You know that I love watching the drama between United and American in Chicago, but get ready for a new favorite battle: San Diego. Both Alaska and Southwest appear ready to fight as the new terminal prepares to open. Alaska fired its most recent shot by adding three new routes and increasing frequencies on others.
San Diego is a good market. And, importantly, it’s a constrained one. Yes, it has a single runway, but it also has only one and a half terminals. I say “half” because if you’ve ever been on Southwest flying out of Terminal 1, you know it is barely functional. It is old, and it is woefully undersized. It is very hard to run an operation out of that place.
But at the end of this summer, the new Terminal 1 opens. Not only is it modern with properly-sized holdrooms and all that, but the initial phase will open with 19 gates compared to the 14 in operation today. Once the old Terminal 1 is knocked down, another 11 gates will be built on that footprint to open by 2028. There are also taxiway improvements coming to help increase the flow of aircraft around the small footprint of the airfield. And this means the time has come for airline to step up if they want to be in a good position.
Historically, San Diego has been Southwest’s turf. (Ok, if we go far enough back, it was PSA’s turf, but that’s a little further than I was looking to go in this post.) Southwest is the king of intra-California and has been for decades. That’s why it’s no surprise that for the 12 months ending July 2025, the airline will have 60 percent of its seats in San Diego on flights of less than 500 miles.
That’s not all Southwest does, of course. Here’s the July route map for Southwest.
Southwest San Diego Map via Cirium
As usual, Southwest does a lot on the midcons. It also extends further east to its hubs in Baltimore, Orlando, and even Tampa. But this is a very Southwest way of serving the city. (Note that it is down to only Honolulu in the islands during peak summer.)
Alaska, meanwhile, has been sneaky, working its way around Southwest’s key markets. Here’s Alaska’s July map, including Hawaiian:
Alaska/Hawaiian San Diego Map via Cirium
Alaska has only 24 percent of its seats in markets of less than 500 miles. Sure it has the usual markets where it competes with Southwest, but it also has Fresno, Monterrey, San Luis Obispo, Santa Rosa… you get the point.
Then it has skipped almost entirely over the middle of the country and focused on the Pacific Northwest at its home base as well as the east coast. Yes, there’s that Florida overlap, but Alaska is largely serving the big cities in the east that matter. But what about the middle? That’s what its partnership with American is for. People can fly American to Phoenix, Chicago, or DFW and connect all over from there.
This strategy has kept San Diego as a place where both airlines can coexist. It certainly helps that the legacy carriers have ignored the market. Here’s a look at San Diego seat share over time:
Map via Cirium
Since 2004, the Big 3 and their joint venture partners have grown seats in San Diego by a mere 2.2 percent to just shy of 6 million seats combined in 2024. Southwest, however, has grown 25 percent, topping 5 million on its own. And Alaska has grown an incredible 259 percent (off an admittedly smaller base) to reach more than 2.8 million seats. The rest of the growth has come from ultra low cost operators which all together account for 1.3 million seats.
So, Southwest has about a third of the market while Alaska is around 18 percent, but Alaska has big plans for San Diego. It’s tired of the old Virgin America network and keeps pulling back on longer-haul flying both Los Angeles and San Francisco. (Just last week it canceled Washington/Dulles from both airports as well as SFO – Chicago/O’Hare and Los Angeles – Nassau.) In California, Alaska seems largely focused on making San Diego its own now.
The airline added three new routes this week, and they are all notable.
- Chicago/O’Hare 3x daily starting Oct 4
- Denver 3x daily starting Oct 4
- Phoenix 3x daily starting Aug 20
It is also jacking up frequencies in important markets starting October 26:
- Las Vegas from 4x to 6x daily
- Sacramento from 4x to 6x daily
- Salt Lake City from 1x to 3x daily
- San Jose (CA) from 4x to 6x daily
This is no small expansion, and it shows how much progress has been made in becoming competitive. It has now easily surpassed Southwest on the number of destinations from San Diego.
Destinations Served from San Diego by Month (including merger partners)
Data via Cirium
But it’s not just about serving more destinations. It’s about serving the right ones and with the right service pattern.
