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11-23-2010
10:19 AM
8 Loves
Please begin service to Cincinnati. Average fares rose 17 percent between the second quarters of 2009 and 2010, making the average fare at Cincinnati the seventh highest of the nation's busiest 100 airports:
http://www.bts.gov/programs/economics_and_finance/air_travel_price_index/html/table_08.html
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Please begin service to Cincinnati. Average fares between Cincinnati and Chicago rose from $147 one-way to $251 one-way--an increase of 70 percent--between the second quarters of 2009 and 2010 (the latest quarter for which data is available).
I know you have a lot on your plate with three new destinations in March, but Cincinnati is a tremendous opportunity!!
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Why did Greenville (GSP) get selected for new service instead of Knoxville (TYS)?
In the first quarter of 2010 (the latest quarter for which data is available), TYS generated more traffic than GSP to Austin, Boston, Buffalo, Chicago, Denver, Ft Lauderdale, Ft Myers, Houston, Jacksonville, Kansas City, Las Vegas, Milwaukee, New York, Oklahoma City, Omaha, Ontario, Orange County, Philadelphia, Phoenix, Portland, Sacramento, San Antonio, San Diego, Seattle, Tampa, Washington, and West Palm Beach.
In fact, TYS generated more than twice as much traffic than GSP to Albuquerque, Baltimore, Los Angeles, New Orleans, Norfolk, Orlando, Raleigh, and San Francisco.
Obviously, Southwest will offer nonstop flights from GSP to Baltimore, Chicago, and Orlando; however, TYS would support those flights better.
For example, of the 5,885 city pairs the Department of Transportation recorded data for, the city pair with the twenty-second most expensive average fare was between TYS and Washington. Everyday, 141 people flew between TYS and Washington, and they paid an average fare of $413.05 one-way. Everyday, 175 people flew between TYS and the Baltimore/Washington region, and they paid an average fare of $392.29 one-way. Meanwhile, only 96 people flew between GSP and the Baltimore/Washington region, and they paid an average fare of just $264.65 one-way. The Knoxville Airport plans to grant $500,000 in incentives to an airline that will provide low-cost service to BWI.
Furthermore, during the same period, the average fare from Chicago to both TYS and GSP was statistically identical. The average fare from Chicago to GSP was $285.74, while the average fare between Chicago and TYS was $285.60. An average of 72 people flew daily between Chicago and GSP, while 108 people flew daily between Chicago in TYS. In other words, the average fare from Chicago to both GSP and TYS was the same, yet TYS generated 50% more traffic.
While TYS benefitted from lower fares than GSP to Orlando, it generated 276 daily passengers to Orlando, while GSP generated only 84. Is it practical to compete between GSP and Orlando? Allegiant has already reduced fares between GSP and Orlando, and traffic has not been stimulated enough to support daily 737 service. Furthermore, few passengers connect in Orlando. Meanwhile, AirTran recently began daily nonstop flights between TYS and Orlando.
In the first quarter, GSP generated ten or more passengers to 39 Southwest destinations. The combined total of all those passengers was just 1,521. Obviously, Southwest will stimulate traffic, but will it collect enough of that stimulated traffic to support eight 737 flights in/out of GSP, let alone enough to expand in the future? GSP's most popular destination is New York, but Continental and Delta offer nonstop flights to New York. GSP's next most popular destination is Dallas, but Southwest will collect none of that traffic unless it offers flights from GSP to Houston or St Louis to circumvent Wright Amendment restrictions. GSP's next most popular destination is Detroit, but Delta offers four daily nonstop flights from GSP to Detroit.
Meanwhile, in the same period, TYS generated ten or more passengers to 45 Southwest destinations. The combined total of all those passengers was 2,085.
Fares from TYS are not cheap. Between the first quarters of 2009 and 2010, average fares from TYS rose 20% to Los Angeles, 24% to New York and Philadelphia, 26% to Baltimore and Washington, 40% to Chicago, and 48% to Denver, not that they were affordable in the first quarter of 2009.
Initiating service to TYS will not threaten Southwest's operation at Nashville. When Independence Air offered two daily nonstop flights from TYS to Orlando and Tampa, the average fares from TYS to Orlando and Tampa were slightly less expensive than the average fares from Nashville to Orlando and Tampa. However, traffic still rose between Nashville and Orlando and Tampa.
Honestly, I hope you thrive in the Upstate. But in the end, Greenville and Knoxville are similar markets, and Greenville was selected while Knoxville was rejected. I couldn't help but wonder why.
