Southwest’s New Cities Fit Neatly Into a Hub Strategy – Cranky Flier

For an airline that hasn’t rolled out many new cities in some time, Southwest sure is active these days. While I was traveling last week, Southwest announced Savannah, Jackson (MS), and Colorado Springs. Then just yesterday, it published schedules for Colorado Springs and Chicago/O’Hare. With every announcement, Southwest begins to look more and more like a hub-and-spoke carrier. Oh sure, it’s not in a traditional way, but it sure is the basis for how Southwest is bringing new dots on to its route map.

While many of Southwest’s new cities — including Savannah — fall into a standard pattern (heavy leisure, primary airports, etc), three of these are worth a closer look. So, let’s dive into Jackson, Chicago/O’Hare, and Colorado Springs.

Jackson, Mississippi

We don’t know the schedule for Jackson just yet, but it does hold the dubious distinction of being one of the only cities Southwest has ever left. For that reason, we can see how Southwest used to serve the market.

In the last few years while it was there, Southwest flew once or twice a day to Baltimore, twice or thrice daily to Houston, once daily to Orlando, and once or twice daily to Chicago. That thin schedule was a pure leisure play for Orlando with limited connecting opportunities through the other cities. It never quite worked out commercially. Of course, that probably wasn’t the plan anyway.

You see, Trent Lott (MS-R) was a long-time US Senator and former majority leader who stepped back after a scandal. Lott was an influential member who at one time chaired the aviation subcommittee in the Senate. The general belief is that Southwest went into Jackson to curry favor with the Senator. He resigned from the Senate in 2007, and Southwest — not one to want to leave a city nor show any tinge of impropriety — hung on until 2014 before it left due to the weak demand that was always there.

Does that mean that Southwest is now returning because the commercial situation has changed? Well, the cynical me says it’s again about politics. Sen. Roger Wicker (MS-R) succeeded Trent Lott in 2007, and in the current Congress, he ascended to the throne as chair of the Senate Committee on Commerce, Science, and Transportation. Wicker has been pushing for more airline aid, sponsoring the last bill to extend CARES for the airlines. So, well… that.

Just because it’s politically expedient, however, doesn’t mean it can’t make sense commercially too. I turned to my old friend Cirium….

Jackson (MS) Domestic Traffic and Fare by Year

Traffic has declined while fare has gone up. So, well, I don’t think there’s much here for Southwest to get excited about. That being said, Southwest is a different airline now, so there could be a slight commercial opportunity.

With more connections, Southwest is highly unlikely to resume the Orlando flight. I’d look for Dallas (which couldn’t offer connections before thanks to the Wright Amendment) and/or Houston, Nashville, Atlanta, and possibly further afield to another hub. With more flights feeding those hubs from other places, there is more of an opportunity for Southwest to carry a higher percent of Jackson’s traffic than before. It’s just going to have a lot more connections onboard, and that’s ok.

Maybe it really is a political move, but the increasing hub utility means cities like this can potentially work in this environment, even if there is no real growth in the market.

Chicago/O’Hare

It was only a couple weeks ago that Southwest announced it would go into O’Hare, and now we have the full schedule. Service begins on Valentine’s Day as follows, and again, it’s a hub-and-spoke play.

With twenty flights a day, this is a pretty heavy schedule, and it shows that Southwest isn’t stupid. If you’re going to go into a market with competition, you need to go in pretty big on frequency. Southwest is certainly doing that here. And Southwest is strong enough that it doesn’t have to worry about retaliation from the others.

Based on the current schedule, Southwest does not have a schedule advantage versus United or American in any of these markets except against American to Denver. But a schedule advantage probably isn’t necessary, as long as there are enough flights. This is a robust schedule. Since we’re thinking about this from a hub perspective, it’s not only the number of flights in each city that matters but also the number of connecting options to get elsewhere.

  • If you’re heading west, you have 8 flights to connect you beyond Denver and Phoenix. Want to go to Reno? Southwest sells 6 connecting options.
  • If you’re heading to the Southwest, you have 6 flights beyond Phoenix and Dallas. Southwest offers 10 options from Chicago to Albuquerque that way.
  • Between Texas and the Southeast, you have 8 flights between Dallas and Nashville plus some utility on those 4 Baltimore flights. That means 8 options a day to Jacksonville alone.
  • The weakest coverage is in the Northeast where the 4 flights through Baltimore are probably your best option. That still leaves 3 options a day to Buffalo and 2 to Manchester.

I was quick to notice that not one of these flights goes to Florida which shows just how different this is compared to the past. This is not a nonstop leisure play as I would have expected it needed to be before. This is again a connectivity play (both business and leisure) that Southwest hopes will draw enough people to regularly fill 20 airplanes a day.

Colorado Springs

If you still doubt that Southwest has hubs, this schedule should put it to rest completely. Beginning March 11, Southwest will have 13 departures a day in Colorado Springs, and four of them go just a few miles up the road to Denver. In case you’re wondering, there are about 3 people a day according to Cirium data that fly that route without a beyond connection, but even that number seems highly suspect. This is as pure of a connecting market as you’ll find anywhere, and Southwest is flying it.

Here’s the full schedule:

This market is more about regional connectivity to get to the rest of the network. For those heading anywhere, they’ll be able to connect on those 4 flights a day through Denver.

  • If you go west, you have 4 more between Vegas and Phoenix. That gives you 10 options to Orange County and even 6 to Long Beach.
  • If you go southeast, you have 3 more with Dallas. Take one of 10 daily options to Orlando if you like the Mouse.
  • If you go east, you have 2 more via Chicago. That means there are 6 connecting options if you want to head to Pittsburgh, believe it or not.

There is no need for greater frequency here. Competition is very limited, and Southwest adds huge utility by just connecting into its hubs.

It sounds weird to say it, but it’s long overdue. Southwest has one of the best domestic hub networks possible, and each new city makes the hubs more and more powerful.

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