Today’s Special: Southwest Surprise

Schedule Changes, SFO - San Francisco, Southwest, Virgin America

Trying to predict Southwest’s future destinations is a time-honored tradition practiced by just about everyone in this industry. Most recently, Denver and Philadelphia were unexpected and left people scratching their heads at this new strategy of flying to big city airports.

Even considering that past history, I don’t think anyone could have predicted today’s announcement that the airline would return to San Francisco (SFO) in the Fall. This one is the most surprising of all.

Back on March 4, 2001, the airline packed up and left the airport. At the time there were 14 daily flights to only Phoenix and San Diego, but the combination of horrible delays, gate constraints, and high costs made them decide it wasn’t worth it. They said that they would serve the Bay Area through San Jose and the much larger operation at Oakland.

Well today they’ve decided to come on back to town. Reading the release alongside this SFGate article and this Inside Bay Area article makes it clear that costs have come down enough to make it attractive again. In addition, they say there is enough gate space. The long term plan to renovate the old international terminal (now Terminal 2) means there are growth opportunities in the long run. But how is on time performance doing?

Well thanks to the DOT, we can pull this info up fairly easily.

sfoontime

As you can see, on time percentage bottomed out at around 60% for the year 2000. It’s no wonder the airline pulled out in early 2001. But you can see that the numbers began to rebound. Of course after 9/11, there were a lot fewer flights so being on time was a lot easier.

Now look where we are today. The number of flights rebounded in 2006 so that there were only 2.5% fewer flights than in 2000. That comes out to about 9 fewer flights per day on average. Yet the airport still was able to achieve a 70% on time arrival rate – 10 points higher than in 2000.

Why exactly is Southwest doing this? I’m not entirely sure, but it’s probably a competitive move. Frontier has expressed an interest in expanding in San Francisco. Its flights to Las Vegas are said to be doing well while its flights to Los Angeles struggle. Still, this seems to be a pretty clear sign from Southwest that they’re going to play hard. Alaska has also said it wants to expand further in California, so this could be a hint to them as well.

I’m not so sure this says anything to JetBlue. That airline has effectively abandoned its plans to expand in the West unless it connects into the east coast network. I wouldn’t expect to see Southwest flying the long hauls from here, at least not in the beginning. In fact, they said they’ll probably have 12 to 14 flights at the beginning. I’d put my money down on Vegas, Phoenix, San Diego, and Chicago/Midway. They should be able to coexist with JetBlue. I also don’t think this is a message to United or American either.

The big loser here? Well it very well may be Virgin America. Now JetBlue, AirTran, and Southwest will all fly to San Francisco. JetBlue and Southwest also fly to Oakland and San Jose. I think they’re trying to build a case that there isn’t a need for another airline in the Bay Area, because they are already providing low fares and good service. It’s true they don’t have the cool inflight entertainment that Virgin does, but that doesn’t motivate the DOT. The DOT wants low fare competition from majority US-owned airlines. If there already is low fare competition, I would think they’d be less likely to revisit Virgin America’s application, especially in light of the ownership issues so far.

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