Southwest Gets Aggressive While Others Can’t

Southwest

We all know the story about Southwest. It came from nothing to become the most consistently profitable and beloved airline in America. All of that goodwill — along with all that cash — has been built up year after year, just waiting for a time when Southwest would need to dip into it. That time has arrived.

While the other large airlines in the US struggle with how to survive as much smaller entities in the future, Southwest has been following a different path. Last week, it announced its November/December schedules, and guess what? By the end of the schedule, the airline will be flat or above last year’s capacity.

This sounds insane considering that the Big 3 US airlines have said they expect to be about 30 percent smaller for the forseeable future. But Southwest has real advantages over the Big 3, and the airline appears poised to flex those muscles while the others can’t.

Sure, travelers love Southwest, and yes, the airline has a lot of money stored up. That has enabled it to cut capacity less than the other airlines. It hasn’t pulled out of a single airport, and it has built remaining frequencies to maintain connectivity in most markets. In a time where no airline has network consistentency, Southwest is about as close as it gets.

Beyond that, Southwest has structural advantages. It flies an almost-entirely domestic network, and everyone agrees that domestic travel will rebound first. In fact, domestic may surge as people shun foreign destinations for the comfort of not having to worry about travel bans or other restrictions foiling a trip.

On top of that, Southwest has, as usual, gotten lucky. The airline made a decision before this mess to start participating fully in Travelport and Amadeus global distribution systems (GDSs). This costs money, but it will also help Southwest get a bigger share of the now-smaller business travel pie. Even though leisure travel should rebound first, Southwest should be able to get more of whatever business travel remains.

With this positioning, Southwest could play it conservatively, but this latest schedule shows that is clearly not in the cards. Let’s start with a look at which cities are seeing more than 5 additional daily departures this Nov/Dec vs last, thanks to Diio by Cirium.

From November 1, Southwest has said it is zeroing in on four primary cities where it will focus its growth: Denver, Las Vegas, Nashville, and Phoenix. Sure enough, the data reflects that.

What do these four cities have in common? Chief Commercial Officer Andrew Watterson explained to me that these markets all have an existing, strong customer base. They also have a good mix of business — which they hope to capture more of, as discussed — and leisure — which is likely to rebound first.

I’ve heard from people at multiple airlines that demand is much better in the middle than along the coasts. That’s probably a mix of seeing coastal cities hit harder by COVID-19 and generally stronger beliefs on quarantining by populations in those areas. This would certainly help explain Southwest’s focus, but that isn’t everything. This has to also be about opportunism.

Take Phoenix, for example. Southwest hasn’t grown Phoenix in a long time. It has, instead, focused on building Denver. But now, Southwest sees Phoenix as a priority. It launches international service there in October, and it’s building a new concourse at the airport. I know it’s a small data point, but in this schedule, Southwest is launching Long Beach to Phoenix flights. It isn’t flying from Long Beach to Denver any longer, and it’s only doing Long Beach – Vegas on weekends. Phoenix, at least for Long Beach, will be the primary connecting point for heading east. That’s not something we’ve seen in a long time.

This all smells like opportunism. Which airline is said to be the most vulnerable right now? American. And which hub would Southwest love to have to itself? Phoenix. Now, I don’t think this forces American’s hand yet. It really likes having the counter-seasonal hub in Phoenix as a way to place capacity, but at what point do tougher decisions get made? Southwest certainly has an interest in forcing that issue by piling on.

And it’s not just Phoenix. Southwest is also adding Austin as its first mid-continent destination from Long Beach. Is it coincidence that this is the only other mid-continent city that already has service from Long Beach, albeit by JetBlue? I think not. Turn the screws. while achieving your goals.

The same could be said for Denver. United isn’t going away, but it will be a smaller airline. If Southwest thinks it can snag some business, it certainly has the ability to do so. And a city like Nashville is Southwest’s bread-and-butter. It can strengthen that and push back on ultra low cost carriers that have been pushing in.

