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.