Paula,
I appreciate your prompt, well-worded, and enthusiastic answers. If everyone loved their company as much as you do, the world would be a much better place.
However, I think you may have missed the point I was trying to make, as well as the somewhat similar point of the person talking about Chicago.
I was talking more about the word "competition" than the word "fare"...although I recognize that those two are like the chicken and the egg. It just sat funny with me that the blog essentially said they're going to increase competition by (eventually) eliminating a competitor.
And if I may speak for the person who was talking about Chicago...consider three phases: 1) Southwest doesn't serve a particular city yet. 2) Southwest comes to town, and the "Southwest effect" is felt. 3) Other airline(s) bail out of that city or airport or are purchased by Southwest (in the case of the proposed purchase of F9).
You're absolutely right that in phase 2, fares go down. No doubt about that.
But I believe the other poster was referring to phase 3. If one or more players exit a market (or stay in a market, but stop flying a large enough set of routes), the remaining players almost invariably raise fares.
I think it's entirely reasonable to predict that once DEN moves from being the hub/major focus city of 3 airlines to only being that of 2 airlines, the fares are likely to go up. Not that I'm necessarily saying that's a bad thing...I'd like it if airlines raised fares across the board, and used that money to pay their employees more (and I say that as someone who is no longer in the industry).
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Very interesting. The one thing I don't get is, how does this "boost low-fare competition...in the Denver market"? It seems to me that eliminating one competitor would in fact decrease competition. Or are the execs anticipating that this would create a vacuum in the DEN market, which would prompt other LCCs such as FL and B6 to expand there? Wouldn't the latter simply prompt a defensive response from WN/F9?
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