Southwest Airlines announced Boston as their next expansion city this morning. Actual routes and service patterns were not defined as of yet but this is certainly good news for Boston area residents who currently trek to Providence or Manchester to take advantage of Southwest's service.
Southwest seems to have run out of the "niche" markets they have traditionally played in - markets that avoided big city airports laden with high costs and delays etc. For many years, Southwest eschewed markets such as New York LGA, Boston and Washington DCA in favor of smaller airports nearby such as Long Island's Islip, the aforementioned Providence and Manchester along with Baltimore.
In recent years, Southwest has returned with a vengeance to two markets it abandoned years ago - San Francisco International (SFO) and Denver. Southwest's operations in these two cities were competitive, offensive positions designed to keep Virgin America in check at SFO and make life hard for Frontier in DEN. So far, both seemed to have worked.
But of late, Southwest has pushed deep into territory that were not on Herb's radar during his tenure. First was Philadelphia where Southwest has built a large operation under USAirways' nose. Southwest will begin service to Northwest's (or Delta's) Minneapolis "fortress hub" later this year. And LGA will soon be a heart on Southwest's route map as well with the recent acquisition of bankrupt ATA's slots there.
And now Boston.
Currently, JetBlue is the largest carrier in Boston with nearly 17% market share as per the Bureau of Transportation Statistics. Boston is a interesting market in that, unlike many large cities today, traffic is split between many carriers - far different from American's Miami, Newark's Continental, Detroit's Northwest/Delta or even the duopoly at Chicago O'Hare of United and American. The remaining pie is split between American, Delta, USAir and United. Obviously, Delta will get a boost once Northwest is added in.
Airlines battle it out for market share in Boston, yet fares remain, on the whole slightly above average. Again, according to the Bureau of Transportation Statistics, average domestic fares in Boston for Q3 2008 were about $397 - placing Boston slightly above the domestic average fare of $362 but far below small cities such as Cincinnati (#1 at $596!) or even Washington Dulles ($451) or LAX ($418.)
So, to the obvious question of "where?" Where will Southwest fly from Boston? As we posted earlier, Virgin America will also arrive at Logan later this year with nonstops to both SFO and LAX. But don't expect to see Southwest launching trans-con flights from Boston anytime soon.
The top three destinations from Logan are Chicago O'Hare, Atlanta and New York LGA. Even with new slots at LGA, there is no chance that Southwest will burn them fighting the US and DL Shuttles.
If we were gamblers, we would expect to see Southwest launch service to Chicago Midway and Baltimore right off the bat. If they feel like tweaking JetBlue, an obvious additions could be Tampa, Fort Lauderdale and/or Orlando. Philadelphia could also be a strong market. St. Louis, Kansas City or Houston Hobby would also build on Southwest's strength's in those cities - all of which have high fares to Boston and aren't JetBlue markets (yet, anyway!)