Look beyond those four cities and see what other growth is in store. Atlanta sees a restructuring that cuts international and western flying in favor of more regional options. This hurts Delta. And the growth in Austin does as well. But Austin, like Nashville and St Louis, looks like a place where Southwest has dominated, wants to keep dominating despite other airline growth, and so it is stepping on the gas.

On the flip side, look at what Southwest is cutting back.

Let’s start with the big loser there, Ft Lauderdale. That’s a huge cut, but remember, domestic travel is coming back before international. With so much of Southwest’s Caribbean network touching Florida, it’s not really a big surprise to see Ft Lauderale, Orlando, and Tampa get cut back since they not only lose international, but they also lose feed that would have filled up more domestic seats. Cancun obviously loses for the same reason.

But take a look at those red bars. Those are California and the Northeast, the two places where the virus has hit harder than others. But there is a broader impact here as well. Those California markets are primarily longer-haul flights going away to places like Atlanta and Baltimore.

San Diego has been hit especially hard with several other markets going away. We also see shrinking on short-haul in California, plus we see Portland to Southern California disappear entirely. What do all those have in common? Those are/were all Alaska strongholds.

Alaska, remember, pulled back San Diego, so Southwest probably felt it could do the same after building up in an arms race. The same goes for intra-California and of course, from Portland to Southern California. Alaska is in better shape than most of the big guys. If Southwest has a limited number of aircraft to devote, it clearly seems to be focusing on those places where it stands to make the biggest gains.

If I were Southwest, I’d be doing the same thing. After all, what’s the point of building up a war chest if you never use it in the worst of times? The airline could be conservative, or it could make a move and try to win while others flounder. It has apparently chosen the latter.

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50 comments on “Southwest Gets Aggressive While Others Can’t

  1. Interesting data and analysis. The biggest takeaway I get from all this is the continuing transformation by Southwest into a more connection focused carrier. WN may not schedule their “hubs” in the same way as AA/DL/UA et al…but living in STL and having a clear view of the ends of the 12L/Rs when takeoffs are to the NW, WN has clear banks. Taking the Hawaii increases out of the equation (lockdown/quarantine ending), all the increases are at inland WN “hubs”. The larger coastal stations are taking the most hits. Even BWI, WN’s “hub” for the East Coast is losing a bit of relevance. The biggest missing station on your charts is MDW. Where does that fall in the current scheme of things? Flat?

  2. This market definitely seems like a great opportunity for Southwest, especially in terms of targeting business travelers. Many of the nonstop options that business travelers relied upon with other airlines are gone. Once business travel starts to slowly rebound, the preference for nonstop itineraries may force some companies and travelers to consider WN where they had not done so before. In this age of COVID-19 concerns especially, I imagine business travelers as being more likely than leisure travelers to fly (instead of drive) for trips that are short in distance, and shorter flights are WN’s bread and butter.

    That said, the inability to book an assigned seat on WN is a concern for some business travelers (at least, those who are not WN loyalists), but I guess that free/cheap early boarding is a perk for corporate travel departments to try to negotiate into the deal, at least if WN wants their business badly enough.

  3. Obviously, Southwest sees a large pent-up holiday travel demand. Plus, if demand just isn’t there, they can cancel without retribution. Question: Will they continue at full strength on 01/01/21, or lapse back into reduced capacity? In other words, is this holiday schedule a one-off event or is this a permanent statement?

    The addition of Travelport and Amadeus is possibly the biggest long-term news here. If I were DL/AA/UA, I’d be concerned about yield erosion on business travel. Once business travel restarts in earnest, travel budgets may be smaller due to the financial effects of the virus. Price and availability will be key. Southwest will offer both.

    1. MissTheMasters – This isn’t just a holiday schedule. These levels go through pretty low demand periods including early November and early to mid December. There’s no reason to think they’d back off on this in January.

  4. As someone who has said all along that southwest will emerge one of the biggest winners, I have real doubts that WN will actually run this “full schedule” come December. Everyone is selling their full schedule now and WN should do so too. When the time comes and demand is 50% down vs last year and business travel remains non-existent, there is no way they can put this kind of schedule out there. After all, WN has to answer to shareholders like everyone else.

