As part of the festivities celebrating our reentry into San Francisco International Airport (SFO) this Monday, Southwest Airlines also announced that we're going to supplement our initial SFO service by adding eight daily nonstops between SFO and Los Angeles Int'l Airport (LAX) effective November 4. This will supplement our existing 20 daily roundtrips (which operate on the hour or half hour all day long) between LAX and Oakland International Airport (OAK), which is quite literally just across the bay from SFO. While SFO isn't a "brand new" airport for Southwest (we served the airport for 19 years prior to discontinuing service in early 2001 due to congestion and cost issues), we've never flown between SFO and LAX. And it's about time–the SFO (and OAK) to LAX market has an interesting history.
Because I am a hopeless airline geek, I took a look at industry data going all the way back to 1979, which is roughly when I got into this insane industry. Back then, the SFO-LAX air passenger market was the largest in the country, with 49 daily flights on nine airlines with about 7,400 seats a day going back and forth, carrying roughly 1,520 people each day paying an average of $122 in 1997 dollars. Remember, back then, load factors were lower, and there were lots more connections going on, so the percentage of folks flying nonstop from origin to destination was much lower. By comparison, LAX to OAK in 1979 was served by 10 flights on 2 airlines, with about 1,800 seats serving only about **seven** (yes, SEVEN) local passengers flying between the two airports per day each way, and they paid an average of $139 in 1997 dollars. I guess that market was all connecting passengers.
Fast forward to now. SFO-LAX is far, far down the list of largest markets. While still large, today five airlines offer 37 daily departures with about 4,600 seats a day (and of the 9 that flew the route in 1979, only 3 survive)….but it serves only 1,100 passengers a day, who paid an average of $127–a roughly 32% decrease in the size of the market with no increase in average fare. Compare that with LAX-OAK, where there are now about 3,100 seats on 28 daily flights by 3 airlines (and neither of the two that flew the route in 1979 are still in business). However, even though LAX-OAK still has fewer seats than LAX-SFO, it carries nearly 1,700 local passengers each day (far more than LAX-SFO), who pay an average of just $87–a savings of $40 over LAX-SFO!
So, the traveling public has shifted in large numbers from LAX-SFO in favor of LAX-OAK. Wonder why? (Anyone? Anyone? Bueller?) It's fare driven…and the fare driver has been Southwest Airlines. Note the average fare difference between LAX-SFO and LAX-OAK. While I won't make predictions here…if I were a bettin' man, now that Southwest is flying between LAX and SFO, I'd bet that the fares in that market will drop like Brittany Spears' approval rating. We will bring our pricing to the market, which will give far more people the Freedom to Fly….and we'll do just as we have everywhere else in this Country–grow the market!
Welcome back, SFO, we've missed you….and welcome to the family, SFO-LAX!
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