SWA Headed for PIT

[SWAInflt]

http://www.postgazette.com/pg/05005/437595.stm

 

[canyonblue]

Last month we had someone from schedule planning onboard. They never let out secrets about new cities but she did say that when the first is announced you can guess the next.

CLT?

 

[I.P. Freley]

At least the airport will see increased utilization. That airport is too big and too nice a place to be the ghost town it's now become.

 

[LoveGun]

Way to go Southwest! Hope to see you guys in CLT soon. But, please don't put US Airways out of business untill you hire me.

 

[FlyBoeingJets]

Southwest Airlines to Serve Pittsburgh in 2005! Airline Will Announce Flights, Fares Soon
Wednesday January 5, 2:00 pm ET

DALLAS, Jan. 5 /PRNewswire-FirstCall/ -- To celebrate the New Year, Southwest Airlines (NYSE: LUV - News) announces its newest city -- Pittsburgh! The low fare carrier will arrive in the Steel City in May 2005 to bring Allegheny County area residents its fabled low fare high quality Customer air service. Fares and flight schedules will be announced in early 2005.

[size=-2]ADVERTISEMENT[/size]
[url="http://us.a1.yimg.com/us.yimg.com/a/ch/charles_schwab/schactive_300x250_102704.gif"]http://us.a1.yimg.com/us.yimg.com/a/ch/charles_schwab/schactive_300x250_102704.gif[/url]"Pittsburgh is a great addition to our system -- this is a great community, a great airport, and a wonderful opportunity for Southwest," said Gary Kelly, Southwest's chief executive officer. "Southwest always strives to be the hometown carrier in each market we serve, and we are thrilled to call Pittsburgh our newest hometown."

Southwest's breadth of service stretches from coast to coast and border to border with more than 2,900 daily departures serving 60 airports in 31 states. Pittsburgh will become Southwest's 61st airport.

"I am excited to welcome Southwest Airlines to the Pittsburgh region. Throughout the year, I have worked with the airport authority and community leaders to ensure the long term success of the Pittsburgh International Airport," said Dan Onorato, Allegheny County Chief Executive. "Today, we have made a significant step forward with the addition of Southwest Airlines."

"The airline's commitment will provide our region's business and leisure travelers with truly competitive service, more travel selections and new opportunities. I am also pleased that Southwest Airlines will benefit from our world-class airport and highly-trained workforce. We look forward to a long, mutually beneficial partnership," Onorato added.

"It has been our goal to attract the startup of Southwest in May, our passengers will be provided with more competitive choices at Pittsburgh International Airport," stated Glenn R. Mahone, Chairman, Allegheny County Airport Authority.

"This announcement today is the result of a great deal of hard work, careful planning, creative enterprise, and an unwavering focus on this important vision. The Airport Authority is elated that Southwest Airlines will be bringing its unique brand of air service to Pittsburgh International Airport," added Mahone.

Historically, when Southwest enters a new city, fares drop dramatically and demand for travel increases. The U.S. Department of Transportation (DOT) in a 1993 study described the phenomenon as the "Southwest Effect." Examples include:

• From Philadelphia International Airport, Southwest initiated nonstop service to Providence, Chicago, Orlando, Tampa Bay, Phoenix, and Las Vegas in May 2004. Southwest's impact was felt immediately as traffic on these routes increased more than 51 percent and average fares decreased more than 37 percent.
• Southwest service between Chicago Midway and Philadelphia started on May 9, 2004, with three nonstop flights daily. Traffic more than doubled from Chicago Midway while average fares declined 35 percent.
• Rhode Island's T.F. Green Airport: After Southwest started service in 1996, T.F. Green became the fastest growing airport in the nation, as overall airport traffic jumped 88 percent during Southwest's first year of service.
• Albany, N.Y., International Airport: Between the introduction of Southwest's service on May 20, 2000, and the end of that year, passenger boardings increased 22.5 percent to a record 1.44 million.
• Long Island MacArthur Airport (Islip): In the first full year of Southwest's service (March 1995-1996), airport passenger traffic rose 133 percent.
• Between Hartford, Conn., and Baltimore/Washington: The average one- way fare was reduced from $146 to $55, and after the first eight months of Southwest's service (Southwest began service in Hartford, Conn. in October 1999) on this route, passenger traffic increased from 19,000 to 92,000 passengers per quarter (this route went from being the 1,063th busiest city pair in the nation to 248th).
• Between Baltimore/Washington and Chicago Midway Airport: When Southwest began service on this route in September 1993, only 3,530 passengers per quarter paid an average one-way fare of $121. By fourth quarter 1997, more than 100,000 passengers per quarter were paying an average one-way fare of only $79 (this route went from being the 240th busiest city pair in the nation to the 43rd).

