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Tue September 25, 2012
Southwest Drives Down Some ATL Airfares, But Little Effect on Market Overall
It’s been seven months since Southwest Airlines began service into Atlanta.
That’s the same time when average airfares out of Hartsfield-Jackson International Airport reached an all-time high -- $392.
Since Southwest acquired AirTran, it’s been slowly phasing out the AirTran brand.
But what about prices?
Is Atlanta seeing the so-called “Southwest Effect,” where prices overall plummet when the airline enters a new market?
On most routes, the answer is "no."
But for travelers heading from Atlanta to Norfolk, Virginia or Louisville, Kentucky, the answer's a resounding "yes."
In August, when Southwest began service to Louisville International, Karin Olmsted lined up to board Southwest flight 25. A recruiter for a big university in Louisville , she was eager to talk about why she chose Southwest.
“It’s a lot cheaper than the normal airline that flies here,” Olmstead said.
The “normal” airline Olmstead was referring to is Delta. Before Southwest connected Hartsfield-Jackson to Louisville International, Delta’s median round-trip fare for the one-hour flight was about $500, plus baggage fees.
Olmstead couldn't justify paying that, so she got creative.
“There have been many a time I’ve had to fly around Atlanta to get here. Like I used to take the one-way to Birmingham and get off.”
To save money, Olmstead would book a flight to Birmingham, which Delta connects through Atlanta. She’d get off here, but have to find a way to Birmingham to get back to Kentucky.
No more of that, she said.
“My ticket was under $100 today. I think it was $94,” she said, smiling.
One day after Southwest’s inaugural Atlanta to Louisville flight, airport and city officials held a press conference. As local TV cameras rolled, airport board chair Phil Lynch praised Southwest for becoming Louisville’s largest—and in his words—most important carrier. He welcomed media by calling the day "yet another milestone" in the airport's history.
Speaking to WABE after the press conference, airport Executive Director Skip Miller said Louisville loves Delta, but that its prices were “irrational.”
“Someone suggested when you’re born you have a Delta frequent flier card automatically handed to you in Louisville," Miller joked. "They’ve been around a long time. They’ve provided excellent service here. It’s just the pricing needed some rationalization”
And Southwest was the single factor in bringing down fares, Miller said.
Delta is now matching Southwest’s lower fares to Louisville and Norfolk.
Anthony Black, a Delta spokesman, said Delta doesn't comment on how it chooses what to charge passengers.
“Overall, I would say we are competitive with all carriers nationwide on fares,” said Black.
He also said Delta offers perks that Southwest doesn't-- things like a first-class cabin, in-flight Wi-Fi on all flights, and SkyClub lounges.
In Louisville, Southwest flies three times as many passengers as Delta. But building that dominance took nearly two decades.
Meanwhile, in Atlanta, Delta operates two-thirds of flights into and out of Hartsfield-Jackson. Any real challenge to its dominance here is unlikely.
And while fares on a few routes have fallen since Southwest entered the Atlanta market, overall, travelers are paying as much -- or more -- than they ever have.