Thursday, February 19, 2009

February 19, 2009, 10:22 am
Southwest Takes Aim at Boston Logan
Posted by Matt Phillips

With its announcement last night that it will start service to Boston’s Logan International Airport, it seems like Southwest is continuing to shift its focus from secondary airports into the heart the country’s major hubs.

Southwest says it intends to start service to Logan International this fall. The carrier has not released specific details of new service, saying only that it will start with a “conservative number of flights that will complement its 64 airport network.”

Southwest’s plans for Boston are only its latest foray into primary airports in major markets. In November, Southwest announced plans to begin service to and from New York’s LaGuardia airport, bidding $7.5 million to purchase defunct carrier ATA Airlines’ takeoff and landing spots at LGA. Southwest also plans to add service at Minneapolis this year, as well as Canada and Mexico through partnerships with other airlines.

Such moves reinforce the sense that CEO Gary Kelly is running a very different airline from the one fashioned by Southwest’s co-founder, Herb Kelleher.

Kelly hasn’t been afraid to tear up the old Southwest playbook by attacking competitors’ fortress hubs, such as Philadelphia, Denver and Minneapolis, something Kelleher generally avoided. He also has explored code-sharing to a greater extent.

“This is another step back in a long line of moves that changes Southwest’s historical business model,” wrote aviation consultant Scott Hamilton, of Leeham Co., in an e-mail to the Terminal. “Southwest used to avoid big city, congested airports and/or hubs of other airlines by focusing on secondary airports. It’s run out of secondary airport and now has no choice but to go into the big-city airports. With rising labor costs—Southwest now has one of the highest labor costs-to-expenses in the industry—Southwest has to go where the passengers are chasing revenue.”

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