In the past decade, Southwest Airlines and a handful of small followers have turned a sleepy Baltimore-Washington International Airport into a low-cost powerhouse and the envy of other airports.
But when Southwest moves into a state-financed $264 million terminal of its own next year, the airline that so pleases the airport and its budget-conscious travelers might hamper BWI's efforts to lure other carriers that could bring new services, destinations and income.
The industry is not widely expanding in the face of overwhelming financial woes resulting from fuel and labor costs, and a decline in big-spending business travelers. And the gold rush that brought Southwest, AirTran Airways and others to BWI has spread to other airports, where low-fare carriers hope to find a new niche.
"We're not avoiding competition with Southwest, but we're looking at where fares are still high," said Gareth Edmondson-Jones, a spokesman for JetBlue Airways Corp., the industry's newest low-cost darling with its leather seats and televisions.
The slowdown in growth at a mature BWI will affect all kinds of service. The airport probably won't get more low-fare carriers that travel to the nation's biggest cities and offer first-class amenities that set them apart from Southwest.
International service is expected to expand even more slowly, despite a $140 million terminal that opened in 1997 to accommodate more overseas flights. Ghana Airways recently was shut down, and Aer Lingus has said it will suspend service in the winter, and possibly longer, shrinking the number of international carriers at BWI to six.
At the same time, BWI faces new threats to its regional market share from Washington and Philadelphia airports, which have also landed low-cost airlines.
"There has been a real demand for low fares, and what low-fare carriers have tended to do is grow into the available capacity at airports," said Robert Mann, president of R.W. Mann & Co. Inc., a Port Washington, N.Y., airline industry analysis and consulting company.
"At BWI, Southwest and a few others have done that. The issue now is Southwest has outgrown the space it has, and BWI had to do something or risk strangling the one thing keeping it going."
So, BWI is expanding its terminal to allow Southwest to grow, but the airline will leave eight empty gates that Mann and other analysts say might be only partially filled by other healthy low-cost airlines serving BWI.
A small amount of growth could come from major airlines that shift airplanes as they undo their traditional hub-and-spoke networks in favor of more point-to-point flights. But the rate of growth will be nothing compared with the rapid expansion of Southwest, which surpassed US Airways as the dominant carrier at BWI in 1999.
Jonathan Dean, a BWI spokesman, said airport and Wall Street officials worry when an airline takes over 70 percent of the service in a city the majority of travelers are passing through rather than coming to or from that city. Southwest is just nearing half the market share at BWI.
"Southwest clearly changed BWI forever," Dean said. "That's the Southwest effect. But BWI offers a healthy level of competition. ... Some airlines have already said they plan more service here. And the airport is consistently working with all its current airlines, as well as others, to boost service."
Carriers now at the airport have confirmed that they will expand in Baltimore. They include low-cost airlines AirTran, the airport's No. 2 carrier, which flies directly to big cities that Southwest doesn't serve, and USA 3000, which flies to some international cities not served by Southwest. US Airways, a major carrier operating under bankruptcy protection, said it will move a few flights to BWI as it shifts its airplanes around in its reorganization.
AirTran's executives say they feel no pressure to move quickly at Baltimore because space will be readily available. The more urgent focus for that airline and others has shifted to airports such as Chicago's Midway, where ATA Airlines recently agreed to give up its hub after filing for bankruptcy protection.
AirTran is ATA's choice to take over 14 gates there and a smaller number of gates at New York's LaGuardia Airport and Washington's Reagan National Airport. But Southwest, which announced new flights for Chicago last month in response to the ATA developments, and other airlines have expressed interest.
"There is plenty of room to grow in Baltimore, but in Chicago this is it," said Stan Gadek, AirTran's chief financial officer.
Southwest has much the same attitude about BWI. In the spring it will begin to move into its new terminal space, where it will have room to grow from 163 daily flights to more than 200, but the airline has not said how fast it plans to add service. The number of Southwest gates at BWI will increase from 21 to 26, with room for five more.
Because of Southwest's size, that means much of the flights and amenities offered by the airport will be up to the airline.