One of the issues in the airline biz is whether Southwest Airlines can make its business model work in smaller markets. Traditionally, Southwest only has almost exclusively served places that could support at least 10 flights a day on 137-seat aircraft. In other words, larger markets. Times change, and particularly after the AirTran acquisition, the bar for Southwest (domestic) service got lower, sometimes down to as few as three flights a day. The issue going forward is whether Southwest can be competitive in such smaller markets with just a flight or two a day to a couple of its hubs when American, Delta, and United are offering many more flights a day on smaller aircraft to their hubs.
The initial signs aren’t good for the Dallas-based carrier: Southwest announced last week that it will be dropping three of these smaller destinations: Branson, MO, Jackson, MS, and Key West, FL in June. All three currently have three or four flights a day. While this does not necessarily mean that the carrier is doomed in other smaller markets, it’s a situation that certainly bears watching. And yes, this has a potential impact here in Charlotte: Southwest only has six flights a day to the Queen City with no more than two to any destination (Baltimore x 2, Chicago Midway x 2, Orlando x 1, Houston Hobby x 1) — Charlotte is by no means a small market, though Southwest offers flights from here as if it were one.
Speaking of Southwest and smaller markets, the airline has said that will bid aggressively on the Washington Reagan National (DCA) slots that American Airlines and US Airways are having to divest themselves of to approval of their merger. Should Southwest succeed in acquiring a significant number of additional DCA slots, it will put more pressure on its smaller stations to justify their continued existence in Southwest’s network. Southwest is not growing its fleet and the aircraft to fly additional DCA routes have to come from somewhere. Even if such smaller markets remain, it would make it harder for such places to see extra flights.
