Southwest Looks East in Move to Expand Routes : Aviation: The airline is expected today to announce new service to Baltimore--its first Atlantic coast destination.
Southwest Airlines, whose low fares have won over passengers and run off competitors across the West, is preparing to fly into the high-priced skies over the East.
In a move that could shake up fares and competitors, Southwest is expected to announce today the beginning of service out of Baltimore--the airline’s first East Coast destination.
“When they come into the market, the fare structure drops and the traffic goes up,” said Jon F. Ash, managing director of Global Aviation Associates, a Washington-based consulting firm.
Although the Dallas-based airline will not reveal any specifics, Southwest Chairman Herbert Kelleher is scheduled to make an announcement today from the East Coast. A spokeswoman at Baltimore-Washington International Airport would say only that there was a news conference scheduled at the airport today.
Southwest is expected to kick off Baltimore service with flights to Chicago and Cleveland--its easternmost destination now--according to press reports. The company has refused to comment on the reports, saying only that it plans to add another city to its route system this year.
USAir--the largest carrier in the Northeast--claims more than half the passenger traffic at Baltimore and is the most vulnerable to Southwest’s incursion, industry analysts said.
But USAir, which has pulled out of California airports served by Southwest, will not give up Baltimore without a fight, said Charles Roumas, vice president of marketing at Travel One, a large travel agency in the Baltimore area.
“There is probably going to be a price war as a result of Southwest in the marketplace,” Roumas said.
Industry analysts have little doubt that Southwest--the only major airline to turn a profit last year--will expand in the East as it has in other parts of the nation. The airline’s low costs and point-to-point service have been hailed in an industry that has been mired in losses for the last three years.
In that time, Southwest has become the largest carrier within California as it has cut fares and added flights. Competitors have been forced to slash prices as well as abandon cities in the face of the Southwest onslaught.
Since the demise of People Express in the mid 1980s, airline fares within the Northeast rank among the highest of any region in the country, industry analysts said. For example, an unrestricted one-way ticket from Baltimore to Cleveland costs more than $300. In contrast, a flight between Los Angeles and San Francisco--which is about the same distance--costs no more than $90.
Despite heavily congested Northeastern airports--such as National in Washington, La Guardia in New York and Logan in Boston--industry analysts said there are plenty of secondary airports that can accommodate Southwest’s operation.
At Baltimore, Southwest can obtain enough gates and landing and takeoff times to offer its frequent, low-cost service, which turns a profit even with the low fares, said David Ulmer, vice president of Roberts & Associates, a Hayward, Calif.-based consulting firm. A Southwest jet typically spends only about 15 to 20 minutes on the ground between flights--compared to about an hour for most competitors--to allow it more time to earn money in the air.
“I think Southwest’s strategy will fly beautifully in that region,” said airline industry consultant Ernest Arvai, who expects fares will also fall at Washington airports.
“If prices remain at more than $300 out of National Airport, I think some of American or United customers would come over to Baltimore to take advantage of the differential,” Arvai said.