    Having said that, these moves do tell us some stories. They are really going after legacies here and taking it easy against AS/B6/ULCCs.

    Building up DEN is going to be interesting since UA is also likely to bring that back before everything else. DEN is going to be one of those cities with too much capacity like SEA. Not significant amount of LH international demand here, so UA doesn’t have that advantage over WN here. WN will give UA a run for its money.

    Building up PHX makes even more sense. AA will significantly downsize here and WN will take advantage. It’s not a city with a lot of international demand outside of maybe central america. WN can capture the market without LH international flight.

    Building up both BNA and ATL in southeast is curious. They must really be feeling good about themselves to challenge DL in ATL. Got rid of all the transcon stuff at ATL and just focusing on the short business routes and connection stuff they are good at. I thought they would’ve just focused on making BNA their southeast hub.

    Basically, WN is getting AA/UA/DL attention at a time when they are weakened and can’t retaliate as easily.

    Keeping LAS large makes sense too, since they need to keep up the pressure against ULCC buildup there.

    Their Florida move is curious. They’ve basically given up on the FLL fight, which makes sense, since B6/NK was killing them there. But cuts to MCO/TPA/CUN is puzzling at a time when NK/F9 have both shifted to a Florida/LAS/CUN strategy. Their cuts on the northeast to Florida market is going to be hugely welcomed by B6.

    And it seems like they have made the decision to cut back on their battle with AS on the west coast. It just shows how bloody that battle with AS was. Their move at LAX signals that they are content to being a local shorthaul carrier rather than one looking to capture all the traveling needs of Californian. Curious to say the least since LAX is wide open. LAX at this point seems to be handed on a platter to DL.

    Again, B6, AS and NK are going to be very happy here. They’ve signaled they are concentrate on legacy stuff outside of the coastal hubs. B6 will gladly not have to deal with WN in Northeast and south florida. AS will gladly see reduced WN presence in PDX and Cali. NK will gladly see weakened WN in Florida.

    Maybe WN will look to merge with one of these 3. WN can’t afford to ignore NK buildup forever.

    1. What FC said, but this was an interesting quote from Cranky… “I’ve heard from people at multiple airlines that demand is much better in the middle than along the coasts. That’s probably a mix of seeing coastal cities hit harder by COVID-19 and generally stronger beliefs on quarantining by populations in those areas. This would certainly help explain Southwest’s focus, but that isn’t everything. This has to also be about opportunism.”

      No doubt about that, however those areas that haven’t taken this virus seriously are the ones next in line to suffer it’s full effect. I’m looking at you Nashville, Phoenix & Las Vegas.

      1. The civil unrest has largely been in the exact same cities that were hardest hit by the virus and could have a compounding effect on travel and economic return. Several of the states in the South that have been open for several weeks have still not seen upticks in deaths or cases compared to their baselines. If virus cases and deaths grow, the chances are much more likely it will be in cities which have had the most civil unrest.

        1. Would not include MSP and SDF in those cities that were hit the hardest by Covid, yet they were/are epicenter of unrest.

      2. The coastal cities that have a lot of international travel and population density are always going to get hit harder imo than middle of the country. A lot of the sun belt states probably aren’t going to get huge outbreaks until the flu season comes around late this year when it gets cooler and there is not as much sun.

        if anything, NYC and area closest to it in NJ/Westchester/Long island got hit so hard in March/April that some of the zip has infection rates of 40 to 50%. That’s not very far from herd immunity. NYC will get through the second wave more easily because it has already went through the worst period.

        The middle of the country and west coast which didn’t get hit as hard is going to get it a lot worse on this second wave.

        So if WN is making this schedule based on the assumption that middle of the country will continue to have more demand than northeast, they are probably going to be quite surprised.

      3. I think you fail to understand how the virus spreads much more rapidly in densely populated areas. Nashville, for example, does not have the population base of older people stacked on top of each other that New York does.

