Southwest Chooses Variability, Route Cuts in Orange County Shuffle

Southwest

John Wayne Airport in Orange County, California has a very confusing and strange slot program. Each year, there is a passenger cap that requires juggling flights based on a variety of factors. Oddly enough, it rewards airlines for not filling airplanes. The 2023 plan has been released, and it’s another bad year for Southwest. The airline has been forced to make deep cuts, and those were filed by the airline last weekend. As always, it’s fascinating to see which flights got the axe.

You can read through the full explanation of the allocation here. In 2023, Southwest will get 44 average daily departures (or in Orange County parlance, ADDs). This is a drop from the 57 it had in 2022, which in turn was a big jump from the 48 it had in 2021. Pandemic times are strange.

There have been ups and downs in the past, but this is about as steep of a drop as it can be. Why is that the case? It’s a couple of things. First, there were a couple of new entrants who will begin service to the airport. Aeromexico will have 1 daily while Breeze will have 2. But more importantly, the airport assumes its planes will be more full this year.

The main constraint on the airport is actually a passenger cap. That was 10.8 million annually until the end of 2020 when it climbed to 11.8 million. The airport takes a guess about how full flights will be, and that’s how it determines how many seats to allocate. In 2022, there were 15.5 million seats allocated assuming that only 73.7 percent of them would be filled. For 2023, there are only 14.5 million seats being allocated, because the airport assumes 78.6 percent will be filled.

With these changes, Southwest — the largest airline at the airport — lost big. This has pushed the airline to get creative about how its uses the remaining ADDs. Here’s how things look overall by day comparing February 2023 to 2022.

Southwest Feb 2023 vs Feb 2022 Daily Orange County Departures

Data via Cirium

In 2022, Southwest had the same schedule every day except Saturday when it pulled down further. It didn’t use its full allocation, it seems. But now the airline is planning in 2023 to surge on peak days of Monday/Thursday/Friday. Saturdays remain lowest, but Tuesday/Wednesday/Sunday will be in between. Note that Sunday is an off-peak schedule. In case you needed proof, this is a business market.

But how did Southwest get to this lower point? It had to make some tough market decisions. Here’s how that breaks down.

Southwest Weekly Orange County Departures by Destinations Feb 2023 vs Feb 2022

Data via Cirium

The easiest thing to do was cut frequency in heavily-served markets. Phoenix got hit the hardest, followed by San Jose and Denver. The pain was spread around in those cases, not severely impacting service levels in any one market.

Las Vegas and Austin actually got a bump in service on those flex days. Still, at only 3x a week, it was a minor increase. But it does suggest which markets the airline found most important.

Then at the bottom we have Chicago/Midway, Salt Lake City, and St Louis. Those will not be flown next year. St Louis wasn’t actually in the schedule for 2023 before Southwest filed its changes last week, but Chicago and Salt Lake were. Now they’re gone. Why were those chosen? There are a couple ways to think about this.

When it comes to longer-haul flying, Nashville and Chicago are similar in distance. Both saw run-ups in fare this summer, but in Q2 2022, Nashville’s nonstop generated an average fare of $283 with 85 local passengers each way per day (PDEW) while Midway sat down at $214 with only 52 PDEW. If you’re going to sacrifice one of those, it’s pretty clear which one it will be. You have to play to the local market. (St Louis, by the way, had the same fare as Chicago but only 39 PDEW.)

There’s also the multi-airport strategy to consider. Chicago is served from nearby Long Beach, and that appears to be an important consideration. The same day Southwest pulled the Salt Lake flights from Orange County, it added 1x daily from Long Beach. I suppose the airline figures that it can at least draw from northern/western Orange County into Long Beach instead of providing no nonstop options to the region at all. Besides, Salt Lake is obviously a competitive market with better service from Delta, so people aren’t likely to choose Southwest unless they’re loyal (or the price is cheap). Long Beach can still serve those.

Overall, it appears Southwest is focused on its bread-and-butter, short-hop business markets from Orange County. Texas remains important, and the two Mexican flights won’t go away because those are international-only ADDs being used. Eventually, Southwest will get more ADDs at the airport, but for now, it has to manage the ones it has as best it can.