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What happened to Knoxville? Why about Knoxville made it rank lower than Greenville/Spartanburg? Of the 100 busiest airports in the nation, Knoxville has the fourth highest average fares in the nation:
http://www.bts.gov/press_releases/2010/bts025_10/html/bts025_10.html
Where will you fly from Greenville/Spartanburg? In the third quarter of 2009, the latest for which data is available, Greenville/Spartanburg's most popular destination was Dallas, and only 113 passengers flew between both cities. But the Wright Amendment won't allow nonstop service. The next popular route was Philadelphia, in which 102 people flew daily. But is it really practical to compete with US Airways' three daily flights? The next most popular route is New York, in which 92 people fly. But slots at LaGuardia prevents a nonstop flight. The next most popular is Orlando, in which 91 passengers fly. But Allegiant Air already offers low fares, and 91 passengers is not enough to support 737 service because of competition from another low-fare airline, not to mention few connecting passengers. The next most popular route is Detroit, in which 91 passengers fly. But is it practical to compete with Delta's three flights on that route?
http://ostpxweb.dot.gov/aviation/x-50%20Role_files/consumerairfarereport.htm
Unlike Charleston, Knoxville has high fares, and unlike Greenville/Spartanburg, Knoxville generates more traffic, and focuses that traffic cities that have large Southwest Airlines operations. Knoxville generates more traffic to Albuquerque, Austin, Baltimore, Boston, Chicago, Dallas, Denver, Ft Lauderdale, Kansas City, Las Vegas, Los Angeles, Minneapolis, New Orleans, New York, Orange County, Orlando, Phoenix, Sacramento, San Antonio, San Diego, San Francisco, Seattle, St Louis, Tampa, and Washington than Greenville/Spartanburg.
For example, in the third quarter of 2009, the latest for which data is available, the most expensive average fare between any two cities throughout the entire nation in which more than 100 people flew everyday was between Knoxville and Washington, DC, where the average fare was $401.48. Knoxville generates more traffic to both Baltimore and Washington than, even though it has higher average fares. An average of 152 passengers fly between Knoxville and Washington/Baltimore daily, while only 77 passengers fly between Greenville/Spartanburg and Washington/Baltimore daily. Meanwhile, the average fare between Knoxville and Washington/Baltimore was $366.32, while the average fare between Greenville/Spartanburg and Washington/Baltimore was $283.57.
Obviously, Knoxville leaks passengers to Nashville, but service at Knoxville would not threaten Southwest's operation at Nashville. When Independence Air offered nonstop flights from Knoxville to Orlando and Tampa, the average fares between Knoxville and Orlando and Tampa were lower than the average fares between Nashville and Orlando and Tampa, but passengers still rose between Nashville and Orlando and Tampa.
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Any plans to initiate flights from Raleigh/Durham to Columbus, Hartford, or Saint Louis since American plans to eliminate those routes?
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Yes, we need service at Knoxville!!
BTW how do I access Red Belly Radio? I've been fascinated by airlines' schedule planning systems.
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I'm so thrilled!! Keep up the good work!!! I love it when you add new destinations, not merely new airports. I'm predicting that one of the inaugural flights will be to Saint Louis. But that's just a guess...
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I'm just thrilled!!! Keep up the good work!!! I'm guessing that one of the inagural flights will be to Saint Louis; it just seems to make a lot of economic sense to me. But that's just my guess.
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Fewer flights, same number of Employees. When is the last time that happened in the airline industry? With more Employees per customer, I predict Southwest Airlines will top the customer satisfaction charts!!
BTW, I'm itching to see you in a new market...
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I have always been anxious to see Southwest expand, particularly now since ALL the other airlines are trimming their schedules. But now I'm reading Jack Welch's book, Winning, and I seriously admire you guys for sticking to your principles and being so prudent about expansion.
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I received a postcard from Southwest Airlines the other day stating that you had assigned an internal tracking number to my file. What is the website I should visit to enter my code and view my profile? Thanks!!
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06-10-2008
04:39 PM
12 Loves
I compared Continental Airlines' flight scedules between Houston Bush and cities that Southwest Airlines does not serve nonstop from Houston between July 1 and October 1. During that period, Continental plans to drop one flight to Amarillo, Columbus, Detroit, Ft. Myers, Indianapolis, Kansas City, Lubbock, Norfolk/Virginia Beach, Omaha, Pittsburgh, Reno/Tahoe, San Jose, Tucson, and Washington Dulles. It also plans to terminate two flights to Louisville, Raleigh/Durham, San Francisco, as well as three flights to Seattle/Tacoma. Why don't you explore these routes? It would be ridiculous to add a flight to all these destinations, but some of them may be profitable. Fuel prices are higher than anyone could have imagined, but Southwest Airlines has a legacy of turning an obstacle into an advantage. As so many airlines shrink dramatically, Southwest has the opportunity to expand at their turfs.
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