        Most of the cities don’t have anywhere near the use of packed public transportation that coastal cities do.

        1. I said this before & I’ll repeat it here, if density is the issue then explain Tokyo & other high dense metros across the globe that didn’t get hit so badly with this virous. BTW most of them have far higher usage rates of public transit than even NYC.

          Although Covid strikes the older generations at proportionally higher rates than the population at large, that doesn’t mean it’s not spreading among those who are younger. I can attest to this as I personally know a family of five & they all got it, but two of them both teens showed zero symptoms. When I enquired how they became ill the mother told me she believes it was spreading at JFK & she as well as one of her daughters caught it there as it was five days later when symptoms first appeared. Thankfully there haven’t been post complications.

          1. I can’t speak for Tokyo, but Taipei is a densely populated city and has fared quite well. I think the difference is attributable to lessons learned from SARS, where Taiwan fared quite poorly, and as a result reacted quickly with testing, social distancing, and had good compliance with restrictions meant to slow the spread of the disease. On trips there over the last several years, it was not uncommon to see people wearing a face mask in public.

    2. I agree that they will be able to beat AA in PHX and UAL in Denver. Those two carriers are pretty weak at this point and will have a heck of a time trying to build up their own demand.
      SW beating Delta in ATL depends on what kind of concessions they can get from the airport, I’d say. Based on previous articles, Delta is building up capacity at ATL first, and by giving up on Florida Delta will have a prime opportunity to take that market for good, especially given they were on the verge of a fight with AA in MIA before this all started. This also ignores that Delta has the aircraft to win the mid-American heartlands that SW is targeting and that without having to take on debt either. The 737 has great economics, but if Delta puts an A220 on the same route then SW will be in trouble.

      1. “This also ignores that Delta has the aircraft to win the mid-American heartlands that SW is targeting and that without having to take on debt either. The 737 has great economics, but if Delta puts an A220 on the same route then SW will be in trouble.”

        DL is absolutely well-placed to win the heartland. Unfortunately, that doesn’t seem to be their strategy right now. There are still many markets lacking any meaningful connectivity to the rest of the network. We also haven’t seen any idea on what their mid-to-long term strategy is for the region.

    3. @FC
      > DEN: Not significant amount of LH international demand here, so UA doesn’t have that advantage over WN here. WN will give UA a run for its money.

      UA’s advantage at DEN is not international widebodies (although they do have a modest amount), but smaller RJs that can serve all sorts of smaller central+mountain US (+Canada) destinations but are too small for SWA 737 service. Compare the two route maps: UA goes to 178 destinations from DEN, while SWA is only able to serve 63 (pre-virus).

      > LAX at this point seems to be handed on a platter to DL.

      Curious why you don’t think OneWorld has LAX cornered with AS joining? I agree AA overall is weak, but they are #1 in market share at LAX and when combined with AS there they offer a heck of a lot of map coverage (and yes, I understand it’s a limited codeshare), with PHX and DFW as very robust connection options going east where there aren’t nonstops. DL can offer…. SLC??

  5. No talk about Dragon or SpaceX today? Future passenger applications?

    There are a few essential counterpoints that need to be made.

    1. Southwest is publishing a December schedule while no one else realistically is at this point. There is no assurance that WN will fly what it is published or that other carriers won’t have dramatically increased what they are flying right now. Flown traffic data will be much more significant and that will come months down the road. Other airlines are already significantly rebuilding their core hubs even for July schedules.
    2. Much of WN’s schedule changes still reflects that it does not like to compete directly against other carriers and its best markets come in markets where it does not have to; WN’s reduction on the west coast is indicative of that. It has nothing to do with the virus or recovery but because the west coast is crowded, was before the virus crisis and will be in the future.
    3. Southwest said last year that it realized that it makes higher profits on up to mid-continent flights than it does on longhaul flights, including “two-thirds” continent flights such as DEN to the east coast or ATL to the west coast. The results of this schedule are much more in line with what WN said it would do even before the virus crisis than anything else.
    4. From Atlanta, WN is re-entering a number of markets that it previously abandoned others. And some of the markets like SDF that it is re-entering don’t work from BNA because it is too close. WN is trying to split its SE operations again between ATL and BNA and yet they are trying to do the exact same thing hoping the results will be different this time- because they aren’t ready to throw in the towel on Atlanta and still don’t have enough gates in BNA. WN is dropping ATL to the west coast, friends. Tell me when the last time the number two airline in Atlanta did not serve any markets on the west coast? In Denver, the same principle is at play. WN’s capacity to competitive markets in the NE – such as BOS and NYC are flat at best. Same for other markets on the east coast. They have beefed up flights to the middle of the US. DEN-ATL is actually down. WN is trying to find mid-continent routes that are largely not other airline hubs to grow; its growth into other airline hubs and longhaul domestic is down. The data should be analyzed to show that reality.

