I spent the beginning of this week at the Boyd Conference (aka International Aviation Forecast Summit), and while I was there, war broke out. Fortunately, this one didn’t involve North Korea. Instead it came from a place of, ahem, LUV. Southwest has decided that it’s time to declare itself the victor in a battle for California that has really just begun. Unlike a North Korean war where we all die, this one results in Californians getting a ton of flights and cheap fares.
We all know about the fights at the two giant California airports. Down in Los Angeles, the 5 biggest US airlines are all posturing for a piece of the pie. It looked like United was going to back off before, but with Scott Kirby at the helm, the trend has been reversed. Now United is fighting with American, Delta, Southwest and Alaska in a battle that will never be won by anyone.
Then, up in San Francisco, the fight between United and Virgin America escalated when Alaska took over and became more of a threat.
But these battles don’t seem to be what’s pushed Southwest over the edge. Nay, it’s the battle outside of those airports. Ever since Southwest took the place of PSA, it has been the de facto preferred airline for travel at mid-size California airports. Sure plenty of airlines can get travelers between LAX and SFO, but how many can fly you Ontario to Oakland or Sacramento to Orange County 6 times a day? There just hasn’t been a challenger in years. Now, however, Alaska is changing that, and Southwest is throwing down the gauntlet.
I had a one-on-one interview with Andrew Watterson, Chief Revenue Officer at Southwest, and I’m hoping to put that into a podcast soon. But Andrew’s speech to the conference was very interesting its own right. See, on Monday Southwest rolled out its latest schedule extension for travel through the Spring. In that release, Southwest rolled out a bunch of frequency increases in California markets as well as a whole slew of new routes, and Andrew crafted a presentation around this growth talking about just how important Southwest is to California, and vice versa. Here’s a rundown of those new routes.
|San Jose||Los Cabos||1 weekly|
|San Jose||St Louis||Daily|
|San Jose||New Orleans||1 weekly|
|San Jose||Albuquerque||1 weekly|
|Sacramento||Los Cabos||1 weekly|
|Sacramento||New Orleans||1 weekly|
|San Diego||Puerto Vallarta||2 weekly|
|San Diego||El Paso||1 weekly|
This doesn’t even take into account the frequency increases, but you get the point. You don’t see Southwest expanding in its stronghold in Oakland. (That Newark flight was seasonal and is now year-round while the Orlando flight is just once a week.) And you don’t see it in the two biggest markets either. Instead, you see it in the markets where Southwest is finally seeing a real competitive threat for the first time in years.
Alaska has made it clear that it wants to do for California what it’s done in the Pacific Northwest. Part of that is serving all the airports, not just the biggest. There has been a lot of growth lately with, I think, San Jose-Burbank as the most recent route Alaska has put out there. There’s a lot more coming.
Seeing this, Southwest has started making a lot of noise. Some of it is bluster, but there is a point to it. It helps remind Californians just how much service Southwest has in the state, in case they forgot. Adding these new flights just makes Southwest more useful in those cities. And that means it’s harder for Alaska.
Now if you ask Southwest, the airline will say that this is all about defending its turf in California regardless of the invader. When United launched Shuttle by United back in the 1990s, then-Southwest CEO Herb Kelleher likened it to a war. And now with so many airlines fighting for parts of California, you could pretend this isn’t just about Alaska, but it sure doesn’t look that way.
Alaska is the first airline to provide a threat of real competition in mid-sized California airports in some time, and Southwest isn’t messing around. This new competitive threat has awakened the airline, and now it’s not only beating its chest but it’s making moves, adding capacity. There’s obviously some fear here that’s making Southwest react so aggressively. That may, in a way, be a back-handed compliment toward Alaska. Southwest thinks the airline is worth taking seriously. And unlike a North Korean war, this is one where the common folks stand to benefit as long as it continues.