Southwest’s latest schedule is out, and guess who is paying attention to Memphis? It’s not technically Southwest yet, but Southwest is using its AirTran subsidiary to add destinations and flights in Memphis. As one airline fades in the land of Elvis, another grows. The circle of life continues.
Back in December, I profiled the remains of Delta’s hub in Memphis which now has fewer than 100 flights daily. At the time, I said the cuts “should open the door even further for someone like Southwest to come in and bring fares down.” And that time has now come. Like a vulture feasting on the carcass of a rotting corpse, Southwest sees opportunity in the remains in Memphis. I don’t doubt that’s the case.
As of this summer, AirTran had scheduled only 4 flights a day between Memphis and Atlanta on 717 aircraft. In other words, it’s great if you want to get to Atlanta and you aren’t time sensitive. Sure, there are some connecting options, but it’s a very minimal presence. That changes on August 11 when AirTran adds 1 daily to Orlando, 1 daily to Baltimore, and 2 daily to Chicago/Midway, all with 717s. This looks a lot like a Southwest schedule, doesn’t it?
That’s why I was a little surprised to see this flown by AirTran, because it fits quite nicely into the Southwest service pattern. But now I get it. First, Southwest and AirTran just started limiting codesharing. It will be up and running soon on the rest of the system. So Southwest can really use AirTran as a trial balloon. Think about it. It can put a smaller airplane (717) into these markets so it has fewer seats to fill. Oh, and it can charge bag fees and change fees as well. So putting AirTran in this market lets Southwest test the waters to see if these routes are going to work out or not.
It would seem likely that they would work. Delta still has up to 3 daily mainline airplanes flying from Memphis to Orlando so that appears to be a good market. And while Delta doesn’t fly to Midway or Baltimore, it does fly to O’Hare and National. Still, the real point is that AirTran can connect people into the Southwest network at both those points anyway.
I would assume that this is just the start of what we’re going to see happen in Memphis. As Delta kills off its presence there more and more, that provides opportunities for others to come in. And while I don’t expect to see Memphis grow to the size of Nashville for Southwest, I imagine this is just the first of several new flights that the airport will see. Southwest doesn’t have a ton of growth opportunities in the US, so this should be a welcome one.
So will this now please all the locals in Memphis who crow about how awful and expensive Delta is? Nah. This gets those people to a few more places, but it’s not going to solve all their problems. It will, however, be very interesting to check in with them in 5 years to see if they’re happier at that point. They might have lower fares on some routes but they’ll have fewer nonstop destinations. We’ve seen this play out in many cities around the US.
By that point, I imagine Delta will have little more than flights to other hubs in the Delta system. But will others have replaced it with enough service to please Memphians? We’ll find out.
[Original Memphis Belle photo via Richard A. McGuirk / Shutterstock.com]
A good start for WN/FL regarding MEM growth, but few options heading west, yet. Won’t be surprised to see DEN and HOU sooner rather than later, but for the time being looks like a trek due north to MDW for any pax heading west of the Mississippi. Let’s hope today’s WN Atlanta announcement expands the code-sharing trial to more cities, if not system wide.
I am surprised DEN wasn’t in the first round as it is a big western connection point for WN
Could this cause Delta to pull the plug on the MEM hub altogether?
Or alternatively could it show Delta how to make it work once they have the 717s?
Seems like that plug’s already pulled. If 100 flights is a hub now, WN has 8-10 hubs despite claiming to have none.
Within the next year or two, MEM will have DL service to all hubs and probably a few focus city type places like DCA and MCO and a handful monopoly runs like AUS, BOS, FLL, LAX, MCI and MSY (but any of those would be likely dropped if competition arises). I think AA at STL is the benchmark here, maybe with a smidge more service to mid-continental destinations and a few more monopoly runs.
SEAN – I think this is just a drop in the bucket for Delta, though I wonder if it could impact the service on the Orlando route. Still, I don’t think this makes or breaks anything.