    And, finally, in 2019, 21% of AA’s system capacity was outside of the US, while it was about 24% for DL and about 30% for UA. All of the big 3 can still dramatically cut their schedules by reducing capacity until next summer – when the next opportunity to significantly grow their international networks will come – and still defend their key markets.

    WN is a marketing machine that happens to fly airplanes. Coming to accurate conclusions requires analyzing what they do, not what they say.

    WN is a very profitable and shrewd airline but putting a stake in the ground only makes it easier for other airlines that are still rebuilding their networks to know what they have to do. They will very likely be proportionately larger and have the resources to fight but it is equally necessary to know what they are really doing and not just what they say.

  6. I also think this is probably overly optimistic but we will see (this as well as the overly optimistic stock market).

    I used to fly SouthWest more frequently but not much over the last 5+ years. What they have done with money is what the other airlines should have done instead of buying back stock that is largely worthless now compared to what they bought it at.

    While AA has its problems (well, quite a few), I’d rather not see SW take over Sky Harbor. I used to live in Maryland and they took over BWI and I don’t think it was an overall benefit for the area. Ticket prices certainly didn’t end up cheap and due to their huge presence at the airport, the airport rarely had a useful lounge (I think some like the Airport lounge have come/gone/come and aren’t accessible from some terminals).

    I’m guessing at some point down the road, my next flight home will likely end up being on Southwest. Glad they are hanging in there.

    1. LUV might bring the top level fares down in large markets that it takes over from legacy carriers but the average fares, as you note, do not come down. LUV makes a big splash about bringing fares down and they do it across the board – until they dominate a market. You can see them doing exactly that in Hawaii where the 4th quarter DOT fares from California to Hawaii are half of the industry average. They have the cash to sustain lengthy market share battles.
      But the continued assumption is that the big 3 are going to just lie down and let low cost carriers rip their networks apart as happened after 9/11. Unlike post 9/11 WN has been equally hard hit as the rest of the industry; they just released an update this morning and their revenue is still down 80-85% which is no different from any other airline.
      Ft. Lauderdale is a great example of how WN, despite having very deep pockets, does not want to stick around and fight with B6 and NK when WN can build cities like DEN which it intended to do long before the virus crisis – because it is an excellent connecting location where WN has gained the mass to effectively compete against UA. They are better suited to compete in DEN with a legacy carrier than any other legacy carrier hub in the US.
      LUV has simply revealed how it intends to rebuild its network – and that means less flying in markets where they have to compete with other carriers, more hub connectivity, more focus on the cities they were building before, and more medium haul flying, exactly what made WN a success.
      Trying to draw conclusions that AA, DL and UA will fail in protecting their hubs because WN is publishing a schedule further out than the rest of the industry is meaningless.
      The best way for America to have competitively priced air service is just as much about AA, DL and UA keeping WN in check as the other way around.

      1. > The best way for America to have competitively priced air service is just as much about AA, DL and UA keeping WN in check as the other way around.

        I strongly agree with this. I’ll add that as much as many people (myself included and especially) disparage them and avoid them, the presence of ULCCs like Allegiant and Spirit helps to keep the market and the legacy carriers in check.

