New Southwest service to Phila. sets battle for passengers in motion

Airline's presence brings `competition to new level'

May 10, 2004|By NEW YORK TIMES NEWS SERVICE

PHILADELPHIA - Southwest Airlines Flight 741 took off for Chicago at 6:59 a.m. yesterday, inaugurating a critical city for Southwest, the nation's largest low-fare carrier, and setting off a flash point for the brutally competitive airline industry.

While depicted as a threat to struggling US Airways, which uses Philadelphia as one of its three hubs and operates 68 percent of its flights from here, Southwest's presence has set in motion a battle for passengers between low-fare carriers and traditional airlines that epitomizes what is going on nationwide.

Now that Southwest has started service, Philadelphia residents can soon expect Frontier Airlines to arrive, with low-priced service from the West. Delta Air Lines, meanwhile, has expanded flights to Philadelphia from Atlanta, a route where it competes with AirTran Airways, another low-fare airline that preceded Southwest here, as did ATA Airways and America West.

"This one brings the competition to a new level," said Philip A. Baggaley, the airline industry analyst with Standard & Poor's, which downgraded US Airways last week, giving it the weakest rating of any major carrier.

US Airways executives have expressed a mix of trepidation and confidence. The airline warned last week that increasing competition from low-fare airlines put it in danger of a second bankruptcy, unless it could win a third round of concessions from union members.

The airline's executives also maintain that the fare wars here will attract more passengers. "You can expect to see Philadelphia grow," said B. Ben Baldanza, US Airways' executive vice president for marketing.

But competitors think US Airways' long hold here will probably be shaken. "Everybody wants a bite out of them," said David Neeleman, chief executive of JetBlue Airways, the low-fare carrier, which does not yet serve Philadelphia.

Southwest, the sixth-largest airline overall, started its service with 14 daily flights to six cities. That is only a fraction of the 375 flights a day that US Airways offers from here, including international flights. (Southwest does not fly outside the United States.) But Southwest is wasting no time in increasing service, which will reach 28 flights a day to 12 cities by July.

Last week, US Airways said it planned to cut back on operations at its hub in Pittsburgh to deploy planes here and reorient its operations to offer more direct flights, mirroring those operated by Southwest and other low-fare carriers.

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