It looks like Southwest has decided to take a cue from the old school PR handbook by making a big splash over new city and route announcements while quietly slipping in cuts to other cities and routes. There are a lot of changes with the schedule for next summer and we’re really starting to see the AirTran merger impact. Some changes, like the new international flights, will be cheered while others including more small city cuts . . . not so much. Let’s dissect this.
Last Friday, AirTran (not Southwest) put out a press release announcing that it would pull out of five cities by next June. Four of those don’t have Southwest service so they will really be losing out on low fare service. I’m sure the timing of this announcement was not a coincidence – companies put out release on Friday with the hope that the news will be forgotten by Monday.
This strategy became quite clear when Sunday afternoon, Southwest announced it was adding a bunch of new routes to its network, including a lot of international. The talk was all around all the new things that are coming, but the new schedule also slipped in some bad news on some routes, with some big cuts. This wasn’t discussed at all, and while Southwest usually puts out a full PDF file with all changes, it opted not to do it this time. I’m not a fan of the new opaque strategy here.
The story you see picked up most is Southwest going international. I’ve seen headlines like “AirTran to add routes to Mexico, Puerto Rico” or “Southwest’s Airtran Adds New International Routes.” Great news indeed, but it’s too bad that people aren’t really looking at all the changes.
First let’s talk about the cities that AirTran will abandon. Three of those are small cities: Bloomington/Normal (IL), Charleston (WV), and Knoxville (TN). We’ve already seen four other cities lose out from this merger with Asheville (NC), Atlantic City (NJ), Newport News (VA), and Quad Cities/Moline (IL) going away in a previous announcement. I can’t imagine we’re done. I’d imagine that Allentown (PA), Branson (MO), Harrisburg (PA), Huntsville (AL), Lexington (KY), Pensacola (FL), Portland (ME), and Rochester (NY) are all very anxious right now. Hopefully some will stay in the network, but I would be surprised if all did. Southwest’s model just isn’t built to serve small cities the way AirTran’s was.
AirTran will also pull out of Miami and Washington/Dulles. In Miami, it’s a cost issue. That airport is absurdly expensive and has been involved in one debacle after another when it comes to building new infrastructure. AirTran had already cut back there on its own and Southwest is finally just pulling the plug, as it should. With Dulles, that’s a more curious announcement. Southwest will still fly there, but it hasn’t been able to grow the operation much at all over the years. You would think that Atlanta would be a likely connecting point in the new network, but I guess not. Neither of these are huge surprises, that’s for sure.
But all that was forgotten when on Sunday night, Southwest came out with the news about all its summer schedule changes. The big headline is the welcome news that Southwest is using AirTran to expand into Mexico and the Caribbean, as it has said it would all along. Here’s everything that coming into the network (some are seasonal changes). These are all AirTran except where noted.
- Baltimore – Branson (Saturday only), Los Angeles, New Orleans, San Francisco, and Seattle
- Chicago – Oklahoma City (on Southwest)
- Denver – Akron/Canton, Dayton, and New York/LaGuardia
- Ft Lauderdale – San Juan
- Houston – Kansas City, Raleigh/Durham, and Seattle (on Southwest)
- Las Vegas – Norfolk (on Southwest)
- Nashville – Seattle (on Southwest)
- Orange County – Cabo San Lucas and Mexico City
- San Antonio – Cancun and Mexico City
- San Diego – St Louis (on Southwest)
First things first. A hearty congrats to the mighty CAK (Akron/Canton) for not only holding on to AirTran service but seeing new, growing flights from the airport. I’ve always been a big fan of that airport, and this is yet another win. It means even more with other smaller cities losing service entirely in the merger.
Also, the Mexico stuff make a lot of sense in general. It’s about time that Southwest started tapping into that. And with Orange County just opening its customs/immigration facility this month, Southwest can finally serve Cabo from there, a market which should do very well. Not so sure about Mexico City from Orange County, however. I see Orange County as a great place for the rich and plastic to fly down to Mexican beach resorts. It’s not, however a big ethnic market and that’s more of what Mexico City needs. I’ll be interested to see how that goes, and I’ll be interested to see how Volaris, Southwest’s partner, feels about these moves.
Now Southwest would like you to think that this is it. No other big changes are happening in the network, but that’s not the case. Along with a roller coaster of frequency increases and decreases in a variety of markets (as usual), there are some routes going away. Some might be seasonal, but I bet not all.