32 comments on “Southwest Chooses Variability, Route Cuts in Orange County Shuffle

  1. The SLC exit is predictable. Other than its remaining, somewhat token, presence, Southwest has gradually ceded SLC to Delta over the past decade. Word is that the schlep to Southwest’s SLC gates is quite lengthy and onerous. I believe you addressed this sometime back when SLC opened its new terminal space, although you did not mention Southwest by name.

    1. Every flight at SLC requires a lengthy and onerous schlep right now no matter what airline; the WN gates last I was there were at the far end of the B concourse, but that’s where DL’s regional jet gates are.

    2. It’s probably about a ten minute walk from security to the gates on the end of the B Concourse. However, that should be shorter in about a year when the tunnel between the center of the A Concourse and the B Concourse is completed. Currently, you have to walk over about half the length of the concourse and then use the temporary tunnel.

    3. It really is impressive how quickly SLC became a “never again” connecting airport for me given how new it is. It’s just horribly designed for passengers and it’s truly amazing how every food spot is always a 20 minute wait.

    4. Onerous is an understatement! Flew there from SNA in August to drive to Yellowstone and the SWA gates are the absolute farthest you can go in the airport. Think of the terminal as a giant capital U with SWA at one end and the airport exit at the other (the bottom of the U is a tunnel between the terminals). It was a miserable walk – probably 1 or 1.5 miles I’m guessing? My brother was having back issues and it was so far we had to find him a wheelchair.

  2. As an SNA flier its interesting they axed PHX and DEN . . .which I use to access other Southwest cities on connections. That’s a bit disappointing as it puts Southwest more at a disadvantage compared to UA, DL, AA in terms of flight availability. Maybe they managed this “just right.”

    1. They reduced PHX by 1.5 daily flights, going from 7.5 daily to 6 daily. “Axed” would not be the term I would use.

    2. Good observation on the hub service reduction. However, please note LAS service increased. As LAS is closer to SNA than either PHX or DEN (and therefore more efficient in time and fuel burn), perhaps that’s an attempt to salvage the connecting traffic. Internally to Southwest, this is a good test of their network connectivity.

  3. Sounds a little like HPN with the restrictions and all. However in HPN’s case it’s even more restrictive with weight limits, hours of operation & noise. Never mind the fact HPN has more corporate jets housed there than anywhere else in the country allowing big wigs to come & go as they please.

    In the case for both some super wealthy people have the power to decide how the airport will be allowed to function as apposed to what is best for everyone who could benefit.

      1. There was talk in A.net that since Mexico still hasn’t recovered its category 1 rating with the FAA, it can’t even start this flight (wherever it’s going) anytime soon. And that the board really shouldn’t have given a valuable slot to an airline that can’t even legally operate it…

        1. I’d say that’s entirely fair. I haven’t heard anything about Mexico possibly getting back to Cat 1 anytime soon. And SNA certainly wouldn’t know either way. I suppose we’ll find out.

  4. STL does run Saturdays starting in March. Not to say that can’t get chopped back but it isn’t gone for the year at the moment.

    1. I also have STL-SNA qtr 2 2022 at 82.5 passengers a day. Did you use qtr 1 numbers or did I look at something wrong?

      1. Jon – I’m not sure what you’re looking at, but when I look at Q2 for St Louis – Orange County, I see a total market of 98.1 PDEW but only 39.1 that flew nonstop. I was looking at the PDEW for those who flew nonstop.

  5. Cranky,
    I am not trying to be a wise guy but in your opinion are the members of this board qualified to analyze the data and make recommendations? All I ever read about this airport is how to constrain, not how to maximize airport revenue or to add pax.

    1. The real issue is the local officials in Orange County have capped passengers, set curfews, and imposed other restrictions on the airport. Seems like the board at SNA is confined to manage within these local government imposed rules. And seems like the local officials are prioritizing the few that complain about noise at the expense of the many who could use additional air travel to the region.

      restrictions date back to 1985, per google :/

      1. SNA has a tangled web of restrictions brought on by the 1985 settlement agreement.

        https://www.ocair.com/about/administration/settlement-agreement/

        I have always hoped the board would find a way to change the defention of a commuter slot from 70 seat to 76 seats. That would open up more seats as the last time I looked only 100,000 of the 400,000 seats the airport sets aside for commuter flights were used. Don’t think it will happen but still hoping.

