. In Southwest’s announcement, it said it would go to 15 cities, including three of the cities that Delta named.
Perhaps Southwest wanted to steal back the expectations excitement from Delta.
2. Will Southwest Airlines be able to undercut the prices of its big competitors? Will it be able to undercut the prices of the smaller, lower-cost competitors? Will it be able to offer lower fares past the early, promotional period
CEO Gary Kelly said with great confidence that the nonstop markets that Southwest will be entering have high fares and that Southwest’s entry will certainly bring down fares.
But a number of those markets already have low-fare carriers like Spirit Airlines, Frontier Airlines or Virgin America already operating and offering cheap fares out of nearby Dallas/Fort Worth International Airport.
Spirit, the biggest low-fare carrier at D/FW, typically only operates one or two flights to each of the cities it reachs from Dallas/Fort Worth Airport. So Southwest may offer a full day of cheaper fares to Spirit’s one flight of cheaper fares.
That raises the next question.
3. How busy will Southwest’s schedule be to the 15 nonstop cities it will add out of Dallas?
Southwest says it will go to 15 cities. If it operates a minimal schedule of three flights a day to each city, that’s 45 departures. That’s more than one third of Southwest’s daily schedule today at Love Field.
4. Will we see a Spirit-like strategy of only a flight or two to some of those cities, just to have Southwest’s presence on that route?
Or will we see a more aggressive schedule, like its six daily flights between Baltimore and Chicago or between Chicago and Phoenix, or nine flights between Phoenix and Los Angeles?
5. It will be particularly interesting to see the schedule from Dallas to New York LaGuardia and Washington Reagan National.
The takeoff and landing rights at those two crowded airports are precious. We can only imagine how much Southwest is paying to acquire the additional slots it is getting from American Airlines.
So is the best use of those slots to try to capture the business traffic from Dallas to New York and Washington? We’ll know Southwest’s assumptions when we see the schedule in May.
6. We see that the initial round of 15 nonstop cities did not include some major airports, including Boston, Seattle and the three Bay Area airports that Southwest serves – San Francisco, San Jose and Oakland.
Why not? Our guess is that Southwest doesn’t particularly own most of those markets, although it is the dominant carrier in Oakland and San Jose. So it stayed in markets that were either bigger or where it controls more of the local traffic.
...
On Mar. 3 we will announce the fares and open the schedule thru Oct. 31.
[SIZE=10pt] [/SIZE]Here are some of the signs that SW has put together for our ad campaign that bombards Dallas drivers as they
[SIZE=10pt] enter the airport.[/SIZE] There are at least a dozen billboards along Mockingbird Lane from Southwest with sayings like
"Wright is Wrong and Soon will be Gone", also "Let's Re-Wright the Rules on Love" and "Nonstop Love. All Flight Long."
Kev3188
Veteran
That may or may not make sense with a WB A/C, or even certain NB flights. For an RJ, that's more trouble than it's worth, and would actually be regressive.WorldTraveler said:
eolesen
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So, when I state the facts that DL will be more negatively impacted with WN's ability to now serve markets that DL serves in the #1 or #2 spot (e.g. DALDFW-ATL and DALDFW-LGA), it's a twisted view.WorldTraveler said:
Yet in the same post you state your opinion that AA and UA will be hurt.
I guess that's your twisted view?...
WorldTraveler
Corn Field
- Dec 5, 2003
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Thanks, Sharon. I think the most accurate statement in your article is that WN didn't want DL to steal the thunder with its announcement of new service.
DL announced its schedule as a continuation of its ATL service which it has operated for several years plus service to DTW and MSP which WN has chosen not to serve. Even if DL only served those 3 cities, they can't do it with one gate. LGA and LAX which are duplicated cities that WN says it intends to serve, even though DL announced them first, do not constitute half of the flights that DL will serve. The ATL, MSP, DTW flights are more than half of DL's schedule.
DL's announcement also undoubtedly shows that DL intends to have very high gate utilization and that they also will push flights thru the gates during the peak morning hours very quickly.
Kev,
I agree with you that there is no value in pulling planes off the gate if they are going to turn. The point is that if there is some slack in the schedule where planes do not turn immediately around (including overnight) DL could unload planes and pull them back for loading. If you look at the morning startup schedule, they clearly are planning to RON 5 or 6 flights at DAL which means they will be pulled up and loaded in the a.m.
My point was that when those planes start arriving in the evening without departures, those planes could be unloaded fairly quickly and pulled offline, allowing WN to use the gate for a departure as long as DL has a gate to use for its arrival. There are also some holes in DL's schedule in the mid-morning after DL's morning flights all leave and before the first arrivals come in.
I support using scarce airports efficiently and DL and WN will have different gate usage patterns based on the destinations they serve. But that kind of cooperation goes both ways and it isn't just about DAL. If WN wants to pull "this is mine and you can't come near it" then DL can do the same not just in DAL but at other airports. DL has been used to gate sharing and operating from common use gates for years. It is the norm in most int'l airports.
