Southwest’s First Scheduling Moves at AirTran Give Us Insight Into the Merger Plans

Earlier this week, Southwest publicly announced its first schedule changes for its new AirTran on Southwest SteroidsAirTran subsidiary. The changes, though small, give us a lot of insight into how Southwest is thinking about its AirTran purchase. It’s actually kind of exciting.

When Southwest purchased AirTran, it had to make two quick moves. The first was the pull out of DFW. We already talked about that here. The second was to end AirTran’s regional partnership with SkyWest. SkyWest had been flying to smaller cities out of Milwaukee, but that couldn’t continue under Southwest’s deal with its unions. (And Southwest probably wouldn’t have wanted to continue it anyway.) So it disappears on September 6, but unlike the DFW decision, this one opened up more questions. Would Southwest try to continue serving some of those cities served by SkyWest or would it walk away? Now we know. Here’s what will happen on September 6. All of these are to/from Milwaukee:

Destination Daily Flights Today Action

Akron/Canton 2 Replaced with two daily AirTran 717s

Des Moines 2 Replaced with two daily AirTran 717s

Indianapolis 3 Canceled

Omaha 3 Canceled

Pittsburgh 3 Canceled

St Louis 3 Replaced with two daily Southwest 737s

So why do I say this is exciting? Because there’s a lot we can take away from this.

First, it’s important to know that SkyWest was flying these flights at its own risk. It shared revenue with AirTran, but AirTran didn’t have to reimburse SkyWest for costs. SkyWest had planes sitting on the ground and thought this would be a good use for those airplanes. Why is it, then, that Southwest/AirTran ends up canceling those markets with more flight frequencies? Wouldn’t you expect those to do better? Not exactly.

The difference is that Indianapolis, Omaha, and Pittsburgh are already in the Southwest system. You can fly Southwest from those cities and connect to just about any other city in the Southwest network. In other words, SkyWest was bringing people into Milwaukee and connecting into a hub operation on AirTran. Southwest no longer needs that because it already has ways to flow those people into the Southwest system.

Akron/Canton and Des Moines, however, do not have Southwest service yet. In fact, these had been two hotly-debated cities. How (if?) would Southwest continue to serve them after the merger? That fact that Southwest has decided to upgauge these flights to be on 717s is good news for them. And it shows that Southwest really does want to use those 717s to open up mid-size markets that it doesn’t serve today.

I actually wouldn’t expect these cities to necessarily keep service to Milwaukee in the long run. Today, the only other AirTran flight in Des Moines is a weekend service to Orlando. Without Milwaukee, Des Moines is an island. Akron/Canton is different with a lot of service up and down the east coast. But Milwaukee is the only real gateway to the west (unless you head south to Atlanta first).

Once the Southwest and AirTran systems merge, you might see that shift to Chicago/Midway because Southwest can flow more people into the system that way. That’s a powerful thing and it should allow the airline to serve some of these smaller cities in a way that AirTran couldn’t alone. This makes it clear to me that Southwest wants to stay in those markets. That’s what’s exciting.

St Louis seems like a different story to me. Southwest has slowly been ramping up in St Louis since American pulled down. This is just another route that Southwest probably thinks can work now so it has put some airplanes in there. It will also start flying Milwaukee to Denver once a day to complement AirTran’s single daily service. So we might be seeing the beginnings of an aircraft routing optimization project.

In the end, this is great news for Southwest loyalists who want to be able to fly to smaller cities. It’s also great news for the small to medium-sized cities that have been trying to attract Southwest for years.

[Original photos via Flickr user wbaiv, Flickr user cliff1066™, and Wikimedia Commons/CC 2.0]

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