LoneStarMike

I stumbled across this gem while surfing the net and thought it was fascinating. It's a study of Southwest's absence in top US markets from 1992 through Q2 2003. It's very detailed and answers a lot of questions that have been asked on this board.

Analysis of Southwest's Absence in Top US Markets

It was obviously written fairly recently as it mentions PHL.

This is just one small excerpt:

The biggest opportunity for WN will be in Philadelphia or Pittsburgh, with the financial difficulties experienced by US Airways in contrast to the financial leverage of WN. In October, 2003, WN announced that it will begin operations in Philadelphia. This behavior could have been predicted by looking at the data used in this research. WN has shown cleverness in its acquiring of markets. In addition, since Pittsburgh is not economically as strong as Philadelphia, Southwest has a better chance of success with the latter city.*
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In addition, the most repeated top markets that WN has never served directly are New York - Detroit and Baltimore - Detroit. These markets are always ranked in the top 100 U.S. markets and are high yield markets. The main threat for WN in these markets is NW, which owns more than 65 percent of the market shares in 2003 between New York and Detroit, and has a strong dominance in Detroit. On the other hand, WN has the opportunity to be successful with these two markets since the airline already has entered these regions by flying to ISP, DTW and BWI.

Finally, it can be noticed that since the early years, Dallas Love Field (DAL) has been a bottle neck in WN's network in terms of connectivity because of the Wright and Shelby amendment passed in the 1970's, which limits operations from DAL. It has pushed WN to inefficiently serve the top markets between the East coast and Dallas area. Every flight coming in and out of DAL connects in nearby states, which does not allow WN to enjoy its economy of density within these markets. Nevertheless, this unique situation is also advantageous for WN since it keeps the competition away from DAL. If the benefits of this situation overcome the drawbacks for WN, it can be predicted that WN will not change the network strategy out of DAL. However, if WN wants to increase its number of direct flights in and out of Dallas area, it can be predicted that WN would increase its serving of other airports in that region.*

Mike

SAT Lawyer

How can the author pose the question whether "the benefits of [the] situation [at Dallas Love] overcome the drawbacks"? That's an absolute no-brainer. WN has a stranglehold on the short haul traveler flying within and to and from Texas. And its because of the Wright Amendment.

Leisure travelers already love WN for the prices. And there are plenty of us happy to gobble up seats on the shorthaul service between DAL and HOU, AUS, SAT, OKC, MSY, etc. Longhaul service from DAL -- while perhaps superficially appealing -- is not critical for WN.

Meanwhile, the loss of longhaul business travelers isn't as big a deal as might be suggested at first blush. We see how well the so called full service carriers are doing even with their stranglehold on longhaul business travel.

And WN has carved out a lucrative shorthaul niche out of DAL. Most business travelers don't really need a first class seat and some warm nuts on a 45 minute flight. And an airport lounge is overkill on such a short flight. Who wants to sit around an airport for a longer time than it takes to fly between the cities? With Rapid Rewards drink coupons, we're even covered as far as alcohol goes. But many of these advantages dissipate as WN's flights grow in lenght. So the shorthaul limitations imposed by the Wright Amendment actually work to accentuate WN's strenghts, and minimize its shortcomings.

The Wright Amendment has been very helpful to WN. A virtual monopoly at DAL. Meanwhile, AA enjoys a similar advantage at DFW. I don't see how any reasonable person could even think otherwise.

cabinpressure

DTW-LGA, DTW-JFK, and DTW-EWR may all be popular, lucrative markets. But I doubt there is much demand for DTW-ISP.

Fares to LGA are already very attractive thanks to Spirit, and JFK and EWR have DL and CO non-stops to/from DTW, so NW doesn't have a total monopoly on any of the routes.

And I won't beat the dead horse of DTW-BWI.