Join The Discussion

 

Super PAC Men: How political consultants took a Fort Worth oilman on a wild ride

The head of a Texas oil dynasty joined the parade of wealthy political donors, aiming to flip the Senate to Republicans. By the time consultants were done with him, the war chest was drained and fraud allegations were flying

read more >

Bridge collapse on I-35 north of Austin

SALADO, Texas (AP) — Emergency crews are responding to a reported bridge collapse along an interstate in Central Texas.

read more >

Latin-inspired restaurant set to open in downtown Fort Worth

Downtown Fort Worth’s dining scene is about to get spicier with the opening of a new restaurant featuring Latin-inspired coastal cuisine.

read more >

Amazon begins Prime Now program in Dallas area

If you just have to have it now, as in one hour, you can, at least in the Dallas area, as Amazon.com Inc. announced Thursday it will offer Prime Now.

read more >

Texas jobless rate falls as employers add workers

Texas unemployment fell to 4.3 percent during February for the sixth straight month of declines, the Texas Workforce Commission reported Friday.

read more >

 

Southwest sees low-fare challenge to American's D/FW Airport home

 

Mary Schlangenstein
(c) 2014, Bloomberg News


DALLAS — Southwest Airlines Co., the largest low-fare carrier, will increase competition at American Airlines Group Inc.'s biggest hub by expanding nonstop service from a rival Dallas airport as U.S. flight limits there end.

Nonstop trips to LaGuardia in New York and Reagan National in Washington as well as eight other cities will begin Nov. 2, Chief Executive Officer Gary Kelly said at a news conference at Love Field airport Monday. Five others, including Chicago, will offer nonstop trips starting Oct. 13.

The flights will spur a challenge with cheaper tickets from Southwest at the airport closest to downtown Dallas, 25 miles from American's Dallas-Fort Worth International Airport hub. A 1979 law banned nonstop flights on large jets out of Love beyond Texas and its four neighbors. The restrictions were later eased to permit trips to eight states.

"There will be a negative impact on American as a result of this," Jeff Straebler, managing director for aerospace in the bonds and corporate finance group at John Hancock Financial Services. "Given American's size, is it the end of the world? Certainly not. This is definitely a positive for Southwest."

Southwest, based in Dallas, fell 2.5 percent to $20.43 in New York, joining declines by all eight other members of the Bloomberg U.S. Airlines Index Monday.

Southwest recently agreed to buy additional flying rights at both LaGuardia and Reagan that were sold by American to win approval from U.S. antitrust regulators for its December merger with US Airways Group. Flights from those airports are limited by the government to control congestion.

"There is no way the fares won't come down," Kelly said Monday of competitors. "It's competitive in North Texas. We're going to have to earn our customers and earn their business."

The airline won't announce fares or flight frequencies until May, he said, and customers can't book the routes until then.

"Thanks to our recent merger, American Airlines now has an expanded, robust global network," including 800 daily flights from Dallas-Fort Worth airport, Matt Miller, a spokesman, said in an e-mail. He declined to comment on fares.

Southwest historically has offered introductory fares for as long as eight months on new routes that attract the most competition from larger rivals, said Rick Seaney, chief executive officer of FareCompare, a ticket research firm. Those fares are 20 percent to 45 percent of competitors' rates, he said. American will match the lower prices on flights at similar times and try to keep passengers by offering more loyalty miles or first-class upgrades, he said.

"It will be interesting to see once they quit bloodying each other's noses and decide on what the real price point is going to be," Seaney said.

While the addition of the nonstop flights will be "a very big change," Southwest probably won't be the primary "price disciplinarian," said Bob Mann, president of aviation consultant Robert W. Mann & Co. in Port Washington, N.Y. That role falls to Spirit Airlines Inc., a so-called ultra-low- cost carrier that sells a low base fare and charges separately for everything else, he said.

In 2004 Southwest began a two-year lobbying effort for the repeal of restrictions under the Wright Amendment, which it argued was anti-competitive, before securing a phase-out of the limits. The legislation, authored by former Texas Rep. Jim Wright, was intended to protect the then newly opened Dallas-Fort Worth airport from competition. The amendment expires Oct. 13.

Southwest carries more than 96 percent of passengers at Love Field, which is about 20 minutes from downtown Dallas and adjacent to the airline's headquarters. It has flown from Love Field since 1971.

American, combined with US Airways and its American Eagle regional airline, carries about 85 percent of passengers at Dallas-Fort Worth, according to the U.S. Bureau of Transportation Statistics.

 

< back

Email   email
hide
Catch
How 'bout them Cowboys?