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When it comes to air travel, it is a pretty good time to be living in Austin. Tech workers continue to flood the area, and airlines are all stepping on top of each other to try and woo all those people to board their airplanes. In this modern day gold rush, there will be winners and losers. Let’s take a look at the prospects.
To start the discussion, I naturally turned to Cirium to get the cold, hard data. Here’s a look at departing seats by airline by year going back all the way to 2005.
Austin Departing Seats by Airline by Year
As you can see, there is no dominant airline in Austin. It’s certainly a far cry from the single-airline-dominated airports in Houston and the Dallas Metroplex. That being said, there is a clear leader when it comes to capacity, and that is Southwest Airlines.
Southwest: Steady as She Goes
Southwest has consistently been the largest passenger carrier at the airport throughout recent memory. Looking at government data, Southwest had over 35 percent of seats departing Austin in 2019, and it carried just shy of 35 percent of all passengers who started or ended their trip there.
Southwest has grown with the city, serving 15 destinations in 2005 and rising to 33 in 2020, with both Long Beach and Salt Lake joining the network in 2020. Southwest will continue to max out its operations the best it can, but there is little gate space available for any significant growth right now. Southwest certainly has little interest in ceding any ground, so the strategy must be about fending off any incursions from other airlines and maintaining its position of leadership.
American: Making a Play
When America West took over US Airways, the team focused on ridding the system of as much non-hub flying as they could. They knew that the best opportunity to make money was to rally around the hubs and ditch the rest. That was a strategy that remained in place even when that team took over American during the US Airways merger. Then Boston and Austin started creeping back in.
In Austin, even before the pandemic, American had granted special status by adding flights to Boston and San Jose for business travelers along with weekend service to Cabo San Lucas for leisure. It was the number 2 airline behind Southwest, carrying just shy of 18 percent of the local passengers. Now in the pandemic, things have changed and Austin is benefiting.
American has recently announced it will fly from Austin to Las Vegas, Nashville, New Orleans, Orlando, Raleigh/Durham, Tampa, and Washington/Dulles. It will also fly seasonally to both Aspen and Fort Walton Beach. And yes Cabo and Boston remain… but San Jose is gone. Let’s also not forget that partner Alaska has been growing significantly in Austin, flying to Seattle (increasing to 4x daily this summer), Portland (up to 2x daily this summer), San Francisco, San Jose, Los Angeles, and San Diego. It also recently added Boise.
Throw on top JetBlue’s presence in Boston and New York along with joint venture-partner British Airways’s service to London, and American has a pretty compelling argument these days. If we could just finalize that long-loved merger dream of mine between Alaska and Hawaiian, we could add that new Hawaiian nonstop to Honolulu into the fold.
This is American making a leisure play at a time when business travel is down. There is plenty of money around Austin that resides with people who can work anywhere, so they have the ability to travel freely. American is able to better utilize its gates to add all these flights, and thanks to PSP 3.0, it has crews — not to mention airplanes — that aren’t being fully utilized either. The bar is low for new service, and this is a sensible place to start. When business travel comes back, American is trying to set itself up to be able to step right in and change its mix of flights.
Delta: A Focus City?
I wrote recently about how Delta was abandoning all focus cities except for two, one of which is Austin. So what does that mean? We don’t really know yet. The only non-hub Delta serves from Austin this year is fellow focus city Raleigh/Durham. Cincinnati service has ended.
That doesn’t mean that Delta hasn’t been active in recent years. In 2017, the airline increased seats by 20 percent followed by another 19 percent in 2018 and 8 percent in 2019. With 12.7 percent of departing capacity in 2019, Delta took 14.3 percent of local traffic. That’s not bad, but it’s also not enough if it wants to fight to be the legacy airline of choice now that American has decided to bulk up. It’s now Delta’s turn to make a move.
ULCC Supremacy: Frontier vs Spirit
Austin should be a big ultra low cost carrier (ULCC) market since without a dominant hub carrier, it doesn’t have as many nonstop destinations as you might think it could support. The ULCCs can certainly fill that void.
Frontier has been in the market since long before it became a ULCC. In 2017, it started to make a real move, increasing seats more than 50 percent to 282,000 followed by more than doubling in 2018 where it peaked with 675,000 seats to 33 destinations. But there was trouble in paradise as Frontier cut seats 23 percent in 2019 and served only 19 destinations. Of course in the pandemic, it has come down further. In 2021, it has only 4 summer destinations scheduled with 187,000 seats at the moment.
On the other side we have Spirit, an airline that didn’t even serve the market until it burst on the scene with 500,000 seats to 10 destinations in 2019, nearly even with Frontier that year. The pandemic knocked the airline down, but in 2021 it is stepping back on the gas. Right now it has nearly 350,000 seats scheduled in 2021 to 11 destinations, including the recent addition of Pensacola.
I didn’t mention Allegiant, but the airline is in this market as well. It’s just small, as it always the case. It has 171,000 seats in 2018, but that dropped down to 108,000 in 2019. It’s growing again, so keep an eye on the airline, but for now, it’s well behind the others.
All the Rest
We can’t have an Austin conversation without talking about Hawaiian, can we? Hawaiian has just joined the market with the first nonstop to Honolulu. It started with 2x weekly but has recently upped that to 3x weekly. Hawaiian is not fighting for dominance here by any stretch, but it is hoping to find a profitable niche.
On the foreign carrier front, plans have taken a step back. British Airways continues to be the long-haul standard-bearer, but even it isn’t planning on bringing back the London flight until June 1 at this point. The only other long-haul operator with anything scheduled this year is Lufthansa, also in June. Mexican carriers have all walked away for now. Air Canada is now planning to return after Labor Day while WestJet still has infrequent summer flights in the schedule that likely won’t happen.
Finally, there’s United. United is a sizable operator at the airport, but it hasn’t overtly made any moves to focus on growth there. Whether that ends up changing, only time will tell. Everyone else seems to want a piece of the action, so United might be content watching the others beat each other up. You just never know.
No matter what happens, it’s going to be a challenge for any airline that’s trying to get ahead. The main terminal has no space to grow now, and demand is clearly high for any space that exists. So, the airlines will continue to try to beat each other up, scraping as much demand their way and they can. The end result will be plentiful service and probably cheap fares for travelers until the dust settles.