        There’s a lot to be said for having a regulatory system that focuses on safety but that is still flexible enough to allow for different business models to be tried, altered, discarded, and copied; overly restrictive regulations often serve only to entrench and enrich the incumbent operators in a market and reinforce oligopolies.

  7. Interesting analysis. TSA numbers show a doubling of domestic traffic over the past 4 weeks. +170K in actual numbers. If you take a linear model to that, by the end of the year, you have 7.5 more iterations of +170K, that gets you to 1.6 Million passengers a day, which is about 66% of the 2-2.5 million per day we were running pre-Covid19. If you go doubling every 4 weeks, its obviously faster than that. If you can’t sustain +170K per 4 weeks, then its less. Looks like Southwest is planning for that 1.6 million pax per day? They’ve already said they are attempting to book planes at max 66% to allow for social distancing with the middle seat open, not sure how long they are going to push that policy but maybe through the end of the year? Again, 1.6 million is about 66% a normal passenger load.

    Its aggressive to be sure, but I completely agree, what’s the point of having a massive war chest built up due to great decision making over the years, if you are not going to use it when the time comes?

  8. This may be part of the reason why American is keeping a relatively robust schedule. Prospective passengers can’t book flights that aren’t offered.

  9. As an Airline employee, I have direct knowledge of booking treads. Our best performing large cities, both during May and looking forward, are:
    1. DEN
    2. PHX
    3. DFW

    Our worst performing markets, as you stated, are the East & West coasts. And as expected, short haul markets are also struggling. I think most readers and Airline “geeks” would be shocked with how bad the bookings are out of cities in the LA Basin, SF Bay Area, NYC Airports and the entire East Coast including Florida.

    The Southwest schedule accurately depicts which areas of the Country are performing well and which are not. Based on these facts, I think Airlines that are Coastal centric are in big trouble.

    1. while that is true now, that doesn’t mean it will be the case in December. Will WN get a proportional headstart in regaining revenue, yes. but the legacies also fly to those cities and they can easily put capacity back in their systems as well.
      There is often a rush to draw conclusions on pretty small data sizes.
      We are literally in the earliest weeks of recovery.

    2. I’m not so sure that we’ll still see the travel demand to/from the coasts recovering more slowly this fall and winter than travel demand farther inland. A lot depends on the speed at COVID-19 spreads through the middle of the country, along with how the media covers things and shapes the public’s perceptions. I think at this point it’s too early to tell. IMHO, one could make a reasonable argument both that the interior of the country will have a “flatter curve” (and that the media and public will tire of talking about and being restricted by COVID-19) and continue to do okay, or one could make an argument that the interior of the country is a bit behind the coasts in terms of seeing the full impact of COVD-19, or will be hit hard by flu season and the dreaded “second wave”.

      At this point, sure it makes sense for Southwest and other airlines to throw more scheduled flights at the interior of the country, but scheduling flights more than a month or so out at this point in time is just a lot of throwing stuff out there and seeing what sticks, with the option to cancel flights later if demand drops off or the situation worsens.

    3. “The Southwest schedule accurately depicts which areas of the Country are performing well and which are not. Based on these facts, I think Airlines that are Coastal centric are in big trouble.”

      B6, Jack is talking about you!

      And yes, I think WN’s network strength of serving ‘less glamourous’ southern and midwestern markets once again pays off for them. These are the areas where Covid-19 has done less damage to business and they are also areas where some trips are too lengthy to easily drive, yet are a short flight away. Chicago-Dallas or Louisville-Orlando or Denver-Phoenix come to mind. This is WN’s bread and butter and they’ve long served it well – and with mainline jets. That’s another factor in smaller to mid-sized (non hub) markets, you know. The big 3 fly a lot of RJ’s out of places like MKE, CLE, or OKC. Cities that are not small. WN, on the other hand, serves all cities with the 737. That aircraft may not be everyone’s favorite, but it sure beats spending 2 hours in an ERJ-145 or a CRJ-200 as you often get with the other guys.