Ben – Even if AirTran can make this work using 717s, it doesn’t mean that it would work for Delta. Delta will have less density and higher costs than AirTran. And of course, the way Delta would use it would be different than Southwest as well.
“But will others have replaced it with enough service to please Memphians? We?ll find out.”
Let’s skip a step. The answer is No, they will not be pleased. The correct answer is that, probably like PIT and (maybe eventually) CVG, MEM will have a level of service much more proportionate to the market and will have better average prices to boot (in exchange for fewer flight options and nonstop destinations).
Sadly, the MEM local o/d base is too small to support so many flights. High fares + connectors or low fares + fewer nonstops is the tradeoff. Whether MEM likes it or not, we are entering the age of the mega-hubs, and the midrange cities just won’t cut it.
Bill from DC – I think it all depends. For those who want to fly solely to big cities in the Southwest network, this might be great. But for everyone else, maybe not. So it all depends upon who is making the most noise right now and if it appeases them. Of course, it’ll just change to someone else making the noise when they are unhappy.
Agreed, “noise” is directly proportional to level of unhappiness. happy people make very little noise.
I find it rather ironic that the aircraft Southwest / AirTran is using to expand in Memphis is Delta’s future Boeing 717s. Maybe Southwest shouldn’t have given up on the aircraft as quickly as it did?
Maybe they have different plans for a smaller aircraft. IMO the Dash 8 may be a future option to re-establish itself in smaller short haul markets.
As for the smaller aircraft–WN still has a lot of growth in it with 737s, especially if near-international flying happens with Mexico, Caribbean, and limited South America there are a good 20+ cities that WN could serve which should cover the pipeline for a decade or so. Additionally, WN pilots are very highly paid, so a smaller aircraft cost would magnify costs that much more. Even at the regional rates used by the majors, Southwest likely would not make enough money to justify the operational challenge.
The name of the game is profit, not cities served or marketshare.
I expect more 800s, maybe Max-9s in the future to reduce frequency on the trunk routes and lower CASM. A smaller airplane raises CASM and isn’t likely. IF they wanted to go for a smaller a/c, they would have kept the 717s. Jetblue didnt like the e190 because it holds 2/3 but costs closer to 3/4 of the a320 and there are other opportunities left. They are making the best of it, but Southwest won’t follow them down that path. Lastly, in the crazy scenario where they did, they would use a larger RJ than a Dash-8.
Profit and market share are not mutually exclusive. One thing I’ve read in the past and also been told by Alaska Airlines’ sales rep is that the q400 is very efficient and has a low break even point in short haul markets – a market which is the root of Southwest’s success and they are slowly abandoning it bit by bit.
The Q400 is flown by Horizon at Horizon rates which are much lower than mainline Alaska rates.
The 717 is an excellent airplane to open a market. Just like how Jetblue starts many routes with e190s then up-gauges after a month or two, WN is doing the same thing here.
It takes time for a market to ramp up, so if you can start at lower costs (717) it makes more sense for those initial months. Also, the market already knows Airtran service, so their name works well, and it doesnt tie up AirTran 737s that could be repainted or reserved for international service.
If things work out Southwest can just swoop in with it’s own bigger jets and name. If things don’t work out, they have an easy out by ending the service saying the 717’s are being removed from the fleet so they can’t serve MEM any longer.
@Dave–excellent thought about giving themselves a way out with the 717
David – But do you really think the locals would fall for that? I mean, Southwest announced the 717s were going away long ago, so it would require a silly amount of spin to try that.
Well if locals don’t fill up the smaller 717’s, WN can say they can’t put in bigger 737’s so some routes or the whole city would have to go.
“But will others have replaced it with enough service to please Memphians?” I doubt it.
Funny how when Delta cuts back at MEM, Southwest jumps in almost immediately, but when Delta cuts back at CVG, no one responds at all (except for one measly Frontier flight several years later).
