Southwest Airlines officially kicked off its service from Charlotte Douglas International Airport on Monday, raising the hope of lower fares on which the airline has built its reputation.
“We are ready for the famous Southwest effect,” said Charlotte Mayor Pro Tem Patrick Cannon. “I love those very affordable rates.”
But it’s still unclear how Southwest will affect Charlotte fares in the long term. Charlotte Douglas will still be one of the most single-carrier dominated airports in the nation. US Airways currently operates about 90 percent of the airport’s 700 or so daily flights. That proportion will rise even further when the airline completes a merger with American later this year, to about 93 percent of daily flights.
Southwest will have six flights a day from Charlotte, to Houston’s Hobby Airport, Baltimore, Orlando and Chicago’s Midway Airport. Travelers can connect to 78 more destinations from there, Southwest executives said.
“We welcome the competition,” US Airways Vice President Mike Minerva told a regional transportation summit last week.
The arrival of Southwest at Charlotte Douglas was greeted with a water cannon salute from firefighters and penguins from SeaWorld brought by the Make-A-Wish Foundation to surprise for a sick child from Mint Hill.
But despite the fanfare, the airline is replacing AirTran’s service. Southwest bought AirTran, a smaller, low-cost carrier, in 2011. AirTran started flying from Charlotte Douglas in 2005.
“For most people, it’s just a change of brands on the airplane, because AirTran has been here for years,” Charlotte Douglas aviation director Jerry Orr said last week.
At other airports that have switched from AirTran to Southwest, the effect on fares has been small, according to reports. The Atlanta Journal-Constitution reported in February that the effect on fares there had been limited, in part because Southwest operated about 2 percent of daily flights.
But analysts said customer service had improved at Delta Air Lines, Atlanta’s major carrier, in response to Southwest.
Southwest Senior Vice President of Business Development Dave Ridley said Southwest could expand the number of flights from Charlotte Douglas in years to come.
“We’re interested in seeing the reaction” of Charlotte travelers, he said.
Gone from Southwest’s schedule right now is AirTran’s daily flight to Atlanta. Hartsfield-Jackson was AirTran’s main hub, and Southwest is still shuffling its schedule there as it integrates AirTran into the company. Ridley said he couldn’t say whether Southwest will add an Atlanta flight back to its Charlotte schedule.
Some analysts cautioned Charlotte travelers not to expect fares to plummet overnight.
“The Southwest effect is dead,” said Henry Harteveldt, a travel industry analyst with Hudson Crossing. He said the increased competition from a national airline such as Southwest will help consumers by keeping other airlines “honest” in their pricing, however.
“Will they create more competition in the marketplace that will benefit consumers? Absolutely,” he said. “Will they be a headache for American and US Airways? You bet they will.”
George Hobica, the founder of AirFareWatchdog.com, does foresee an impact on fares on routes where Southwest competes aggressively.
“I do think there will be somewhat of an effect, at least at first,” he said.
As an example, he pointed to a late June flight from Charlotte to Los Angeles.
Southwest is selling tickets for $363, he said, while the next-lowest fare, from United, is $412. Factor in Southwest not charging fees for checked bags, and the disparity is greater.
Hobica said that the effect could grow if a carrier such as Spirit Airlines, with rock-bottom fares and charges even for carry-on bags, entered the market.
Out of the nation’s top 100 airports, Charlotte Douglas ranks as 29th most expensive from which to fly, according to the most recent federal data available. A roundtrip domestic ticket from Charlotte averaged $401 in the third quarter of 2012.
The most expensive city was Huntsville, Ala., with a $522 average fare and the least expensive was Atlantic City, N.J., with an average roundtrip fare of $133.
Charlotte Douglas is the nation’s eighth-busiest airport by number of passengers, but most are connecting to other destinations.
Fewer than a quarter of the airport’s travelers start or end their trips in Charlotte. That means local passengers have nonstop access to more destinations than they would if the airport weren’t a hub, but fares are higher than they would be otherwise.
A study released last month by travel research firm Topaz International found that Southwest isn’t always the lowest cost airline. In a comparison of fares between 100 different city pairs, Southwest was the cheapest of nine major airlines 40 percent of the time.
But Southwest doesn’t charge a fee for checking a bag, and the Topaz researchers found that if a bag fee is included, Southwest was the cheapest airline a full 60 percent of the time. US Airways charges $25 for the first checked bag on North American flights.
Ridley acknowledged that Southwest’s fares are no longer quite the rock-bottom industry standard they used to be.
The company has grown, its unionized pilots and other workers are well paid, and the price of jet fuel has gyrated sharply in the past few years, straining airlines.
“We haven’t figured out how to run our planes on anything besides jet fuel,” said Ridley.
Portillo: 704-358-5041; Twitter @ESPortillo
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