Wondering where those slots are coming from to operate the new Denver – LaGuardia flights? Well, LaGuardia is losing AirTran’s Orlando flights. JetBlue will be happy to hear that one, and it will also be happy to see that Boston to Florida flights on AirTran are gone as well (Ft Myers and Orlando).
We’ll see the relatively recent upstart market of Milwaukee to New Orleans go away in the AirTran network. Southwest is cutting Albuquerque to Salt Lake as well as Midway to Islip. Islip continues to shrink as Southwest gets more traction at New York City airports.
So, while there is some positive news here that shows the direction of this merged airline, there is going to be some pain as well. In particular, the small cities left in the AirTran network should be really feeling nervous about the whole thing.
[Original photo via Flickr user dougtone/CC-SA 2.0]
Please not Huntsville! We are drastically under-served in my opinion. First Memphis, now Baltimore, which is one of the lowest fares to the Northeast. Hop on the train and your at Penn Station in 3 hours.
Is there no room for small cities in the Southwest model? Why not reduced frequencies on the 717?
Actually, Huntsville has performed horrendously in the AirTran network, so that probably would have been gone the second the federal funding for the route dried up. I don’t see any way that this city stays in the Southwest system.
But looking at small cities in general, there are a couple problems. Southwest’s costs are higher than AirTran, so many of those marginal operations become unprofitable. Also, Southwest has a model where it staffs its airports with its own people. You don’t see cities with 1 or 2 flights a day. It usually takes 7 flights a day to keep an airport going (with a couple exceptions).
It may have performed horribly but their presence sure has been good for the people of Huntsville.
Before Airtran showed up it was easily a better deal to drive to Nashville or Birmingham to fly because Delta, United, etc had ridiculous prices for Huntsville. As soon as Airtran showed up, everybody else dropped their prices so you could afford to fly from Huntsville…
Unfortunately, the people of Huntsville aren’t supporting the flight. Look at October, the latest month with passenger stats. AirTran boarded 7,508 people in Huntsville and had 7,633 arrive. AirTran has 2 daily 717s to Baltimore and 1 to Orlando. Those have 117 seats each, so there were 10,881 seats each way in October. That means only 69 percent of seats were filled going out and 70 percent coming back. That works if you don’t have low fares, but for a low fare airline, those loads are bad.
And that month was a good one, by the way. In September, it ran about 50 percent. August was even worse.
I wonder if part of the reason is that they fly into Baltimore and not Dulles or Reagan.
With the Army and NASA both here, a fairly large chunk of our travel is US Gov’t business related where the driver is convenience more so than price. In those cases, Airtran to Baltimore is probably not as attractive as US Air to Reagan or United to Dulles even though the latter two are at least twice the price.
Concurrently I bet the winding down of the shuttle program has impacted the business travel to Orlando.
It may not be viable to maintain the route but I will hate it if it means Delta, United, etc jack their rates back up. I’ll find myself driving to Nashville or Birmingham for vacation flights again…
Unfortunately, Southwest is not going to hang on to the 717’s that Airtran used on some smaller markets. Southwest is getting rid of those as they will be going to Delta.
Interesting how in the beginning Southwest said they would serve all Air Tran cities except for DFW. They seemed to have skirted the fact that they would have Air Tran drop all the cities that WN doesn’t want BEFORE only the Southwest name remains so they can still say ‘We kept all Air Tran cities’, yeah the ones that are left.
WN is way too late to PR; they’ll be absolutely destroyed by B6 and NK, who have lower costs and are already well entrenched, and arguably have much better products and PR network/schedule. I’m sure AS will sit on WN in Socal-Mexico as well, but from SNA WN may have a prayer. Will be fascinating to watch!
AirTran has been able to hold their own in Puerto Rico, so I wouldn’t quite discount them just yet. AirTran has a “decent” operation in Ft Lauderdale, so maybe we’ll see some connections thru FLL when you combine in the WN operation.
Spirit has downsized significantly, on FLL-SJU. They presently operate 2 to 3 flights a day, and at one point had 5.
Yes. Also the fact that they haven’t released a PDF with the changes is unusual and makes it seem like they don’t want the info to spread.
Also, FLL-SJU may have some help thanks to Southwest connection opportunities, so it’s not purely O&D.
The connecting opportunities are small and very low fare: STL or ORD-SJU can be had for $276 roundtrip, all in–it’s all about the local traffic, which starts around $215rt. FL has held its own in SJU because of its low costs–as soon as those are raised to WN levels, they’re going to be sitting ducks for B6 and NK. Think of it as BOS-Florida–WN has barely even touched that because they know they’ll be waxed by B6. If WN wants to be in SJU, it has to be in FLLSJU, but I don’t think they stand a chance to make any money.