Chicago is significant in that Alaska already has partner American flying the route. But it’s important for Alaska to fly it so it can control capacity and fares and have better connectivity off its own flight to American’s beyond options. Just note, however, that this comes as Alaska pulls out of the San Francisco – Chicago route. It hasn’t flown there from LA in awhile. San Diego is different. It matters more to Alaska right now.
Phoenix is another American hub that Alaska wants to feed, but this is a much tougher market. You have American with 5x daily, Southwest with 9x daily, and even Frontier with 11x weekly. This is a very busy market, but it’s also a key destination for San Diego with more than 1,000 daily passengers each way (PDEW), so Alaska wants to be there.
And then there’s Denver which is actually the largest market from San Diego that Alaska doesn’t serve with more than 1,200 PDEW. So, now it will.
If you exclude Oakland, Alaska will now serve all of the top 13 markets from San Diego. Of the top 21 airports, Alaska will only not serve Oakland, DFW, and Minneapolis/St Paul.
Southwest, meanwhile, doesn’t serve Seattle, New York City, Boston, or MSP. It has secondary airports in some markets as well, like Washington, DC. Alaska is making a play that with its partnership with American, it can better serve the people of San Diego. Southwest will absolutely not go down with a fight, so get ready to rumble.
Congratuations to the people of San Diego, things are about to get fun.
43 comments on “With the New Terminal Opening in San Diego, Alaska and Southwest Prepare for Battle”
So is there that much unmet demand in the San Diego originating market or do you think empty seats and lower fares are ahead?
Oh, this is largely a market share play by AS – they smell Elliott-tainted Southwest blood in the water and are making their move.
There’ll be downward pressure on fares, to be sure, unless we go into a significant recession and one or both airlines blink.
Stock up on popcorn!
SAN currently is my home airport and has been for 14 years, so I feel confident in answering your question: in a nutshell, it is mostly due to population growth as well as adding routes that were never served non-stop before.
SAN annual passenger traffic surged by roughly 40% from 2010 to 2019. COVID knocked that down considerably in 2020 and 2021 (no surprise there). But in 2024, SAN surpassed 2019 and set all-time passenger records.
The increase in annual passengers is largely due to the increase in population, especially more high-income people who are constantly relocating from the Bay Area (like me).
Alaska has been added a good amount of capacity at SAN to serve secondary and tertiary airports on thin routes with regional jets: these serve people who would either fly to airports more distant than their final destination (like my friend who just last week went to Carmel, who flew to Monterey, just a few miles to Carmel, versus flying to SJC, a healthy one hour or so haul to Carmel; or Santa Rosa which is a good 60-90 minutes from SFO or OAK), or they would drive (SLO, Santa Barbara,Fresno, even Vegas which was only added last year) which is a royal PITA because it requires driving through the horrible LA traffic. Given that these are very thin routes, WN can’t compete with AS on cost or load factors with their standardized 737 fleet.
Adding Denver makes a lot of sense, given that both cities are experiencing above average growth. I’m a bit puzzled by the addition of Phoenix and ORD, which are served plenty well by AA. Given that they are joint venture (Oneworld) partners, they can coordinate schedules, which makes me believe that Alaska coordinated this with AA prior to the announcement. Perhaps AA is pulling back from West Coast flying, sort of like what they did back in the Reno Air days?
WN’s recently announced upcoming changes also work in AS’s favor, and AS is going on the attack at SAN. Up to now, pricing for AS’s Basic Economy has matched WN’s Wanna Get Away (WGA) fares. The current WGA allows for full-credit changes and cancellations as well as two checked bags versus AS’s industry-standard Basic Economy terms (no checked baggage allowance and ticket value surrender for changes/cancellations). With WN’s new model (WGA becomes Basic Economy), WN is largely surrendering its advantage. On the upper end, WN’s full fare ticket prices are comparable to AS’s first class fares. Who wouldn’t prefer sitting in First vs. WN’s cattle class?
I’m confident when I say that Southwest’s private equity induced changes will hurt them at SAN.
Regardless, I love AS’s expansion at SAN. AS is my favorite domestic airline to fly, and my status as Oneworld Emerald routinely gets me complimentary upgrades. Plus I can credit all of my flights to AA. The employees are extremely nice and service-oriented, plus they have first class unlike WN. And the addition of Hawaiian Airlines is a huge plus. Southwest is tolerable for flights 2 hours or less, but for flights beyond that (AUS, NYC, DCA, BOS, MCO, ATL, etc.) I’ll take AS without a second thought.
