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|Southwest Airlines to begin 18 daily flights at Newark next year|| Rate Topic
|Posted: Sun Aug 29th, 2010 12:51 pm||
Go Yankees !!!
Southwest Airlines will start flying out of Newark Liberty International next spring in a move that should dramatically lower fares in the New Jersey market, analysts said.
Southwest will lease take-off and landing slots from United and Continental airlines as those two carriers sought to satisfy regulators’ concerns about competition from their proposed merger, creating the world’s largest airline.
Soon after the airlines’ announcement today, the justice department said that it has closed its anti-trust review of the merger.
Southwest will have 18 daily flights from Newark that will phase in between March and June of next year. Southwest already operates out of LaGuardia International Airport in New York and Philadelphia International Airport.
“We’ve seen tremendous demand for Southwest Airlines in the New York City/Newark area in the past year,” said Bob Jordan, Southwest Airlines executive vice president of strategy and planning. “Adding Newark provides an excellent complement to our LaGuardia and Long Island service. This service also will provide a needed injection of low fares and competition into the New York/Newark market.”
Jordan declined to say yesterday which cities Southwest will fly to from Newark.
When the discount carrier enters a new market, its arrival is called “The Southwest Effect.” The carrier typically sells aggressively lower tickets in new cities, said Rick Seaney, chief executive of FareCompare.com, a travel website.
“On the routes they announce from (Newark), prices are likely to drop dramatically,” he said. “For example, we saw prices for non-stops drop by over half when Southwest entered Minneapolis on the new Chicago route. Over time, those initial discounts will slowly rise, but typically not back to previous levels.”
The number of flights Texas-based Southwest will operate should be enough to hold prices down in Newark along with pressure from other discount carriers such as AirTran Airways and JetBlue Airways, according to Terry Trippler, owner of Rulestoknow.com, a web site that lists airline regulations for passengers.
“It will force other airlines to match them in nonstop markets,” Trippler said. He pointed out that Southwest became the No. 1 carrier in Baltimore and No. 2 in Philadelphia by grabbing passengers from established airlines.
“When they went into Denver, they went head to head with United and Frontier and really expanded,” he said.
Unlike other airports, Newark is slot-constrained and will not allow Southwest to dramatically add more flights as it typically does in some cities. So, the airline will probably fly larger 737s that carry more passengers, according to Tom Parsons, chief executive of Bestfares.com.
“They are buying larger 737s that can hold an extra 40 passengers,” he said. “I would suspect they will build traffic into their hubs. When they leave Newark, they want that plane full, but it could go in 10 or 15 different directions.”
That means Southwest might decide to fly to cities where it already has a strong presence such as Chicago, Denver, St. Louis, Houston, Las Vegas, Phoenix and possibly Orlando, he said.
“From Chicago they can feed St. Louis, Kansas City and Omaha” and attract high-fare paying business travelers, he said.
The move is a gamble for Southwest, according to Christopher Staab, head of Conferences at Airline Information, which organizes airline industry conferences and events.
“Southwest has never flown to big airports,” he said. “Instead, they have always flown to lower-cost, secondary airports to keep their fares low. That model has reached its saturation point and in order to grow, Southwest has had to change their business model.”
United and Continental, which operate 442 daily round trip flights from Newark, said they will continue to fly to all the communities they serve. They slot agreement with Southwest will have “minimal impact on the combined carrier’s” route network, the companies said.
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|Posted: Sun Aug 29th, 2010 01:06 pm||
|Flying on SW drives me crazy - BUT this move in positive for consumers as their rates are low and that typically drives the rest down at the airport also.
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