Off topic, but what ever happened to Southwest’s partnership with WestJet north of the border? Any chance that with WN going international they might just make the move themselves?
The cities cut don’t really surprise me. They all are smaller population centers that aren’t a long drive from larger airports. It can’t be easy to consistently fill “mainline” metal on those routes. I despise CRJ’s but have to admit they make sense for many destinations.
That was called off awhile ago. Southwest wanted exclusivity with WestJet and they walked away.
And in view of the DEN-CAK announcement, if I were running Frontier, I’d immediately switch it to DEN-CLE. :-)
You mention ATL would be a major connecting point but Gary Kelly has said just the opposite. ATL will be O&D so that gate utilization can be maximized, meaning departures will come down from 220ish to 190ish and hub banks will go away. My guess is red-eyes are going away too, so US@CLT should be happy.
Connections can be routed over cheaper/gate-plenty airports such as HOU, BNA, STL, BWI and in general the rest of the Southwest network. Beefing up HOU and BNA is evidenced by the route additions announced. BWI just announced a $100 million expansion basically for Southwest.
I’m really surprised IAD didn’t work for AirTran but then again, people are really obsessed with Mileage Plus here in Washington.
Maybe now is the time for NK, F9, and B6 to swoop in to some of these smaller markets with their much lower cost base (NK and F9 have been trying already).
I don’t buy it. Midway connects half the passengers that go through for Southwest, and Atlanta will have a lot of connections as well. It’s not going to be designed the same way, but in the same way that Southwest connects Dulles into its network via Midway, I would have expected something similar in Atlanta.
You mentioned that you didn’t think this would be the last of the cuts—do you really think they are going to cut more cities? If so, what are they waiting for? Why wouldn’t they just do it all at once?
Great question. They’ve already had two rounds of cuts, so we know they don’t care about doing it all at one time. Maybe they think a bunch of smaller cuts will hurt less than one big one, but I feel the other way. Gotta rip that bandage off quick and get it over with.
They are smart for not listing cuts all at once. After the first round airports/cities must have thought they were safe. Now with this latest announcement airports/cities will get to thinking about it and maybe start throwing money WN’s way in forms of savings/incentives to keep them/Air Tran at their airport. It could be a win/win for WN to not give one giant list of cuts at once.
I would assume that airports have been throwing incentives at Southwest the whole time. This has always been the holy grail for airports – attracting Southwest service. None of those little guys are taking it for granted.
Also, not that Wikipedia is anything to go by, but the ROC page says WN is taking over FL flying as of 3 June 2012. Any news on this, or is this just pure speculation on the part of an over-eager editor?
Pure speculation. There are no public plans for that to happen.
I’m not holding my breath for Des Moines staying. I think SouthWest is allergic to flying in or out of Iowa.
I actually hold out hope for Des Moines. When Southwest had to kill off the regional flying out of Milwaukee, it replaced it in Des Moines with 2 AirTran 717s. So Southwest thinks there’s a market that will work there. I guess we’ll find out if it does after the 717 results start rolling in.
Thoughts on F9 or NK coming in and trying to fill the void left by FL/WN?
For instance, in a similar vein to DEN-GRR/MSN-DCA, could you see Frontier doing a DEN-BMI-MCO or maybe a DEN-PHF-MCO? Maybe Spirit could do FLL-BMI/TYS.
Just some rambling :)
Not as sure on Frontier since the airline’s strategy might not be as close of a fit, but for sure on Spirit. A lot of these small cities have service to Florida a couple times a week on AirTran. Spirit and Allegiant are the most likely candidates to fill that void.
CF, we need to work on your conjugations. It should be All y’alls. Unless SW is only routing one passenger over ATL…
Tho I do find it interesting on how WN decides to avoid competition on tight markets, like BOS/NYC to MCO.. Everyone cries that they’re a low fare carrier, but when push comes to shove, they’ll get out of the way of other LCCs…
Wow, that’s quite a conspiracy theory. Let’s be honest, do these cuts that Southwest wants to keep “hidden” really matter in the grand scheme of things? I mean come on, the 1 a day LGA-MCO is 1 out of 15 or 20 total daily departures from the NY area? And ABQ-SLC, or ISP-MDW? Who cares? If they had cut 20 trips from DEN or ATL or something and then not talked about it, I could support the cover up theory.