(Now I’m just waiting for AS to acquire JetBlue…but that is WAY off-topic)
AA and AS are not joint venture partners. They are non-immunized alliance partners, meaning they still compete and cannot coordinate schedules. So AS providing their own feed into AA hubs to serve the local market and have AA’s onward connections to help fill the planes makes perfect sense.
David C – I think there is a mix here. The gate constraints mean that it probably is somewhat underserved. But I also think Alaska and Southwest will put too much capacity in as they fight this out.
I really am curious to see how a wounded Southwest reacts to network carriers going after a few of its mid-city jewels. Austin should be safe for a while without new gates for 5+ years even though WN yields will likely be hit some. But SAN should be interesting to watch.
That said, It is always impressive how large OneWorld is on the West Coast.
So, do you think AA is ok with these adds?
I realize this was directed at Cranky, not me. But my personal opinion is that I doubt AA cares and probably loves it.
AA’s OneWorld JVs are the only ones in SAN that go across the Pacific and the Atlantic. Alaska’s membership in OneWorld only strengthens those JV positions for AA even though it isn’t AA metal.
AA never showed any desire to grow in SAN. To the extent that customers that care about a first class upgrade are moving from DL and UA to Alaska frequent flier programs, that would also help AA since AS is never going to get a SAN-based passenger to MIA nonstop (most likely since AA flies it or if AS did, it would be to connect on to AA MIA metal) or PWM/MGM/MDT, but now that passenger is more likely to fly AA vs DL/UA on their other SAN-based travel since their Alaska loyalty is rewarded on AA.
There is probably some pull from AA to AS but on the whole, the AA-AS relationship is likely helping AA since you have to imagine the bulk of frequent flier switchers in SAN would be from DL, UA, and WN. AA loyalists that were in SAN can already be rewarded for their loyalty on every Alaska SAN flight today so it seems unlikely AA loyalists would be the big credit card movers to AS compared to DL/UA/WN.
But just my unsolicited three cents.
AA and AS don’t have a JV and AS doesn’t currently have a JV with any carrier. AS’ participation with any carrier right now is on a prorate codeshare basis.
AA’s only own metal west coast TPAC service is from LAX. Neither AA or AS fly SAN-LAX.
None of the routes being added materially change what already exists to AA or oneworld JV west coast gateways.
this is AS’ own domestic growth and, as CF notes, is a size contest with WN in a city which the big 3 have largely not tried to fight for
Never said there is a JV between AA and AS.
There is a OneWorld JV in SAN that benefits AA that goes to NRT and to LHR and it’s only enhanced by AS customers choosing to stay loyal to OneWorld.
Just as the AA and AS networks are very VERY complementary and loyalty on each side is reciprocal.
Alaska, by itself, is the biggest network carrier on the West Coast by many metrics. AA, by itself, isn’t of much value to intra-West Coast travelers but it does have VERY good coverage of the US everywhere itself.
Of course it matters that AA and AS recognize each other’s loyalty and, for now, while they don’t do much with each other’s networks except feed each other’s hubs, it is mutually beneficial. It may not always be but it certainly is now to both carriers.
The question asked by someone else that I replied to was “what does AA think about this”. It’s just my opinion but I also explained why my opinion is — positively. There may be some lost traffic on SAN-PHX, but given AS’ limited network reach, it likely only means more AA metal passengers across the rest of their network that may have otherwise chosen DL, UA, or WN.
Enjoy your day. I’m not interested in your usual back/forth rants and Cranky has asked to limit that.
MaxPower – I think the issue here is the use of the term JV. There is no oneworld joint venture. It is an alliance, and it does provide a framework for status recognition, connectivitiy, etc. So yes, it absolutely benefits Alaska to be able to connect into those airlines in the alliance, but there is no joint venture where they have split revenues or expenses.
Your point is taken, of course. It’s just the use of “JV” that seems to be the hang up.
I understand your point and apologize for the confusion.
“AA’s OneWorld JVs are the only ones in SAN that go across the Pacific and the Atlantic. Alaska’s membership in OneWorld only strengthens those JV positions for AA even though it isn’t AA metal.”
