Southwest adds 18 DIA flights

By Chris Walsh, Rocky Mountain News (Contact)

Originally published 12:05 a.m., January 9, 2008
Updated 01:43 p.m., January 9, 2008

Southwest Airlines will add 18 new departures from Denver and six additional cities, marking its largest expansion here since arriving two years ago.

The new destinations: Philadelphia; Raleigh, N.C.; Los Angeles; St. Louis; San Jose, Calif.; and San Antonio. As part of the expansion, the company will add one additional flight between Denver and Austin, Texas, Albuquerque and Chicago.

The new daily nonstop service is scheduled to begin May 10.

"We did promise you lower fares and we did promise you more flights," Southwest chief Gary Kelly told a crowd of 300 employees this morning at a news conference downtown.

The move marks Southwest's biggest single growth spurt in Denver, measured by number of flights and cities added, and it represents a 32 percent increase in the carrier's service in Denver. The additions will help link Denver to key cities in Southwest's route network, including one of its big hubs in Los Angeles.

"They're really looking to connect the dots" across their system, Robert Mann, an airline industry consultant, said Tuesday. "I think they want to see themselves as a certain size there relevant to the overall Denver market, and their recent entry says they aren't at that size yet. I'm not sure when they'll get there, but there may well be more growth after this."

One-way fares to some of the new destinations start under $100.

The move tops Southwest's 14-flight Denver expansion in November, which until now ranked as its largest since arriving here.

When it starts the latest round of new service in May, Southwest will have 79 daily departures in Denver to 23 cities — a nearly sixfold increase from when it launched here in January 2006.

The increase in service is good news for consumers, as Southwest will help lower fares on those routes. In the past, the carrier has helped push down prices by up to $100 between Denver and some cities.

But its expansion will put more pressure on Denver's two entrenched carriers — United Airlines and homegrown Frontier Airlines — which likely will have to lower prices on those routes to stay competitive.

Frontier's stock dipped as much as 20 percent today on the news of Southwest's expansion and was down about 16 percent early this afternoon. Southwest shares are down less than 2 percent, while United are up several percent.

Southwest will compete against United and Frontier on five of the new routes, while it will face only United on nonstop service between Denver and Raleigh.

"This can't be helpful to Frontier, and it can't be helpful to United," Mann said.

It's unclear how Southwest will accommodate the flights at DIA, as it's running out of gate space on the C concourse.

New cities

Southwest Airlines is adding six destinations from Denver (with number of daily flights):

* Los Angeles (LAX): 5

* San Jose, Calif.: 3

* St. Louis: 3

* Philadelphia: 2

* Raleigh, N.C.: 1

* San Antonio: 1

• January 9, 2008

  3:02 a.m.

  Suggest removal

  SteveM writes:

  Why must everyone predict doom and gloom as a result of expansion? Denver is the only city I know that anything something good happens, the local media has to put a negative spin on it.

  Recall, of course, that SWA left Denver due to, "new airport too expensive", waited until other airlines and success of airport drove down costs and showed numerous on-time and fuel-saving advantages, and then swooped back in two years ago. Point is that Denver does not need SWA as much as SWA needs Denver. Look at their route map and see how pivotal our location is for them? We already had ample competition for United from Frontier. SWA has to have realized that their route map had a huge gap when they made the 'smart' decision to let others pay for the new airport while they sat and waited. So, now they are opening up the throttle to their network. DIA is the 5th busiest airport in the USA. It is also the biggest airport closest to the center of the nation--not jsut because it's also the biggest airport in the nation. Chicago has thrived for decades off the fact that it commanded hub status for central nation transfers meaning large, midwestern cities funneling in to funnel out. Denver is actually a more prudent funneling point. When fuel is skyrocketing, airlines are going to be be looking for ways to save money, and one way is to funnel more toward the middle of the system--hence more growth from SWA. Another way, however, is to funnel through an airport where jets rarely have to wait on the tarmac burning fuel--ever sat in a line of planes at O'Hare that's 20 planes long? Well, that doesn't happen at DIA because landing planes don't cross paths with departing planes due to unique configuration of runways. This, believe it or not, saves not only time, but millions of gallons of jet fuel annually.

  Maybe the Rocky could spend some time working on positive aspects of our amazing airport and its economic contribution in the wake of decades of malcontents that would still have us flying out of Stapleton if they had had their way.

• January 9, 2008

  7:17 a.m.

