ATA Now Competing with Southwest

ATA, Southwest

Since Southwest helped ATA out of bankruptcy a few years ago, ATA has basically become Southwest’s testing ground.  For the most part, ATA now flies to Hawai’i, Mexico, and to congested airports like LaGuardia.  This allows ATA to feed their customers into Southwest’s network as well as bring new options to Southwest customers without Southwest having to take big risks.

The other day, ATA announced they would begin flights from Chicago/Midway to both Ontario and Oakland.  That seemed strange because instead of complementing Southwest, this actually competes with them directly.  Southwest doesn’t fly Chicago to Ontario nonstop, but on Chicago – Oakland Southwest flies nonstop six times a day.  Why would ATA want to do this and possibly jeopardize their relationship?

I don’t think they’re jeopardizing anything here, actually.  Most importantly, these are utilization flights.  ATA will fly into Chicago on the redeye and back west in the early morning.  Those are on planes that usually sit on the ground overnight before returning to Hawai’i.  This tells me that ATA is doing everything they can to reduce their cost structure, and increasing your flying is a great way to do that.  Besides, Southwest doesn’t fly redeyes, so they only are competing with a single early morning westbound flight and that’s not a big deal.
What does this mean for you?  Utilization flights like this often mean lower fares, and ATA is not disappointing.  Right now, you can fly between Ontario or Oakland and Chicago for $138 roundtrip on Tuesday/Wednesday/Saturday or $158 on any other day.  Take advantage of it while you can.

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3 comments on “ATA Now Competing with Southwest

  1. Are utilization flights really cost effective? I understand bringing in increased revenues, but do they really make money on the flights that have prices that cheap?

  2. Well it depends. If they aren’t passing up on a maintenance opportunity that will have to be done at another time, they can be quite cost effective. The idea at that point is that you only need to consider the variable cost of fuel, crew, and passenger service since everything else is paid for regardless of whether the plane sits on the ground or flies. From that perspective it starts to make more sense. Of course, $138 roundtrip isn’t going to get you anywhere, but those are hopefully limited to handful of seats and higher fares will be charged for the rest.

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