Conspiracy theory? I’d say that’s a little strong. These are simply PR tactics.
By putting out a press release from AirTran on Friday talking about the five cities losing service and then following that up with a press release from Southwest on Sunday talking up all the new service (and not mentioning one cut), it was a clear effort to steer the conversation.
Cranky, do you know how many of these new routes were subsidized? I know SNA was dangling subsidies for Mexico service, which I assume AirTran accepted.
I don’t know, but in general, Southwest isn’t big on subsidies. I think Panama City is the big exception. but if there were subsidies out there, I’m sure they’d be happy to take them. I still don’t think they’d dive in to a route if they didn’t think it would work on its own.
According to an article I read somewhere, there are three subsidies available for Mexico service out of SNA. Airtran took two of them. The third will be decided by the end of December. I wish I could remember where I read that.
A bit off topic, but…All the speculation I’ve read about FNT in light of the WN/FL merger says that the airport will lose WN service. I’m biased because I grew up in Flint, and I love Bishop Airport, which was recently remodeled and looks great. Therefore, I hope they can hang on to WN, even with its nearby service in Detroit. AirTran reportedly has operated profitably in FNT for years, so I hope WN doesn’t pull out. I know their business model requires that they profitably fly at least 7 or 8 flights a day, but am I crazy to think they couldn’t make this scenario work?
FNT-TPA 1x/day (even seasonally)
FNT-LAS 1x/day (2-3 days/wk)
That would be a pretty significant increase for an airport which has DTW just 75 miles down the road. Even if AirTran is profitable, Southwest has a higher cost level which might make its operation unprofitable at the same revenues.
The funny thing about FNT is this: DTW is the ONLY WN city without a direct flight to LAS.
So, why would FNT get a LAS direct flight, if DTW does not have one.
I have been watching this with great interest. Why? Because I live near MEM and have been looking for clues as to what WN will do with MEM, especially with the pull-down of DL in MEM. I would hope that WN will take advantage of the situation and significantly add to the paltry AirTran service out of MEM, but I am honestly looking for an elimination of MEM by WN as well.
MEM may have a bright future with WN. DL is pulling out of the A concourse, leaving quite a few gates free. MEM is well positioned regarding WN’s larger stations such as DEN, HOU, MDW, BWI and soon to be ATL. STL and BNA are probably too close to connect with MEM but there are advantages that can be tapped. If I were to hazard a guess, MEM is being looked at closely. It could go either way of course, but DL’s on the verge of turning MEM from a hub to a glorified S-Curve market, which will open the door for WN. 20+ flights a day or so is not an unreasonable expectation.
I am a bit surprised none of Airtran’s current cities got connections to Chicago Midway. Washington National, Charlotte, Memphis, Dayton, Flint, Akron/Canton, Rochester, Portland ME, Richmond, Harrisburg, Allentown, and White Plains all come to mind. Any particular reason why that might be? Is there a gate shortage there I do not know about?
It looks like the way Southwest is going to do this is to keep Southwest and AirTran separate. It will slowly bring pieces of the AirTran system under the Southwest umbrella over time. We’ve seen some cities connected from Atlanta that way, but the smaller ciites haven’t really been connected up yet. I’m sure it will happen (well, some of these will).
The gate situation at MDW is getting a bit tight as well Brett. There is room for some expansion, but it’s not possible at this time to merely add 2-3 flights a day from all of FL’s non-shared markets to MDW, though this would be ideal for some of the smaller stations. I’ve thought about the MKE situation and discussed this on the A-Net forum. WN “may” be looking at MKE as sort of Chicagoland North, to take some of the pressure off MDW and serving the Northern Burbs through MKE. If WN can serve LAX, BUR, ONT and SNA in the L.A. basin there’s no reason they cant do the same in Chicago/Milwaukee.
True, but you have to assume that there are frequencies in Chicago that could go away to existing cities to make room for others. They just pulled out two to Islip, for example.
But you’re right about Chicago-North. I just don’t know how much service Milwaukee can sustain.
MKE will sustain what WN wants it to, they can outgun F9. We shall see
Interesting how they consider ORF-LAS a new route considering they serve it now and previously announced it would end in early 2012.
any idea if Southwest will add direct flights from Nashville to/from Milwaukee? Right now they are all at least one stop/change of plane. Frontier is ending their direct flights on 5/31/
I wouldn’t get my hopes up. Everyone is cutting back in Milwaukee, but maybe with Frontier gone, Southwest will eventually see the value of adding one back.