E,
I'm not debating that a stronger WN has the potential to push DL further down in rank in the Metroplex. But I am saying and there is ample evidence to show it that DL is stronger in the Metroplex than perhaps it has ever been in the markets it serves relative to AA. DL has long been number one in the local market in ATL-DFW but has recently overtaken AA in DFW-SLC, DFW-MSP, and DFW-DTW even though in several of those markets AA offers more capacity and has the larger hub. Further, WN is not planning to fly to any of those cities based on what it has announced. Even in DFW-LGA, DL now has 20% or more of the market share, again even though AA has far more capacity. In each case, DL's average fares are at or above what AA gets so the notion that DL is winning the market with low fares is not accurate.
Given that DL's market strength has long been outside of DFW while AA and WN will both be competing for the same DFW local market, the chances are indeed much stronger that AA and WN will be competing more for the same passenger while DL will compete at the other end of the routes.
DL announced its schedule as a continuation of its ATL service which it has operated for several years plus service to DTW and MSP which WN has chosen not to serve. Even if DL only served those 3 cities, they can't do it with one gate. LGA and LAX which are duplicated cities that WN says it intends to serve, even though DL announced them first, do not constitute half of the flights that DL will serve. The ATL, MSP, DTW flights are more than half of DL's schedule.
DL's announcement also undoubtedly shows that DL intends to have very high gate utilization and that they also will push flights thru the gates during the peak morning hours very quickly.
Kev,
I agree with you that there is no value in pulling planes off the gate if they are going to turn. The point is that if there is some slack in the schedule where planes do not turn immediately around (including overnight) DL could unload planes and pull them back for loading. If you look at the morning startup schedule, they clearly are planning to RON 5 or 6 flights at DAL which means they will be pulled up and loaded in the a.m.
My point was that when those planes start arriving in the evening without departures, those planes could be unloaded fairly quickly and pulled offline, allowing WN to use the gate for a departure as long as DL has a gate to use for its arrival. There are also some holes in DL's schedule in the mid-morning after DL's morning flights all leave and before the first arrivals come in.
I support using scarce airports efficiently and DL and WN will have different gate usage patterns based on the destinations they serve. But that kind of cooperation goes both ways and it isn't just about DAL. If WN wants to pull "this is mine and you can't come near it" then DL can do the same not just in DAL but at other airports. DL has been used to gate sharing and operating from common use gates for years. It is the norm in most int'l airports.
E,
I'm not debating that a stronger WN has the potential to push DL further down in rank in the Metroplex. But I am saying and there is ample evidence to show it that DL is stronger in the Metroplex than perhaps it has ever been in the markets it serves relative to AA. DL has long been number one in the local market in ATL-DFW but has recently overtaken AA in DFW-SLC, DFW-MSP, and DFW-DTW even though in several of those markets AA offers more capacity and has the larger hub. Further, WN is not planning to fly to any of those cities based on what it has announced. Even in DFW-LGA, DL now has 20% or more of the market share, again even though AA has far more capacity. In each case, DL's average fares are at or above what AA gets so the notion that DL is winning the market with low fares is not accurate.
Given that DL's market strength has long been outside of DFW while AA and WN will both be competing for the same DFW local market, the chances are indeed much stronger that AA and WN will be competing more for the same passenger while DL will compete at the other end of the routes.
eolesen
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That's where I think you're wrong.
There's little question AA loyalists with elite status will stick with AA.
There's always going to be some percentage of the local market who flies the underdog because they can't stand the dominant carrier. It's how F9 has survived in DEN all these years. Those folks are going to be more prone to fly UA or DL out of DFW today, and probably more likely to switch to WN. It's a small percentage of the total market, but I'd guess a much bigger portion of DL's current share.
That leaves the loyalists who love WN yet also fly on AA out of necessity. The conventional wisdom says they'll all move, but I'm not so convinced. They *may* move, but there's a big difference between WN's product on a one-two hour flight and a flight that's 3+ hours. I'd say AA has a better chance of retaining those folks who see the value in upgrades and assigned seating on the longer flights.
For those with no loyalty, frequency tends to determine who owns the business traffic.
WorldTraveler
Corn Field
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the primary purchase driver for nearly any service is price.
People support 2nd tier carriers like F9 because of price. F9 would have never been able to become established in the market if UA had sat on them... and it is precisely because WN had a huge cost advantage with its fuel hedges that other carriers did not have that UA was able to aggressively grow into markets that were dominated by network carriers including UA.
DL's market strength is on the opposite end of the routes it competes with AA on. It is no surprise that DL's growth in LGA-DFW has come as its overall strength in NYC as a whole has grown relative to AA. It is precisely for that reason that DL has been able to acquire 20% of the LGA-ORD and now pushing 40% of the LGA-MIA market.
AA and WN do compete for a different type of passenger and AA does have advantages with some types of passengers for whom a global carrier with first class products are important.