Any ideas what accounts for the difference?
Does this count as immediately? DL has been slowly winding down MEM for years.
Jim – I think it helps to look at what service Southwest has surrounding Cincinnati already. It serves Louisville 1.5 hours to the southwest, Indy 2 hours to the northwest, Columbus 2 hours to the northeast, and now with AirTran, Dayton which is more convenient to Cincy northern suburbs than CVG is. From Memphis, however, only Little Rock to the southwest is within the 2 hour range. So Southwest has a much bigger catchment to service there than it does in Cincy.
CVG’s biggest non-DL problem has always been its location.
1. Isn’t “carcass of a rotting corpse” redundant?
2. Love the Memphis Bell graphic, but doesn’t it subtly imply you expect Southwest to bomb?
Arcanum – 1) I actually changed it before publishing but then just liked the imagery better with the redundancy. So, yes.
2) Well, that’s one way to look at it. But of course, the bombs are being lobbed against others.
Presumably Delta :)
I’m glad to see AirTran serving the MEM – BWI segment. My question, however, is: how is SWA determining which routes to keep as AirTran vs SWA? Is it based on DavidSF eastbay’s contention that the smaller 717 gives them a chance to test the market? Ultimately, will SWA be set as the domestic carrier and AirTran international?
Ultimately, AirTran will not exist and everything will be Southwest. But it could well end up that the last pieces of AirTran to become Southwest are the international markets, depending on how long it takes Southwest themselves to get everything in place to handle international flights.
I live in Memphis and use miles for travel. We just got the companion pass for SW last week and hope it will fall into play soon in Memphis! For low cost carrier we use Airtran and for miles usage also. We use United and AA for longer more city fares. I have flown on Delta once with Alaska partner miles. Come on companion pass for MEM!
This will be interesting. The last time someone came into MEM like this was Frontier with nonstops to DEN, LSV, and MCO. Northwest came back and chased them out by giving the tickets away. I’m curious on how DL will react. I checked the DL Site, and put in trips from MEM to BWI, ORD, and SAT. I did SAT because it is similar in distance to at least BWI. The dates were mid-Sept. Roundtrip to ORD with Non-stops and BWI with connections was $225 for either city. SAT with nonstops $450. This makes me wonder is MEM a poor O/D because of high fares, or does it have high fares because it is a poor O/D?
True but there are some major differences – that was a long time ago, MEM was much more fortress-y for NW than it is for DL right now and, possibly most significantly, that was done by Frontier, not Southwest.
Is this a case of Southwest just not knowing what to do with the 717s and just doing something with them?
Its nice now, but this can’t be an ongoing strategy since they’re getting rid of the 717s.
Probably a stop-gap measure until the integration is complete. Also a good way to test the markets. My concern going forward for WN is that they can’t operate anything smaller than the 73G with their creeping costs. So many shorter flights they’ve operated for decades in some cases have disappeared I wonder if they could ever operated C100/300 profitably without major contract changes. Opens the door for a lower cost carrier to pop up on some of these markets.
I would think, if they’re just doing utilization flying and trying to park them somewhere, they would use them on a short haul, high frequency route like intra-California or expand frequencies on a mid-level trunk route that is 4-8 daily getting expanded 6-10 for more flights with same number of seats.
It makes more sense to use them to open/prove routes before the traffic materializes. They will likely stay in AirTran cities as they are not configured for all coach or in WN livery or operated by “WN” crew.
@Cranky–what happens to the 717 pilots at AirTran when the planes leave? Will any go to DL with the planes? Do they get converted to the 737?
Noah – As far as I know, they are staying with Southwest but will have to go to the 737. I’m not entirely sure what that means for 717 captains, however. I don’t know if they could get bumped to the right seat on the 737.
It’s been many, many moons since I paid close attention to specific routes. I suppose this means quite some time ago the Memphis – Amsterdam flight was dropped by NWA, eh?