  10. Southwest’s pivot away from competing with everyone-except-the-legacies makes sense. The smaller airlines have lower cost structures and have been allowed to retrench more to their areas of strength. Recall that Southwest came into this with a plane shortage so they still have to pick where they fly carefully, particularly as they’re capping load factors (though if they need more than 90 passengers on a flight that’s what the -800s are for)…and they don’t want to increase fleet size with MAXes coming down the pike.

  11. B6 is done at LGB in November per employees posting on other sites. It will be interesting to see what happens with LGB after they’re gone.

    1. I love the fact that Cranky, even though he is an LGB resident (and loves our airport), went on record years ago saying Southwest would never enter the LGB market. And yet, here we are… Southwest loves LGB and will continue to grow it (Austin is currently B6 and Phoenix is currently AA). I predict, Southwest and Delta will continue to take slots as B6 rolls out of Long Beach. HA also has been awarded another slot too. Cranky will continue to say that “no one has ever been successful at LGB and good luck to anyone who tries”… but I am betting on LGB.

  12. I’m not sure it will drive purchase decisions, but what I will say is that WN’s boarding model (no assigned seats) is preferable to assigned seats when everyone is social distancing. But I would note that this benefit is likely short-lived: people are over-estimating the lifespan of the virus panic. Based on the science and data, I’d give it a month here. Yesterday, for example, Italy had fewer than 200 new COVID-19 cases. That proportional number will occur in America by then.
    The other point worth noting is that WN has neglected PHX for years, and AA’s market share there has been climbing against WN. Do you have those historical numbers, Cranky? Not really sure why WN wanted to cede that airport to AA, as it would seem to be squarely within their business model. Maybe they’ve just now figured this out and want to better compete?

    1. Lots of ways to look at share, and I’m happy to pull it. Did you want seats? Passengers? Local passengers? In general, American has shifted in recent times to focus much more on local passengers and less on connections. At the same time, Southwest has been quiet. I believe this was because the airline made a strategic decision to focus its efforts on Denver and then meant sacrificing other spots in the west. It was only a matter of time before Southwest decided to get aggressive elsewhere again. Looks like that time has come.

      1. Thanks, Cranky. I’d be most interested in total pax counts for the 2 airlines at PHX for the past few years. If you can break it down by connecting v. local pax, that would be interesting, too. I guess total seats and destinations would be interesting, too, if you’re willing to do the work. :)
        I can’t quite remember where I read it, but sometime in the last year I saw something that indicated AA’s market share in PHX had increased versus WN. If that’s true, it’s surprising to me, because I wouldn’t think PHX would be particularly valuable to the post-merger AA. PHX itself is obviously a worthwhile market but, as a hub, it’s hard to see what PHX really brings to the table for AA when they have the DFW megahub and also the small hub at LAX. In such a scenario, I would think PHX would be a high domestic-demand, leisure-oriented market that WN would be quite successful at — especially since the true low-cost carriers have a small share of the market.

        1. iahphx – Easy enough to pull that. First, here’s the market share by seats:
          https://crankyflier.com/wp-content/uploads/PHXSeats.png

          You can see it started coming down for AA around 2016 which is when I believe they subbed in the 738s for the 321s. Interesting to see Southwest fairly flat.

          Here is the number of destinations:
          https://crankyflier.com/wp-content/uploads/PHXDests.png

          I find it fascinating to see the increase in recent times for AA.

          Lastly, here is the passenger share:
          https://crankyflier.com/wp-content/uploads/PHXPax.png

          I’m crossing streams here with local data from one place and total passengers from another, so maybe don’t compare dotted lines to solid lines, but you can see the dynamic where AA has cut back capacity and shrunk its overall passenger share since the merger. At the same time, American’s local share started going up around 2012 and has been solid. So really, it’s just connecting pax being pushed off to other hubs or other airlines.

          This isn’t a surprise to see Southwest make big gains around the great recession. But then notice how around 2013 American bumps back up (or at that time, US Airways).

