What it Means When Southwest Says It Has De-Hubbed Atlanta

When Southwest bought AirTran way back in 2010, all eyes were on Atlanta to see what the airline would do there at AirTran’s homebase and biggest hub. What followed was months of shrinking, but now Southwest has moved on to phase two. It is de-hubbing Atlanta. That sounds radical, but, uh, what does it really mean? Let’s take a look.

The new de-hubbed schedule goes into effect in November, so I looked at a Monday in December and compared it to a similar day in December 2009, before the merger, to show what’s happening.

When Southwest took over AirTran, there was hope that this meant the combined airline was going to be able to use the AirTran 717s to serve smaller markets. Instead, Southwest shipped those off to Delta for cheap and shrunk the AirTran system dramatically. You can clearly see the results of that first phase in this chart:

Southwest Shrinking in Atlanta

I included one summer date in there just for comparison purposes. AirTran was always a highly seasonal airline, so I thought it was interesting to show. But if we look at the December before Southwest took over, AirTran was running 199 daily flights to 51 destinations from Atlanta. By this December, Southwest will have shrunk Atlanta departures by more than 20 percent, dropping the hub to only 156 daily departures.

At the same time, it has shed a net of 7 cities. But that destination count isn’t exactly telling the whole story. Most smaller cities in the US have been dropped while some growth has occurred in the existing Southwest network and to the Caribbean.

I thought the shrinking work was done, but I was wrong. In this new schedule, Southwest decided to end service to another three smaller cities from Atlanta: Buffalo, Pensacola, and very interestingly, Memphis. (They’ll still be in the Southwest network, just not from Atlanta.) Instead, Southwest has added nonstops to Hartford and Oklahoma City.

I was surprised to see Memphis lose that flight. It’s not so easy to compete against Delta when that airline’s costs have dropped while Southwest’s have risen. But that’s not the point here. The point is to talk about what this whole de-hubbing thing means. Let’s take a look at a cross-section of a day in Atlanta:

Southwest AirTran Hub Departures

As you can see, the distribution of flights has changed dramatically. Previously, AirTran was set up to be able to fill more flights by flowing more people through Atlanta. That’s why nothing left before 8a; there needed to be time to get people from other cities into Atlanta to fill the flights out. (During the summer, there were earlier flights.)

You can see the big banks were in the morning and late at night. Southwest has changed that around. Now mornings are still busy, but you see a more even distribution through the day. However, that late night hub has basically been dismantled. AirTran used to have 24 flights departing after 930p. Now there will be 4.

That probably means reduced aircraft utilization, and that means costs will rise. Delta must love that. But it also means that Southwest is scheduling flights to be at times that are more attractive to travelers in Atlanta itself. And Delta doesn’t like that.

Keep in mind, this doesn’t mean Southwest is abandoning connecting traffic. When Southwest bought AirTran, 60 percent of Atlanta traffic was connecting. Southwest expects to see Atlanta connections drop to 40 percent of the total traffic in Atlanta, similar to what’s in Chicago and Baltimore. So Southwest is still going to take a huge amount of connecting traffic – it’s just not scheduling for it anymore.

It seems like that should make sense – local traffic has long been more lucrative than connections. Connecting traffic has become more valuable, however, thanks to consolidation and rising fares. But the valuable connecting traffic is coming from smaller cities for the most part. And those are the cities that Southwest abandoned when it bought AirTran.

So Southwest is focusing on local traffic and flight times in local market will generally get better. There are now early morning flights to places like Washington/National and New York/LaGuardia; that makes day trips for business easier to accomplish. In theory, it should mean business travelers in Atlanta will now be more likely to use Southwest if they like Southwest’s product offering, oh, and if they don’t need to fly to smaller cities that have now been abandoned.

Looking at the big picture, this whole “de-hubbing” means that Southwest took what AirTran had built in Atlanta and then dismantled it. It then rebuilt Atlanta to look like every other focus city in the Southwest network. So why did it need AirTran in the first place? Well, it’s a lot easier to build an operation with only one big competitor in town instead of two. It’s the same exact thing we would have seen in Denver if Southwest had succeeded in buying Frontier.

In Atlanta, Southwest saw opportunity, but it couldn’t make it work with a much lower cost carrier in the market. So it decided to buy it and effectively shut it down, making way for its own operation.

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45 Comments on "What it Means When Southwest Says It Has De-Hubbed Atlanta"

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Don
Guest

Whileb this all seems to be fitting in nicely with Southwest’s model; it also seems to be great for smaller airlines come in and compete. I wonder if Virgin America or jetblue can come in to Atlanta. Basically they would have to be concerned with Delta.

Juan
Guest

Why would this be great for smaller airlines. Delta and Southwest will still have the major cities covered. When did airline like JetBlue and VA become interested in the smaller markets dropped by Southwest?

barry
Member

There is a sour taste in the mouth of a lot of Atlanta business travelers where Southwest is concerned. Many business travelers loved Airtran because the business class product. It was very easy to get a business class seat if you fly regularly. It will be interesting to see if Southwest attracts the business market in Atlanta.

TimH
Member

Also, for what it’s worth: Although there’s 20% fewer departures from Atlanta, there really might not be 20% fewer seats, given that you’re probably moving to a lot of 143 seat 737-700’s instead of 117 seat 717’s – a 22% increase in seat count. Doing THAT math, and with Southwest expecting less connecting traffic, they’re actually planning on having MORE people flying to/from Atlanta (as an origin/destination) than AirTran had.

