For some airports, the Southwest watch is a little like “waiting for Godot”, almost a surreal drama. One airport that is going through the waiting game now is Charlotte Douglas, the North Carolina airport that Southwest chief executive Gary Kelly says is high on the low-cost king’s list of future cities, writes David Field.
What happens next in the Carolinas – when Southwest or for that matter JetBlue chooses a city in the state - will say much about hubs and their legacy carriers.
Charlotte was long been dominated by US Airways, which inherited it from Piedmont in their 1987 merger and made it into one of its three international gateways. As US Airways battled through two bankruptcies and the downturn, Philadelphia became its international growth point, and Charlotte lost some overseas service. But it still had its strong local traffic base - the city is a major regional banking centre and has some important industries such as BF Goodrich.
The strength of US Airways had deterred low-cost players from entering the market and they had gone elsewhere, with Southwest moving into Raleigh/Durham, about 125 miles away, after American pulled out, and after local low-fare contender Midway collapsed. Charlotte had prospered and thrived and by 2005 was breaking its own records with passenger boardings up 12% year-over-year.
Southwest’s announcement that Charlotte was short listed came as US Airways merged into America West. The domestic growth of US Airways led the carrier to add two new banks of connecting flights there, motivated in part by the fact that low-fare competition was not yet a major factor at the airport.
Others though weren’t waiting for change, chief among them the aggressively expanding low-cost carrier AirTran Airways. It began Charlotte service in May 2005 with four daily flights and as it focuses on adding spokes to its Hartsfield hub, AirTran will add two more daily nonstops in May.
Intervistas GA2 airports consultant Howard Mann says the crucial factor will be network value: if the challengers choose routes that are synergistic with their networks, they will prosper while giving US Airways some competitive manoeuvring room.
The question then becomes: would Charlotte become a case of peaceful coexistence, like Phoenix, the new US Airways home town, or would it be more of a battleground, like Philadelphia, where US Airways has dramatically lost market share to Southwest?
In Phoenix, America West had learned to live with Southwest in a large market that is one of the most important airports in both systems. Now US Airways, the carrier competes by offering a differentiated service, with reserved seats, a premium section, and international flights on its own, as well as through a global alliance and through loyalty plans. At Philadelphia, though, US Airways has had a difficult time, having lost its dominant status since Southwest entered the city in 2004 in its largest one-time expansion. Stay tuned.
DATA SOURCE: Innovata schedule data.
Source: Airline Business