          1. One thing I can say as a PHX resident is that WN has always done a MUCH better job with schedules that cater to the local population. For example, WN offered early morning flights to a lot of destinations compared to AA that would have flights to the same destinations scheduled later in the morning. This was a clear indication in my mind that AA was more focused on connecting traffic than catering to the local population. The data you provided confirmed what I had assumed – thank you for the data.

          2. Thanks, Cranky. Interesting albeit-not-very-conclusive data. At the end of the day, logic would suggest that PHX will be more important to WN than to AA. Although it would also seem like co-existence is possible.

        2. @iahphx > PHX itself is obviously a worthwhile market but, as a hub, it’s hard to see what PHX really brings to the table for AA when they have the DFW megahub and also the small hub at LAX.

          On the surface I agree with the overlap of PHX and DFW hubs. I think the secret value of the PHX hub is attracting high-value fliers from secondary airports across CA: SMF, SJC, SBA, BUR, SNA, SAN, ONT, PSP, and others. People who want status on a global airline (vs. SWA) and who don’t want the hassle of going out of SFO or LAX, but don’t mind a quick hop thru PHX to most places they want to go – or the DFW megahub if they can’t get it thru PHX. I used to know an executive coach in Orange County (home to a whole lot of high-value frequent fliers) that used AA as their preferred airline for exactly this reason. Same story with another friend in Santa Barbara. With Alaska joining OneWorld I think this value proposition just doubled for California fliers outside of SFO.

  13. I think any reduction at BWI is only temporary. WN’s CEO is very bullish on BWI and they will even be putting an east coast maintenance facility at the airport. It was only recently that BWI was #2 behind MDW in terms of daily nonstops.

  14. “Southwest Gets Aggressive While Others Can’t”

    Somehow this headline doesn’t seem quite right today, given AA’s announcement. :)

  15. @cranky : not sure if you’ve noticed those huge pool party crowds at Lake of Ozarks over Memorial Day weekend, where *symptomatic* folks attended (read : socially irresponsible) and tested positive (and god knows how many more subsequently).

    Thanks but no thanks. I have zero interest in an airline with its 48% market share of MCI and 61% at STL that specializes in the market sub-segment of those who willfully forget how to social distance.

  16. @?????? : not sure if you’ve noticed those huge pool party crowds at Lake of Ozarks over Memorial Day weekend, where *symptomatic* folks attended (read : socially irresponsible) and tested positive (and god knows how many more subsequently).

    Thanks but no thanks. I have zero interest in an airline with its 48% market share of MCI and 61% at STL that specializes in the market sub-segment of those who willfully forget how to social distance.

  17. @cranky : not sure if you’ve noticed those huge pool party crowds at Lake of Ozarks over Memorial Day weekend, where *symptomatic* folks attended (read : socially irresponsible) and tested positive (and god knows how many more subsequently).

    Thanks but no thanks. I have zero interest in an airline with its 48% market share of MCI and 61% at STL that specializes in the market sub-segment of those who willfully forget how to social distance.

  18. henry LAX must be so used to filling out forms in triplicate that he posted his comments in triplicate!

    But, here’s my real reason for posting. It has been mentioned a couple of times, but no one has elaborated on it, that the 737 MAX jets may be cleared to return to the skies soon. We have heard almost nothing about that lately, since all newscasts have been taken over first by the Covid-19 pandemic, then by the civil unrest following the murder of George Floyd. So, if the 737 MAX jets get their recertification soon, how will their availability affect short- and mid-term flight scheduling as restrictions on group gatherings and social distancing are relaxed, notwithstanding a second wave of Covid-19?

    1. SkyVoice – I’ve been watching this one, and Southwest is now scheduling the MAX to go back into service on Dec 17. I don’t know that anyone else has made a firm date yet, but even Southwest can’t be convinced it’ll actually come back then. I think for most airlines, this will just give them flexibility. If demand isn’t there, they can possibly retire or park older narrowbody airplanes. But it still seems far enough away that it’s not really top of mind.

  19. Southwest should jump into new, growing markets with bright futures like XNA and TYS while the others are down.

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