Southwest Airlines' purchase of AirTran Airways in 2011 gave it access to the biggest market in the southeast - and one of the biggest gaps in its extensive route network across the USA - Atlanta.
After initial tweaks to the AirTran network that involved cutting service to 16 cities, the Dallas-based low-cost carrier launched its first service to the southern metropolis in February and has announced the transition of seven AirTran cities - Branson, Charlotte, Des Moines, Flint, Portland (Maine), Rochester and Wichita - to Southwest. Nonstops to Atlanta's Hartsfield airport, however, will be dropped from Branson, Charlotte, Flint, Rochester and Wichita with the switchover.
This begs the question, what are Southwest's real plans for Atlanta?
Combined AirTran and Southwest routes from Atlanta, November 2012
Innovata Flightmaps Analytics
"As we integrate the two brands together we look at what makes the most sense," says the airline. "As we transition [markets] we have to take into account the traffic numbers to Atlanta as well as the rest of the Southwest system."
Atlanta is a market in flux for Southwest. It remains a large hub for AirTran but passengers will not be able to transfer between the two carriers until the first quarter of 2013 at the earliest. This makes it difficult to justify continuing to fly routes with high percentages of connecting passengers to the airport on Southwest metal. In addition, the carrier continues to restructure AirTran's hub-and-spoke operations at Hartsfield to its point-to-point model.
"[AirTran's] feed into and out of Atlanta is not as productive as it was before we started tinkering," said Gary Kelly, chairman and chief executive of Southwest, during an earnings call in October. "On the other hand, their mix of nonstop traffic is up significantly. So within AirTran, we're kind of going through quite a bit of churn. And I think we'll all have a much better AirTran network next year as we continue to tune it."
The five markets dropped from Hartsfield, with the possible exception of Charlotte, are likely difficult to justify without the connecting opportunities over Atlanta. This is supported by the fact that Charlotte, Rochester, Flint, as well as Portland, have retained or gained flights to Baltimore - Southwest's third largest city by number of departures.
Delta also competes with AirTran between Atlanta and Charlotte, Flint, Rochester, Springfield/Branson (80km northwest of Branson airport) and Wichita, according to Innovata schedules. In addition, US Airways has flights between Atlanta and Charlotte.
Being a smaller city with a high percentage of connecting traffic over Atlanta does not preclude that Southwest service to the Georgia city is out. The carrier kept AirTran flights between both Akron-Canton and Dayton and Hartsfield after it began operations to the airports in August.
Akron and Wichita present a good comparison. Both are metropolitan areas with around 700,000 residents - the former a bit more and the latter a bit less - located in the US midwest and formerly served by only AirTran. The main difference is that Akron serves as an alternative airport to the Cleveland area, which is about 50 miles (80km) to the north.
Southwest launched service between Akron and both Chicago Midway and Denver, while keeping AirTran's service to Atlanta as well as its flights to Baltimore, Boston, Fort Myers, New York LaGuardia, Orlando and Tampa. The airline said in April that it would decide when to convert the AirTran flights to Southwest at a later date.
Temporarily flying both carriers to Akron allows Southwest to build on AirTran's existing passenger base at the airport while maintaining the established traffic flows that have built up during the more than a decade that AirTran has served the facility.
Wichita is another story. Southwest will replace AirTran's three-daily flights to Hartsfield with five flights to Chicago Midway, Dallas Love Field and Las Vegas from 2 June 2013. While the new routes make sense when integrating into Southwest's existing network, Bob McAdoo, an airline analyst at Imperial Capital, points out that the changes will make travel to the southeast and Florida - routings that make sense over Atlanta - on the combined networks much less convenient.
"They are adding new routes but dropping what's established," he says. "I'm not real sure what's going on with Wichita."
Robert Mann, an airline industry analyst at RW Mann & Company, adds that some of the markets cut from Atlanta may not be suitable to the larger 737 once the combined Southwest and AirTran fleet returns to a single-type in 2015.
Complicating things, Southwest has also added flights to new markets from Atlanta. It launched flights to Austin, Louisville and Norfolk - the latter replaced cancelled AirTran service to nearby Newport News-Williamsburg - when it began service to Hartsfield in February and recently announced the resumption of seasonal Seattle flights in June 2013.
The airline says that some Atlanta destinations will come back as the integration continues and there is more "synergy between the networks". It points to Seattle as an example.
Major cities appear to be above the fray. AirTran continues to fly multiple times daily between Hartsfield and destinations including Chicago Midway, Fort Lauderdale, New York LaGuardia, Orlando and Washington National. All are key cities to maintain if Southwest wants to boost its share of originating and departing traffic from Atlanta.
Integrated schedules will be a critical juncture for Southwest in Atlanta. With domestic connections feasible between the carriers - international will have to wait until a new reservation system from Amadeus is implemented in 2014 - all of the spokes that have been dropped could easily come back and new routes to Southwest cities added.
The carrier demonstrates its willingness to continually tweak its route network with its schedule updates every six weeks. Earlier this month, it announced that it will end flights between Oakland and Reno - a route that it has served since November 1990 - as well as between Albuquerque and Tucson, Little Rock and St. Louis, and Birmingham (Alabama) and both Ft. Myers and Jacksonville on 1 June 2013.
Southwest's increasing focus on its bottom line is likely playing a big role in the schedule changes at Atlanta. Management has deferred the deliveries of at least 31 737s through 2014 and stated that combined AirTran and Southwest capacity will be flat through next year, as it attempts to achieve a 15% return on invested capital in 2013.
The carrier will undoubtedly continue to juggle it and AirTran's combined schedule and routes from Hartsfield until the integration is complete - in 2015. Some destinations will change while others will stay but, while some may be dismayed by the recent cuts, the southern metropolis will remain a key focus in the Southwest system.
"It's not that there's a lesser focus on Atlanta, it's just that we tweak the schedule so that customers are getting what they want and the aircraft time is being utilised appropriately," says Southwest.
AirTran and Southwest combined network, November 2012
Source: Air Transport Intelligence news