  Suggest removal

  jetstu writes:

  Southwest is like a shark. They lurk in the waters and go for the kill. They are out to eat our hometown airline Frontier and United. We the people of Colorado need to support out hometown so thousands of employees dont loose their job. Id rather be on a nice airbus then a small B737 with no thrills. Southwest go home.

• January 9, 2008

  7:54 a.m.

  Suggest removal

  jffwhte writes:

  Keep on coming Southwest. I love your fares and your flights. Nobody does it better.

• January 9, 2008

  9:31 a.m.

  Suggest removal

  Pablo1 writes:

  One thing for the "cheap Fares" crowd to remember is that once the "Wal-mart of the air" ruins the competieion their fares will go up exponentially. I can not believe the lack, no complete abscence, of local support that I see in regards to Frontier and United. What are we going to do with 6000 or so unemployed Frontier people who own homes in our neighborhoods and can't make the mortgage payment. "Thanks a lot LUV"
  Pablo1

• January 9, 2008

  10:46 a.m.

  Suggest removal

  Pentaconta writes:

  How is Southwest like a shark? Can anyone cite examples where they ran off other carriers at airports in other markets? Since Continental reneged on their commitment to serve DIA after it was built, DIA has had quite a bit of empty space. Would Frontier and United be worse off now if Continental had stuck around? Choice and competition are good for the consumer. Don't forget that Southwest pays salaries that pay for mortgages in Denver area neighborhoods, too. The additional activity at DIA also provides even more secondary jobs for the Denver economy.

  For what it's worth, Southwest's Boeing 737-500s are roughly the same size as Frontier's Airbus A318s. Their 737-300s and 737-700s are roughly the same size as the Airbus A319s. Frontier will be introducing some A320s this year, which will give them a leg up on Southwest over longer routes.

  Anyway, with all that said, I really like Frontier, and I no longer even live in Denver. The LiveTV feature on their Airbus aircraft is really cool, and I have found the employees to be generally pleasant. If it is convenient and cost-effective for me to fly with Frontier, I will probably choose them every time. I just wish they would find a way to implement LiveTV on the Dash 8 turboprops that their Lynx Aviation subsidiary uses to serve smaller markets.

  Frontier will find new and innovative ways to compete with Southwest. They already serve lucrative vacation destinations in Mexico and Costa Rica, which gives them an advantage. The new Dash 8 turboprops will enable them to serve smaller markets more cost-effectively, as they are more fuel-efficient. Don't forget that there are even domestic markets like Wichita that are served by Frontier and not Southwest. And believe me, you can only imagine how happy Wichita residents are to finally have service from a low-cost carrier.

  My only real complaint is the pure hub-and-spoke routing system that Frontier uses. It is not particularly convenient for me to change planes in Denver if I am flying from Portland to the Bay Area, for example.

• January 9, 2008

  11:33 a.m.

  Suggest removal

  Tree_Hugger writes:

  The situation here is very simple to understand. More competition from Southwest means that United and Frontier will not be able to raise fares without losing passengers.

  Since fuel and labor are the main expenses that airlines have to deal with -- more lost jobs are inevitable.

  The airlines can't cut the costs of fuel, so they are going to have to cut the costs of labor. The only way to do that is through layoffs.

  Frontier already laid off about 100 people last month.

  I seriously doubt that Southwest will be hiring very many local people to support those 15 new flights.

• January 9, 2008

  11:48 a.m.

  Suggest removal

  joggle writes:

  In Southwest's defense, they are not Walmart just because they have cheap prices. Unlike Walmart, they give their employees good benefits and are heavily unionized. They also don't use the shady business practices that Walmart has used to establish their business. Instead they used sound business practices by targeting a different market than other airlines at the time the company began service (budget flyers who were interested in no-frills, cheap flights) as opposed to business men or vacationers of greater means than others who would usually drive.

  I'm not in that demographic however and will choose Frontier over Southwest any day if given a choice, so long as the price discrepency isn't over $100 or so. I like supporting a local business and enjoy having reserved seating and direct flights to just about anywhere I want to go since I live near Denver. However, flying on Horizon Air (Frontier uses them for some routes) isn't much of an improvement over Southwest in my experience, so in that case I would pick whoever is cheaper.

• January 9, 2008

  12:20 p.m.