But the Metroplex market is what is being divided with the fall of the WA, not ATL, not LGA, and not Chicago. Further, there are far more markets that WN is adding from DAL on which AA has no network carrier competition from DFW than there are market such as what DL intends to add from DAL that are duplications of what is served from DFW.
Finally, those who argued that Spirit, JetBlue, and Virgin America would not be able to take share away from AA would do well to look at the most recent share statistics. NK came into the market by growing it with very low fares but they are now very much taking share from AA who is having to lower fares in order to retain share. AA at DFW isn't the only carrier that is facing the same challenge by NK but it does show that they do have the ability to reach enough frequency in a market - and they have reached that in a number of DFW markets - where AA's ability to retain its customers is being challenged.
After years of being the most heavily monopolized large domestic market in the US, N. Texas is now becoming very competitive and it is precisely the above average fares that are attracting so many low fare carriers and which will provide plenty of headroom for WN to use to profitably take a signiifcant portion of the local market, just as they have split MCI and STL revenues with AA when they entered those markets from DAL.
People support 2nd tier carriers like F9 because of price. F9 would have never been able to become established in the market if UA had sat on them... and it is precisely because WN had a huge cost advantage with its fuel hedges that other carriers did not have that UA was able to aggressively grow into markets that were dominated by network carriers including UA.
DL's market strength is on the opposite end of the routes it competes with AA on. It is no surprise that DL's growth in LGA-DFW has come as its overall strength in NYC as a whole has grown relative to AA. It is precisely for that reason that DL has been able to acquire 20% of the LGA-ORD and now pushing 40% of the LGA-MIA market.
AA and WN do compete for a different type of passenger and AA does have advantages with some types of passengers for whom a global carrier with first class products are important.
But the Metroplex market is what is being divided with the fall of the WA, not ATL, not LGA, and not Chicago. Further, there are far more markets that WN is adding from DAL on which AA has no network carrier competition from DFW than there are market such as what DL intends to add from DAL that are duplications of what is served from DFW.
Finally, those who argued that Spirit, JetBlue, and Virgin America would not be able to take share away from AA would do well to look at the most recent share statistics. NK came into the market by growing it with very low fares but they are now very much taking share from AA who is having to lower fares in order to retain share. AA at DFW isn't the only carrier that is facing the same challenge by NK but it does show that they do have the ability to reach enough frequency in a market - and they have reached that in a number of DFW markets - where AA's ability to retain its customers is being challenged.
After years of being the most heavily monopolized large domestic market in the US, N. Texas is now becoming very competitive and it is precisely the above average fares that are attracting so many low fare carriers and which will provide plenty of headroom for WN to use to profitably take a signiifcant portion of the local market, just as they have split MCI and STL revenues with AA when they entered those markets from DAL.
Glenn Quagmire
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"Memphis is a smaller community, it probably has smaller potential than the two examples I provided there, but we're going to pay very close attention to it," Kelly said in an interview in Atlanta.
"We're excited about being able to grow there and we'll do as much as we can. Cleveland, I think, is the same way."
Southwest has new opportunities to add flights after recently acquiring takeoff and landing rights at New York's LaGuardia and Reagan National Airport near Washington, D.C., that American Airlines Group (AAL.O) agreed to sell to settle a U.S. Justice Department suit challenging its merger with US Airways, which was completed in December.
The budget carrier also plans to start international service under its own brand this year - initially to Aruba, the Bahamas and Jamaica - as it completes the integration of AirTran and retires that brand.
"New nonstop flights from Southwest's base at Dallas Love Field are due to start in October when U.S. flight restrictions there expire.
With the new access gained in New York, Southwest has outlined plans to expand service between LaGuardia and Nashville, Houston Hobby, Chicago (Midway), and Akron-Canton, Ohio.
Kelly declined to comment specifically on where Southwest planned to add flights from Reagan National, but said that large- or medium-sized cities the carrier already serves could be targets."
http://finance.yahoo.com/news/southwest-looks-grow-where-rivals-203952640.html
"We're excited about being able to grow there and we'll do as much as we can. Cleveland, I think, is the same way."
Southwest has new opportunities to add flights after recently acquiring takeoff and landing rights at New York's LaGuardia and Reagan National Airport near Washington, D.C., that American Airlines Group (AAL.O) agreed to sell to settle a U.S. Justice Department suit challenging its merger with US Airways, which was completed in December.
The budget carrier also plans to start international service under its own brand this year - initially to Aruba, the Bahamas and Jamaica - as it completes the integration of AirTran and retires that brand.
"New nonstop flights from Southwest's base at Dallas Love Field are due to start in October when U.S. flight restrictions there expire.
With the new access gained in New York, Southwest has outlined plans to expand service between LaGuardia and Nashville, Houston Hobby, Chicago (Midway), and Akron-Canton, Ohio.
Kelly declined to comment specifically on where Southwest planned to add flights from Reagan National, but said that large- or medium-sized cities the carrier already serves could be targets."
http://finance.yahoo.com/news/southwest-looks-grow-where-rivals-203952640.html
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