"Southwest can't wait to provide all of Allegheny County and the surrounding region with its Legendary Customer Service and low fares," said Kelly. "The Pittsburgh International Airport will be a great addition to our system."

For more than 33 years, Southwest has been in the business of connecting people-whether they are business executives looking to "close the deal" or loved ones gathering for a special occasion. More than 65 million people each year board Southwest's young fleet of Boeing 737s to fly across the state or across the country at fares so low that it sometimes can actually cost more to drive!

In January 2001, Southwest introduced new aircraft with a fresh canyon blue paint scheme and cool, comfortable, saddle tan leather interiors and seats. The entire fleet is expected to be converted to the new design and interiors by the end of 2005. Southwest is now in its 33rd year of operation and has reported 31 consecutive years of profitability. Based in Dallas, Southwest operates a fleet of 419 Boeing 737s with an average age of 9.2 years -- one of the youngest pure jet fleets in the domestic airline industry.

 

[canyonblue]

Southwest to begin service in Pittsburgh

Wednesday January 05, 2005
By DAVID KOENIG
AP Business Writer
DALLAS (AP) Southwest Airlines Co. said Wednesday it will begin service in Pittsburgh in May, a move that experts said could further threaten bankrupt US Airways Group Inc., the dominant carrier there.

Chief executive Gary Kelly called Pittsburgh ``a great addition to our system ... and a wonderful opportunity for Southwest.''

The airline did not announce its Pittsburgh schedule or fares.

US Airways, the nation's seventh-largest carrier, weakened by competitors who have cut fares, has said that if it can't reduce labor costs it could begin liquidation this month.

US Airways suffered a customer-relations nightmare over Christmas, when a combination of bad weather and absent employee caused about 10,000 bags to pile up at its hub in Philadelphia. The company did not immediately return a call for comment about Southwest's announcement.

Last May, Dallas-based Southwest moved into Philadelphia, one of US Airways' main airports, and has since expanded service there, forcing US Airways to cut fares. Southwest said traffic on routes to Chicago, Orlando, Tampa Bay, Phoenix, Las Vegas and Providence, R.I., rose 51 percent and average fares fell 37 percent.

Now Southwest is trying the same formula in Pittsburgh.

``That's the nail in the coffin. It's the end of US Airways,'' said Michael Boyd, president of The Boyd Group, an aviation consulting firm in Colorado. ``There is just no way an airline like Southwest is going to go into Pittsburgh unless it knows US Airways is through and it knows there's going to be a huge gap there.''

As recently as 2002, US Airways operated more than 82 percent of flights out of Pittsburgh, but that number has fallen to about 65 percent. The number of outbound seats from Pittsburgh on US Airways has fallen 28.4 percent from the first quarter of last year, according to Michael Allen, an analyst with Back Aviation Solutions in New Haven, Conn.

Allegheny County chief executive Dan Onorato called Southwest's announcement a significant step to assure the long-term success of the Pittsburgh airport. He said it would give local business and leisure travelers more choice.

Southwest, which flies to 59 U.S. cities, has remained profitable during the industry downturn of the past three years, and has continued to add planes. Kelly has said expansion in Chicago and Philadelphia were the carrier's top priorities but that Southwest still could add service to one or two new cities in 2005.

 

[LoveGun]

Maybe they chose PIT before CLT because AirTran is growing so quickly in CAK. SWA will no doubt put a damper on some of AirTran's CAK expansion plans. There was talk that AirTran was going to start CAK-LAS sometime in the near future. Maybe there is room for both airlines in the rust belt?

 

[dondk]

Alleghney county and airport mgmt has been back and forth with SWA for about 4 years now.. More so since U is floundering.

Ironically, these same peep's were shunned by SWA (and Air Tran) early last year, mostly because the airport wanted too much money to stay afloat. I guess they made SWA a deal they could not walk away from. There are plenty of gates in PIT for the taking.

Heck, it may even be a pay increase for the U people if they go to SWA...

 

[mmmdonut]

On the subject of ghost town airports, can you think of other airports that seem dead lately. Airports that had better days....?

STL and MEM come to mind....

 

[TexaSWA]

I wonder how this will affect the judges decision on USAir tomorrow

 

[canyonblue]

Analysts say move could finish off US Airways

Thursday, January 06, 2005

By Dan Fitzpatrick, Pittsburgh Post-Gazette

Southwest Airlines' decision to fly from Pittsburgh could deliver the long-predicted kill shot finishing off US Airways.

http://www.post-gazette.com/popup.a....com/images3/20050106sm_swest_modelPJ_450.jpgThe nation's seventh-largest airline already is reeling from a series of unfortunate events: its second bankruptcy, high oil prices, an escalating fare war and a Christmas holiday travel disaster that stranded thousands of customers and misplaced untold numbers of bags.

