July 17, 1993
Southwest Airlines hadn't even formally announced its arrival at Baltimore-Washington International Airport when its impact was felt. Already other airlines are slashing fares and improving service to cities Southwest will reach from BWI starting in September. That's a foretaste of what will come as the airline from the sunbelt makes its entrance to the East Coast market. Likely winners: the air traveler, BWI and the Maryland economy.
Southwest is an anomaly among airlines. It makes money year after year while the others are losing it in copious amounts. It does so despite sharply lower fares and none of the extra services once deemed vital to the air traveler. It has an enviable on-time record. It draws travelers from farther away than the typical airline, often from trains and buses rather than other airlines. Frequently it attracts so much new traffic to an airport that some of its competitors benefit as well.
The Dallas-based airline's secret is simple. It gets people where they want to go quickly, safely and in reasonable comfort. Seats are not assigned; meals are not served; baggage is not transferred to other airlines. Southwest specializes in relatively short-haul routes to popular destinations with uncongested airports. As a result its planes spend far less time on the ground, and its costs are 25 percent lower than the industry average. In return it charges travelers a small fraction of what had been the prevailing fare. USAir, the dominant carrier at BWI, and Continental have already responded with sharply lower fares and increased flights to Chicago and Cleveland, the two cities Southwest will initially serve from BWI.
The cost-conscious traveler to Cleveland and Chicago, and perhaps to other cities later, will benefit from Southwest's services. BWI will profit from the increased use of its facilities, which have capacity to spare. The low-fare service will bolster BWI's campaign to convince travelers from Washington that it could serve their needs better than distant Dulles or congested National airports. Greater traffic to and from BWI is a boost for the state's economy, both from additional consumer spending and from the attraction that busy airports have for businesses seeking new locations.
Southwest's arrival could become a mixed blessing. USAir operates a regional hub here which accounts for over half of BWI's traffic. The airline is recovering from a severe financial pinch, and it cannot afford to lose a lot of revenue. Nor can BWI afford to see its major tenant seriously undermined. USAir is stronger as a result of its quasi-merger with British Airways. Southwest's arrival usually increases total traffic at an airport and drives away only the marginal competitors. As long as the competition doesn't get too brutal, Southwest will give the state's economy a big boost.
