Southwest Airlines is scheduled to announce plans Tuesday to offer nonstop service from Baltimore to Boston, adding a second major market to its portfolio in little more than a week as it works to build business despite the downturn in travel amid the recession.
Beginning Aug. 16, Southwest will schedule 10 flights daily to Boston’s Logan International Airport, including five each from BWI Thurgood Marshall Airport and from Chicago. Last week, the air carrier began booking flights to New York’s LaGuardia Airport from Baltimore and Chicago. Southwest is the largest carrier at BWI.
The moves come after Southwest announced cutbacks in some routes as the airline industry suffers from a pullback in consumer and business spending on travel. Adding big markets such as Boston, New York and Minneapolis-St. Paul expands customer choices and provides prospects for new business. But the new cities are a departure from the trademark Southwest model that focused on airports that aren’t as busy and are less likely to interfere with the carrier’s on-time record.
Bob Jordan, Southwest’s executive vice president of strategy and planning, says the carrier’s original model has evolved during the past 20 years and the idea that the airline only flies to smaller airports is “a bit of a misconception.”
“We’re in bigger airports – Los Angeles, Oakland, Phoenix. … We don’t avoid larger airports,” said Jordan, who pointed out that recent reductions in capacity have allowed the airline to replace flights that were losing money with those that have more profit potential.
“We’re flying between 90 [million] to 100 million customers each year,” he said. “And we have a built-in group of people who want to go to places like New York. They want to go to Boston. … If you’re not there, they can’t fly you. So we need to be there.”
Southwest serves smaller markets to the north and south of Boston with several daily flights to Manchester, N.H., and Providence, R.I. The airline said those flights will continue. In addition, customers flying those two New England routes will be offered the same fare price as the Boston service, which starts at $49 each way with a 14-day advance purchase.
The move is not a surprise: Southwest executives expressed interest this year in launching service at Logan to expand their business travel profile.
But analysts also see Southwest as simply following the money in an effort to shore up revenue in a challenging economy.
“Southwest doesn’t have to go into these airports, but the question is, why not?” said Robert Mann, president of R.W. Mann & Company Inc., an airline industry analysis and consulting firm in Port Washington, N.Y. “There is a huge pot of revenue that hasn’t been tapped. They need the revenue.”
The new route means Southwest will go head-to-head with AirTran, which provides nine daily nonstop flights between BWI and Logan, with one-way airfares starting at $59. The two airlines compete on service from Baltimore to several cities, including Las Vegas, Chicago and Los Angeles. Mann predicts the two airlines will have plenty of business on the Boston route because AirTran attracts more business travelers.
For some passengers, choosing between the two airlines may boil down to cost. Southwest’s everyday fare will be set at $129 each way, about half what other airlines charge. Southwest also has fewer add-on fees, while AirTran charges a $15 checked bag fee and some seat selection fees.
However, carry-on baggage is less important to the business flier, who might prefer AirTran’s two-tier cabin seating, which allots more space to its business class passengers for a $49 upgrade fee on many flights. Southwest offers business select ticketing, which includes several perks, but upgraded seating is not one of them.
“AirTran has a different customer today. They have a two-class operation,” Mann said. “They serve many more markets beyond Atlanta than Southwest will serve on a published connecting basis. It will just be a different customer base. AirTran has many more business travelers.”
Cheri Parlaman, 34, a public affairs specialist who lives in Dundalk, has avoided Southwest on recent trips to Boston because she didn’t want to drive from Manchester or Providence.
“It’s problematic now because they don’t fly into the major airports,” Parlaman said. “We don’t want to have to rent a car.”
Last time, she flew AirTran, but when she plans her trip to Boston this summer, Parlaman said that she will consider taking Southwest.
“I like Southwest because you get in, you get on the plane, sit down and go,” Parlaman said. “I’m not looking for lots of frills. I just want to get there.”