Saturday, August 28, 2010

Southwest Expanding Into Newark

The big airline news of the day isn't the U.S. regulatory approval of the merger between Continental and United, which was fully expected. Instead, it's a provision in the deal that requires Continental to part with 36 slots at the hilariously named Newark Liberty International Airport -- and lease them to Southwest Airlines.

Whoa! All of a sudden a huge part of the New York market will open to competition from Southwest, which had resisted moving into that delay-prone, open-slot-scarce market until last year, when it began a small amount of service from and to La Guardia.

Southwest says it plans to begin Newark service in March and have "a full schedule in place by June 2011." The 36 takeoff and landing slots are spread throughout the day and will "allow Southwest the ability to integrate Newark service conveniently into its extensive national route network," the airline says.

For air travel, and especially business travel, the New York market is the big enchilada. Also, "this service also will provide a needed injection of low fares and competition into the New York/Newark market," Southwest said.

Certainly there will be domestic fare wars with Continental and United as Southwest establishes itself in Newark. On the other hand, I don't drink the Southwest Kool Aid. I live in Arizona, and when I travel west of the Mississippi, I don't always find Southwest fares to be dependably competitive. For instance, I recently went to Seattle on a business trip, and the US Airways fare was about one-third cheaper than the Southwest fare. On the other hand, there are times when Southwest beats the competition hands-down.

As to Newark, where Continental has a hub and is the dominant carrier: As is well-known by anyone who lives in the sprawling northern New Jersey portion of the New York market, and who wants the option of Southwest, getting to La Guardia is a real chore, as opposed to getting to nearby Newark. A drive to La Guardia from most areas in New Jersey that are in proximity to New York City can take an hour -- or three, depending on utterly unpredictable traffic. Yes, public transportation is available: By train or bus into Manhattan, and then on to La Guardia up in Queens. A hire-car service ride is in the $120 range one way.

So this is major air-travel news for the New York market and for a national network of connecting markets that Southwest will link to from Newark. Southwest is the largest domestic carrier in terms of passengers carried, by the way. (Delta is the world's largest carrier, but that includes its international market.]

The Newark move explains why Southwest recently said it was considering buying a bunch of Boeing 737-800 airplanes, which seat a lot more passengers than the current Boeing 737 models in the airline's fleet. To fly profitably to and from the congested New York market requires more per-plane capacity that Southwest currently has.

Southwest would configure new 737-800s with 175 seats (all in one class, as usual) -- as opposed to 137 or 122 seats in its existing fleet of 541 Boeing 737-700s, 737-300s and 737-500s. [See my post of Aug. 16 for more on this]. Southwest's pilots and flight attendants would, of course, need to sign off on arrangements to fly the bigger 737s.

Of the total 541 Boeing 737s now flown by Southwest, 343 of them are 737-700s (with 137 seats each), 25 are -500s (122 seats) and 173 are -300s (137 seats). The 737-800s are basically a stretched version of the -700s.


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