It is under heavy attack from in Philadelphia, its largest hub, where Southwest started service last spring. That move prompted US Airways to ask its unions for another $1 billion in contract concessions and led to a warning from former US Airways Chief Executive David Siegel that Southwest was "coming to kill us."

By grabbing a share of Pittsburgh, analysts said yesterday, low-fare Southwest is trying to finish what it started in Philadelphia. "There is a weak guy bleeding in the water, and the sharks are circling," said Ray Neidl, a New York airline analyst.

Southwest may like to portray itself as folksy and fun-loving, but deep down, it is "ruthless," said Standard and Poor's analyst Betsy Snyder. "They kind of smell blood" and "go in for the kill," she said.

America West Airlines co-founder Michael Roach predicted the competition from a low-fare carrier will bring on the "total destruction" of US Airways' Pittsburgh operation, which now includes 229 flights a day. "You can anticipate Southwest will take Pittsburgh completely away from them," he said.

US Airways and Southwest have clashed before. But "every time they have met on the battlefield, Southwest has emerged totally victorious," Roach said. "Southwest has eliminated them."

First it was on the West Coast, where US Airways spent $385 million buying California carrier Pacific Southwest Airlines in the late 1980s and then abandoned PSA's routes in the 1990s.

While other carriers may have contributed to US Airways' West Coast exit, Southwest's low pricing made it difficult to compete there, according to former US Airways executive Randall Malin, who admitted in 1991 that the airline "miscalculated. ... In retrospect, perhaps we should have known that Southwest would come into the California market and trash the pricing structure. Southwest's cost advantage was overwhelming."

US Airways predicted throughout the 1990s that Southwest would expand its operations to the Northeast, where US Airways is strongest. Executives knew US Airways' industry-high operating costs had to come down if it were to have a chance at competing head-to-head with Southwest, which is able to charge low fares because its costs are so low.

And it moved to try and address those cost issues. US Airways streamlined its fleet, paring down the types of planes it flies. It spread out connecting flights at its hub airports to avoid delays in case of backups or weather troubles during peak periods. And it reached concessionary pacts with its unions that still promised compensation that was higher than the average at the four biggest airlines.

But after all that, US Airways' costs remained the industry's highest, at slightly above 10 cents per seat per mile flown, excluding fuel -- or 4 cents above the average at Southwest. The latter, despite being unionized, has kept its costs down by flying a single type of aircraft and relying primarily on point-to-point flying between cities instead of connecting flights, speeding turnaround times.

Despite US Airways' warnings about the looming Southwest threat, it was caught flat-footed when Southwest launched service in 1993 in Baltimore, which was considered a small, fourth hub for US Airways and where the carrier accounted for nearly 55 percent of traffic. In less than a decade, US Airways' share of traffic there had fallen to 6 percent, compared with Southwest's 47 percent.

US Airways was caught off guard again when Southwest picked Philadelphia, thinking Southwest would go to nearby Allentown instead. The dramatic move forced US Airways to rethink its business plan and go back to its unions for more concessions, arguing that it needed to become more like Southwest to compete with it.

Yesterday, when asked about Southwest's move into Pittsburgh, airline spokesman David Castelveter did not mention the airline by name but instead said that "low-fare growth in Pittsburgh, just like other cities in the U.S., was not unexpected and further underscores the importance of us establishing a cost structure comparable to that of our low-cost competitors."

But Roach believes it may be too late for US Airways to change and survive. The Pittsburgh announcement indicates to Roach that US Airways is "losing the battle for Philadelphia" and "suggests that [Southwest] does not view US Airways as a formidable opponent. I assume [US Airways] will be wiped out in Philadelphia."

Some analysts are doubtful that US Airways can last another few months, even with concessions from unions. Colorado aviation consultant Mike Boyd argued that Southwest wants to start its Pittsburgh service in May because it believes that US Airways will be out of business by then.

But Southwest Chief Executive Officer Gary Kelly yesterday played down the US Airways factor, saying that the carrier picked Pittsburgh not because of US Airways' weaknesses but because the market is overpriced and under-served. "It just so happens the carrier there is in bankruptcy," he said. But when asked if Southwest would consider Charlotte, N.C., another US Airways stronghold, as a site of future expansion, Kelly admitted that he would. "I don't think we want to rule out anything, " he said.

 

[Juvat]

This is ever so slightly off topic, but this thread reminds me of the joke about the guy who goes to the counter and asks the large-chested female ticket agent for "two pickets to tittsburg."

 

[I.P. Freley]

On the subject of ghost town airports, can you think of other airports that seem dead lately. Airports that had better days....?

STL and MEM come to mind....

Did STL ever have "better days"? I admit to having limited experience with the airport, and all of that in the last three years, but that airport has always struck me as ugly and poorly laid out.

PIT is one of the best airports in the country (from a pax perspective), IMHO. Especially now that it's not very busy anymore...