Never meant to insinuate AS is in a JV with anyone. I was referring to the BA and JL JVs that AA has in SAN. BA and JL do the flying. OneWorld JVs but of course AS isn’t a member of those JVs but they are a member of OneWorld so you’d naturally expect an AS loyalist to prefer BA or JL regardless of AS’ non-membership in those JVs. You’re right. Sorry my writing was confusing.
I was referring to why AA cares about increased OneWorld interest in SAN from their own JV partnerships (of which AS is not a member of those JVs or any) and then separately from their network thinking domestically (to be clear. Also not an AA-AS JV).
MaxPower – Oh I see, I misread it as well. AA’s JVs, yes. Thanks for clarifying.
but to be clear. Yes. I know there isn’t a “oneworld JV”. I was referring to the two separate JVs AA has in SAN.
Proper language and punctuation is all we have in a comment section. Sorry. I should’ve been clearer, particularly in my responses.
Have a great day! Really interesting article and the type I really enjoy.
I did find myself wondering about future allocation of (more?) gates? Perhaps that’s not known yet.
Thanks for your great articles. I hope your vacation was great.
and you responded to Bernando on the question.
thanks again for the great article.
DL – I do think AA is ok with this. AA understands this is about strengthening San Diego, and those are important markets. I wouldn’t expect any kind of retaliation.
cranky,
How many of those routes are served less than daily? I know PDX at least Southwest only flies it twice a week (Sat/Sun). Also curious how winter seasonal markets compare, I believe Southwest just announced OMA service for next winter while Alaska has EGE or some other ski-type markets
G – In the July schedule, Columbus, Milwaukee, Pittsburgh, and Tampa are 1x weekly and Cabo and Portland are 2x weekly on Southwest.
For Alaska, Anchorage, Jackson Hole, Missoula, and Puerto Vallarta are 1x weekly while Bozeman and Kalispell are 4x weekly.
Let’s get ready to RUMBLE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
What is PDEW?
passengers daily each way
Quick correction: Monterrey (with two r’s) is MTY in Mexico. Monterey (with one r) is MRY—the one in California that Alaska flies to from SAN.
With the new SAN-ORD service, I wonder how Alaska is going to work their schedule by having only one gate soon at ORD T2/E? Unless this replaces the soon to be discontinued SFO-ORD service? Just thought I’d throw these recent gates changes at ORD out there since Crain’s Chicago Business recently had an article;
*UA gains 6 gates – Location(s) TBD
*AA loses 6 gates – Location(s) TBD
*DL loses 3 of 10 gates – T5/M
*WN gains 3 Preferential Gates vs Common Use Gates – Location(s) TBD – >IMO T5/M 3 DL Gates<
*AC loses 1 of 2 gates in T2/E
*AS loses 1 of 2 gates in T2/E
Changes effective Oct 1st – Locations officially announced around June 1st
ORD gate reallocation numbers are not final. Airlines have until April 30th to accept or reject.
Correction: AA according to Crain’s Article might lose about 4 gates
Alaska has used AA gates when needed. This is just for “preferred use” / aka dedicated gates. Alaska & others still have access to common use gates.
Exactly, there are multiple common use gates on G which Alaska would be able to use, I’m sure.
These changes make AS’s purchase of VX look like a worse idea by the day.
The VX purchase still served one of its purposes: it kept JetBlue from getting the VX operations at SFO and LAX and made it more difficult for B6 to get free of the gradually but inexorably tightening noose of LGB. A VX-B6 tieup might have made JetBlue more competitive in the West Coast markets instead of the West now being nothing more than spokes coming out of JFK, BOS, and FLL.
I’m still not convinced that B6 would have had success out of LAX and SFO running what VX did there. VX was never going to be successful. But, their existence allowed for Brett to make my favorite image of a VX plane destroying cash.
Agreed, Craig. AS’s acquisition of VX was as much defense as it was offense. In the grand scheme of things, I think it worked out well. And hopefully AS gobbles up B6 after it has fully assimilated Hawaiian.
So what does any of these have to do with the new terminal? Are they fighting for gate space or what?