  Suggest removal

  Pentaconta writes:

  All of the carriers are going to be affected by the same cost pressures, including Southwest. To make matters worse, 2008 looks to be a down year for the US economy, which means fewer people will be flying. Southwest's presence may exacerbate Frontier's troubles, but it's not necessarily a given that Frontier will be viable without Southwest.

  Layoffs work for a while, but you eventually reach the point where it becomes like burning the furniture to heat the house. For Frontier to ultimately survive, they will have to adjust their business model to the current reality. The use of more fuel-efficient aircraft, particularly on smaller routes, will help offset the higher fuel costs to an extent. They will probably also have to cancel less lucrative routes on which they are losing money. If and when Frontier becomes profitable again, they might consider diversifying a bit with a secondary hub, rather than keeping all their eggs in one basket in Denver. (Some moderate-sized city back east like Indianapolis or Columbus immediately comes to mind.) Unlike the other carriers, Frontier currently gets totally screwed every time DIA is shut down due to bad weather.

  Good luck to Frontier. I really like them and hope they can find a way to make it.

• January 9, 2008

  12:33 p.m.

  Suggest removal

  AC writes:

  SteveM: Actually, Southwest pulled out of Stapleton in 1985 -- well ahead of the new airport. The new airport costs had nothing to do with Southwest leaving. It was only at Stapleton a few years and pulled out because most of its system delays were traced back to delays incurred by its operations out of crowded Stapleton. There already were three airline hub operations here and Southwest couldn't compete.

• January 9, 2008

  2:20 p.m.

  Suggest removal

  pdt2139 writes:

  1) Our economy as a whole depends and thrives on competition. If Southwest can offer lower airfares and stay in business then others will have to adapt to survive. They might have to change their business model to offer something different or better to justify their higher fairs.

  2) If you are worried about local jobs just a FYI. Airbus is a French company and Boeing is an American company. Is it more important to have jobs here in the United States or in France?

  3) Frontier is going to have to decide if they want to be a low cost airline carrier such as Southwest or be in the arena with United. I do not see how they can be competitive with both.

  4) If you pay $100 less for airfare you are more than likely to spend that money in the Front Range area. The trickle down effect of that $100 spent here will eventually lead to more jobs to replace the jobs lost by layoffs. Given they may not be the same type of jobs but they are still jobs created.

• January 10, 2008

  6:07 a.m.

  Suggest removal

  queenjacyln writes:

  All things considered equal I will take a Frontier flight over any other. But lately they have been trying to operate more like a United. They restructured their frequent flyer program and now have blackout dates and I've seen the prices of flights creep up. I am thrilled at the news Southwest is expanding even more. They help drive the price of flights down significantly. And all this growth is helping Denver's economy. More flights here means more revenue. it amazes me that people are still loyal to United. If you've flown any time in the last 5 years you'd know what a joke that airline is. With the way that all the airlines have stripped back all amenities, they all are like a Wal-Mart. Who cares if I don't get a seat assignment when I'm saving several hundred dollars for my husband and I to fly? its not like if I shell out to go on United they will rub my feet and serve me champagne!

• January 10, 2008

  11:06 a.m.

  Suggest removal

  rob writes:

  hmmm....wouldn't it be funny if Southwest bought Frontier like they did Morris Air in the 90's?

• January 11, 2008

  9 a.m.

  Suggest removal

  duplayer4 writes:

  As a current airline employee at DIA, I wish the average passenger knew the tremendous pressure that airlines are under to stay profitable these days. As I've always heard, "Airlines are a great place to work, but a horrible investment." These days, especially with the high price of fuel, airlines are barely making money even when their planes are full.

  Southwest has a very good business model, especially when it comes to keeping their planes full. You may not like stopping in Houston and Tampa on your way to Fort Lauderdale, but Southwest picks up passengers at each of those stops, keeping the seats filled all the way to Florida. And you, as a passenger, save lots of money. Southwest makes money. You save money. It's a good deal for both.

  It makes sense that Southwest would build up their Denver service because of Denver's central location in the country. Denver is becoming a big connecting point for many Southwest flights, and if I were United or Frontier, I'd be scared. Sure, some passengers (especialy frequent flyers) will stay loyal to United and Frontier, and some passengers will pay extra for a non-stop flight. But as much as the "average" passenger complains about the airlines, price still rules the roost. United and Frontier are as much "buses in the sky" as Southwest is. (You still have to pay for DirectTV on Frontier.) Southwest may be the smartest of all the major US airlines, and I expect them to outlast United and Frontier in the years to come.