ANALYSIS: Southwest makes case for new San Diego flights

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Dallas-based Southwest Airlines' move to add new markets out of San Diego was in response to requests from business travellers, as the airline continues to adjust its network in a lengthy integration process with subsidiary AirTran Airways.

The carrier announced on 16 December that it would add four destinations from San Diego in 2014 - New Orleans in April, followed by Orlando, Portland (Oregon) and Seattle in June. Aside from the New Orleans route, Southwest's entrance into the other three markets places it in direct competition with Alaska Airlines, which dominates heavily on those markets. Alaska has a monopoly on the Orlando and Seattle routes.

Southwest's vice president of network planning and performance Andrew Watterson says the carrier decided to launch the new markets from San Diego after repeated requests from passengers.

Search requests on the airline's website and customer feedback indicated that there was strong business travel demand on these routes, he tells Flightglobal.

Southwest is the top carrier at San Diego with an approximately 40% market share, says Watterson. The new flights in 2014 will grow this share by a few modest percentage points. While Alaska has expanded at San Diego in recent years, Watterson says the airline's move to compete with Alaska on the new routes was not in reaction to that.

"We keep an eye on the other airlines, but we have a substantial presence there. We don't feel threatened," he says.

The new destinations out of San Diego will grow the airline's flights out of the airport to 100 daily to 23 destinations. While this is still lower than the 2005 peak of 109 daily flights, Watterson does not rule out growing the number further. "We believe in gradual consistent growth," he says.

Southwest's current network at San Diego

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Source: Innovata

The new San Diego flights come as the airline continues to adjust its network while integrating subsidiary AirTran into its operations. Following an earlier decision to de-hub AirTran's base at Atlanta, Southwest will further slash the number of non-stop destinations it serves from the city.

In June, the carrier will discontinue operations on its non-stop flights from Atlanta to Dayton (Ohio), Norfolk (Virginia) and Louisville (Kentucky). Watterson says the airline is largely satisfied with how its de-hubbing strategy has played out in Atlanta.

The point-to-point schedule at Atlanta, instead of AirTran's hub and spoke operations, has benefited the area's local customers, he says. "It looks like it [the de-hubbing] was a wise move," says Watterson.

Southwest will also add new flight frequencies out of New York LaGuardia airport from 11 May, with six new slot pairs it bought from American Airlines.

The additional flights will serve Nashville, Akron-Canton, Houston Hobby and Chicago Midway. Watterson says the airline chose to use the slots on existing routes as it was required to start utilising them in a short timeframe. "Those markets were doing well for us, and we were best served to use these slots on existing routes."

There is a possibility though that the carrier could use them to open up new markets from LaGuardia in the future, he adds. "We could always go back and re-evaluate."

Southwest closed on its acquisition of AirTran in May 2011 and expects to integrate both airlines' networks completely by end-2014. Southwest says that as of now, about 66% of the destinations in the two carriers' combined networks have become Southwest-only operations.