I think the huge increase in capacity at the new Terminal 1 will give WN the chance to strike back at AS’s dramatic increase in capacity. Right now, the current Terminal 1 is busting at the seams and is truly an awful passenger experience. Each concourse at Terminal 1 has 8 gates, but only has sufficient seating for roughly 3-5 gates. Terminal 1 is about as cramped as can possibly be. The new Terminal 1 will be head-and-shoulders better than the east concourse at Terminal 2 that serves AA and AS, perhaps providing Southwest with some advantage to possibly neutralize any negatives attributable to its new schemes.
Bernardo – The point is that there is room to add more flights because of the additional gates.
You’ve been calling attention to the SAN market for Alaska for a while. Nice to see it take root.
A question for me as a SFO-originating flyer: I would love to see a fresh analysis of Alaska’s network, and better understand what they’re doing in their non SEA markets? What should I expect from SFO? What’s changing in their domestic strategy?
It’s pretty clear they have been drawing down SFO flying; I used to be reasonably regular on SFO-BOS and noticed it’s now down to once a day; so my trip out there this month will be UA one-way and AS one-way given the frequency of service. Honestly, I think you could make an argument that long terms AS might be better served by beefing up both OAK and SJC flying as an alternative to SFO. Especially for folks in the South Bay doing intra-California flying SJC is a more attractive option. SJC also lets them feed JA flight. The terminals at SFO are nice, and the non-TSA screening there has been pretty reliable, but I do think that SFO currently has an unnaturally large market share compared to OAK/SJC. An in-depth look at the Bay Area airport market would be interesting here or on a podcast, Brent! My gut is that SJC curfew hurts it, and OAK is well Oakland, perhaps redevelopment of the Coliseum site in the future might improve things around the airport.
Yep, I like this suggestion for a deep dive. Bay area overall is an interesting one due to UA’s fortress increasingly focused on long haul, and the relative challenges of San Francisco Bay Airport @ Hegenberger Road, to say nothing of SJC and Santa Rosa.
Worthy of a pod or deep dive.
Shanan – I think SFO and LAX are just effectively regional hubs. The service there is mostly north-south (plus Hawai?i, of course). Then Alaska can rely on American and oneworld partners to fill in the gaps elsewhere.
I just wish they’d resurrect the MCI-SAN direct flight on Alaska…
The real issue for SAN is that there is no more runway capacity that will come online unless the airport is moved -which is not likely.
AS and WN will fight for market share in a market where size results in a barrier of entry to other players. The big 3 have it at LAX, UA has it at SFO, AS and DL have it at SEA. SAN is the last large west coast market to fight over and the only one where a legacy carrier is one of the top 2 carriers.
US airports – esp. on the coasts – have limited runway and airspace capacity expansion capabilities. at some point, fares will have to go up as capacity growth falls below GDP- but that has not happened yet.
based on AS and WN’s 1st quarter financial reports, neither is in a great position to win any drawn-out market share battles.
Given the tremendous amount of investment that has been made in the existing airport, I think the chances that the airport is moved are zero.
Many years ago, during the Clinton administration, there was a military base rationalization program (think DOGE but nicer and without the bluster). This provided a brief window of opportunity to take over Miramar (“Top Gun”) Naval Air Station for commercial use. There was talk here in San Diego of relocating the airport there (just about 12 miles away as the crow flies). It would have made great sense (there is plenty of room at Miramar to add a second runway), but the majority of San Diego was up in arms about making the change. Eventually, Top Gun was relocated to Fallon NV (weird because it is nowhere near the ocean) and the Marines took over Miramar.
Unfortunately the Carlsbad airport doesn’t have a long enough runaway to support anything bigger than a midsized regional jet. I suppose a second properly-sized airport in the greater San Diego metropolitan area could be built in far north Oceanside, but I think that would face some fierce backlash from those who live nearby. Or perhaps the Marines would be willing to give up part of Camp Pendleton (a massive swath of land right along the coast between San Diego County and Orange County) that could serve both north SD County and south Orange County.
Apologies for the diatribe. You are right, the runway capacity is very constrained, and even further so with the curfew. I think the only way to substantially grow at SAN is to upgauge aircraft.
Who’s moving into the new T1 with the new gate capacity? Presumably WN to vacate old T1 to be demolished. But that’s only 10 gates…
Is AS also moving over, permitting the added flights? Or is AA moving to vacate gates for AS?
Something has to change in the AA/AS pier for AS to add this many flights….