AP
AirTran employees have their pictures taken with a Southwest sign at the Atlanta airport in 2012. Now Southwest has finished absorbing AirTran and faces the full challenge of competing with hometown giant Delta.
The battle of airlines at Hartsfield-Jackson International Airport is heating up.
Now that Southwest Airlines has finished swallowing up the operations of merger partner AirTran Airways, it is launching a full-force effort to try to take some business from dominant Delta Air Lines.
“We’ve got big competition here in Atlanta,” Southwest CEO Gary Kelly said. “We need to win more customers.”
But Dallas-based Southwest faces a steep climb, because after a series of flight cuts its route network from Atlanta is smaller than AirTran’s and a fraction of the size of Delta’s.
And Southwest doesn’t plan to add many more flights to trigger the type of increased competition that can generate a fare war and drive down ticket prices over the long term.
For now, the carrier’s offensive consists of a broad advertising campaign, as well as targeting travelers to join its frequent flier program and training its Atlanta employees in hospitality.
But, said Fairfax, Va.-based airline consultant George Hamlin, “The really high bar they’re going to have to surmount is people with existing Delta frequent flier accounts…. There’s a lot of loyalty to Delta and it’s the hometown carrier.”
On a recent Friday night, more than a thousand of Southwest’s 3,000 Atlanta employees gathered at the College Football Hall of Fame in downtown Atlanta for a kickoff of the Southwest campaign. Kelly held court on the stage and showed a video on a giant screen of some of the new commercials that feature the airline’s Atlanta employees, while spurring workers into a competitive spirit.
“We’re going to need to bring everything we’ve got to take on the big guy across the field,” Kelly told them. “Our competition has more flights than we do, and they can match our fares.”
But there are a few key differences between Delta and Southwest that hinder true head-to-head fare competition. For one, Delta has more than 950 daily flights from Atlanta, while Southwest has about 130 on one concourse at Hartsfield-Jackson. Delta and its partners control about 83 percent of the market share in Atlanta versus Southwest’s 11 percent. The gap has grown since Southwest announced its AirTran takeover in 2010.
Delta flies to about 220 destinations from Atlanta, while Southwest flies to close to 40 — meaning there are many markets where the two do not directly compete with nonstop flights. Southwest officials note that even though the carrier has fewer flights than AirTran did, it has larger planes and carriers more local, as opposed to connecting, passengers.
Southwest also has mostly domestic flights, as well as no first class and no assigned seats — both perks favored by business and frequent fliers.
“I think the people with AirTran, particularly the ones that wanted first class, I think they’re already gone,” said Hamlin, president of Hamlin Transportation Consulting.
On the other hand Southwest also has no baggage fee and no change fee policies. Each airline has its fans, based on different travel needs and preferences.
While AirTran flew to a number of Caribbean destinations from Atlanta, Southwest is cutting most of them, including routes to Nassau, Montego Bay, Aruba and San Juan early this year, as it moves international routes to other airports.
What’s more, Southwest fares, unlike AirTran’s, are not listed on online travel agencies like Orbitz, Expedia, Priceline or Kayak, making price comparisons more difficult. And although Southwest promotes its low fares, it does not always have the lowest price, and average fares have increased since Southwest entered the market.
However, the biggest competition might be for last-minute travelers on routes where Southwest and Delta compete. That’s because Southwest as a low-cost carrier typically has cheaper last-minute fares than full-service legacy airlines like Delta. That’s also what makes Southwest attractive to many cost-conscious entrepreneurs, salespeople and small business travelers.
It has been three years since Southwest launched its first flights in Atlanta, yet the airline had not yet put on a full-court push of its service. That’s because until fairly recently, most of its Atlanta flights were still operated under the AirTran Airways brand as the merger integration slowly progressed.
“Usually they come in and say, ‘We’re Southwest,’ with a big blitz,” Hamlin said. But, “when they had a hybrid product they really couldn’t do that effectively.”
With the AirTran brand now retired, “Now is a very logical time for a relaunch,” Kelly said. “There’s still customers that have never tried Southwest…. It will take some effort.”
Source: southwest - Google News http://ift.tt/1zVbg3Z
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