  6. Thanks Cranky for this analysis. I didn’t realize that SNA had this messed up passenger cap system that was limiting it – I figured it was based on aircraft movements or something like that. It is really too bad – I have hoped for some time that WN would start nonstops to SNA from PDX – I would love to see some good competition on that route to AK.

  7. This seems completely illogical. If you get more passengers per plane, isn’t that a good thing?

    Also, why does SNA have slots? Whenever I see anything about FAA slots, it’s the NYC airports and DCA. The only other airports mentioned by the FAA are LAX, SFO, EWR, and ORD.

    1. Southbay – There are some airports with local noise ordinances that were grandfathered in and allowed to remain. SNA is one, Long Beach is another. They aren’t slots due to congestion like the big airports but rather just approved noise ordinances.

      1. Oh. I live near an airport with a curfew, but the it doesn’t limit the number of planes that can fly in and out during those hours. It also allows for quieter planes to fly during the curfew. Flying an A220 into an airport should not be the same as flying a DC-10.

  8. SNA fares are consistently much higher than LGB or LAX because of these restrictions while demand does nothing but grow. At some point the 3 million people (!) of Orange County are going to have to overrule a few wealthy residents of Newport Beach to increase capacity for the good of the region as a whole. It’s really absurd and everybody there pays the price. Thank goodness for the SWA growth at LGB, but that’s not an attractive alternative for a lot of east or south county.

    Once flew SWA SNA-HOU and the flight attendant got on the PA right after takeoff: “Shhhh. Everyone please be quiet. We’re flying over rich people!” ;-D

  9. Given the scarcity of slots at SNA, I question the wisdom of WN continuing nonstop service to PVR and SJD from SNA. Those 14 weekly frequencies could be put to better, higher-yield use on other domestic routes.

    Also, given that LGB is on average WN’s lowest yielding market in the LA Basin (Diio, 2Q22), I question the wisdom of WN working so diligently to utilize their LGB slot portfolio with “fluff” placeholder markets like HNL, OGG and RNO. It would make more sense for WN to fly routes that are economically viable that can command a decent yield rather than slot-squatting to keep the competition out.

    WN faces ongoing capacity constraints of varying degrees at BUR, LGB and SNA that will continue well into the future. WN’s best option for future higher-yield growth in the LA Basin lies at ONT (and the metro LA region continue to grow to the east).

    1. Dolphin – Those are international slots, so Southwest can’t take those Orange County flights to Mexico and use them domestically. It’s fly them internationally or lose them.

      As for Long Beach, Reno is actually a pretty decent performer. It fills more seats than the other 1 hour flights from LGB, and it has better local fares than Phoenix and Vegas. It’s on par with San Jose. It’s not a terrible use of a slot. Hawai’i is also not a terrible plan since Southwest can’t fly that out of Orange County for now.

  10. How is JSX doing at SNA? The report mentions them wanting up to 228,082 passengers instead of the 95,070 they have currently. Unfortunately I’m guessing that won’t happen if it means moving them to the terminal.

    “Essentially then, JSX can either operate 95,070 passengers at ACI Jet’s FBO leasehold during the 2023 Plan Year or move its operations entirely to the Terminal and provide operations for up to 228,082 passengers, pursuant to their request, out of that facility, similar to the manner in which SkyWest is operating at the Terminal. “

  11. Please remember the LGB “catchment” area is not a circle overlapping LAX and SNA! For example, to the east/northeast, Anaheim/Garden Grove, Fullerton, Norwalk, Wittier, Buena Park, etc, LGB is the most convenient airport.

    Has everyone forgotten that B6 went head to head with DL on SLC. DL will have almost all connecting traffic, while I imagine WN will be primarily local traffic. WN must love LGB, they will be up to 40 flight soon!

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Cranky Flier