Bill from DC
Guest

That’s a great point. Would love to see a comparo based on capacity instead of departures.

barry
Member

There is a comparison. If you have the time to listen to the hour long Southwest quarterly conference call, they candidly go over all of the stats concerning Atlanta and the changes that will happen in November.

Oliver
Guest

Another post that provides great insights. Nothing better than five minutes at Cranky Air Travel University early Monday morning.

David SF eastbay
Member

One thing about WN is with their many connecting points/forcus cities/hubs (whatever they are considered) there is more connecting options which can please more travelers.

Also in Atlanta while DL is the big guy in town not everyone may like dealing with DL. The bigger they are, the more problems-crowds-unfriendly workers-etc the traveling public must deal with. People might be willing to switch to WN even with connections if the overall travel experience is better for them.

SEAN
Guest

Curious, how many regular readers here expected WN to do something else but efectively dismantle AirTran after buying them? It was really the only way that WN could gain entry into the fortrace that is the ATL.

Len
Guest

WN also seems to be shifting connecting traffic around to other focus cities. For example, ATL has lost Pensacola on WN, but WN just announced new service to BNA (Nashville) from PNS. This shows us that PNS remains a viable market, but WN just wants those passengers running through lower-cost BNA than high-cost, long-delay ATL. BNA is also more logically located in the WN network to connect those Florida travellers to wherever they are going, except maybe the northeast, which is not WN’s forte anyway.
Never underestimate Southwest.

Gary
Guest
Agree with Sean. a hub and spoke is not WN’s business model and any hope to the contrary…. Also, Cranky’s got a telling stat in the commentary: 60% of Airtran’s business in ATL was connection/thus 40% O/D. That should also tell you something. Hubs make money when the ratio is the reverse. Airtran was losing $$ with that split. No way WN was going to perpetrate that, even if it was inclined to modify its business model….which it is not. Same with the 717’s: WN will not add a/c complexity. They bought out a potential competitor, got the airport facilities… Read more »
Nick Barnard
Member

As I recall Southwest’s leadership was actually very interested in adding the 717 and having a smaller aircraft in which to serve smaller cities. But I guess Southwest’s culture/pigheadishness killed that idea.

bendav0314
Member
I was one of those really disappointed to see Southwest buy out AirTran. I liked the AirTran product and destinations as well as their low fare pressure on Delta. As we have seen WN is no longer a low cost carrier, so there really is no low fare competitor in the ATL market. I dislike the WN ‘cattle call’ boarding process and some of their other policies, so I won’t fly them unless absolutely no other choice – which leaves me with Delta and the smaller operations of AA, UA, and US. I would love to see Jet Blue try… Read more »
SEAN
Guest

It would seme at first glance that JetBlue should reenter Atlanta to compete with Delta & southwest as there’s a lot of demand to & from the northeast. But how much capasity could JetBlue add since there is nearly hourly flights to NYC, Washington & Boston by Delta & Southwest was having issues with pushback by US Airways in Philadelphia. Perhaps dynamics have recently changed?

DesertGhost
Guest

As the old cliche goes, “if it ain’t broke, don’t fix it.” This is just Southwest being Southwest.

Diego rodriguez
Guest

Cranky,

Did you see on airlineroute.net AirTran ir replacing southwest on some routes, such as hou to mci? What gives? Could southwest be testing bag fees? Or business class? Also, southwest is joining AirTran on some routes and vice versa. Why doesn’t southwest just replace airtran service with it’s own service?

DelAAyed
Guest

I think it has more to do with keeping the utilization up on the AirTran 717s. You can’t just keep pulling down routes, cities, and frequencies when you have 717 crews sitting around getting paid for nothing. Might as well throw them on something where they can add more capacity at a cheaper cost than WN crews. There’s no testing going on with these routes. They’re probably just trying to get something out of their planes and crews while it’s still “cheap”

Trent880
Guest

Finally some more capacity for that underserved local ATL market:-P I’d bet a dollar this ends up looking like WN in PHL in no time.

1js7371
Member
It already DOES look like PHL, Trent880. I think Southwest learned from their Philly debacle to NOT blanket an international fortress hub. Smarter to nibble at the edges and take what they want to feed their network, as a previous poster indicated. But keep this in mind: WN has almost 30 gates in ATL. I would not expect them to be under-utilized forever. What Mr. Cranky did not mention in his ATL analysis is that WN’s point-to-point replacement of hub-and-spoke operation in ATL will generate huge productivity gains, particularly in ground employees. In fact, 300 fewer ground employees will be… Read more »
tharanga
Guest

I wonder if a statistician would look at this and agree the flights are more evenly distributed now. i wonder what the standard deviation is, for the number of flights per hour. if you put the flights into 2-hour buckets instead of 1-hour buckets, maybe it’ll be more obviously even.

Consumer Mike
Guest

The only potential “silver lining” on the WN changes in service since the purchase of AIR TRANS is that cuting back and spreading out flights could improve the delays in and out of ATL during bad weather. I have missed many a connection due to summer/winter bad weather, which is why I still avoid ATL, if possible. Not worth the gamble.

Speech99
Member

My first time posting, so go easy on me! CF: if Southwests’ costs are higher, keeping it from playing the roll as a low fare airline, and now that we keep seeing routes dropped (I keep hearing RIC is next, when I’m in the airport), couldn’t that bring interest from Virgin or Jetblue? Plus, ATL is about to do their next long term plan. If they want to stay at the top of “World’s busiest”, wouldn’t they want more routes, too?