Since it first landed in Baltimore in 1993, Southwest Airlines has used cheap fares and savvy marketing to systematically dismantle US Airways' East Coast strongholds, leaving many in the industry to conclude that it was just a matter of time before the weakened airline became another footnote in aviation history.
But US Airways struck back yesterday by announcing a merger with America West Airlines, perhaps the only major airline that has managed to hold its ground while engaged in a head-on competition with Southwest, the nation's largest low-fare carrier.
While few expect the merged airline to slow the East Coast expansion that Southwest launched from Baltimore-Washington International Airport, the combination will alter the dynamics in what has so far been a one-sided battle for turf between Arlington, Va.-based US Airways and Dallas-based Southwest.
Analysts now see a reinvigorated US Airways surviving Southwest's onslaught and potentially diverting its attention toward smaller airlines such as AirTran Airways and weaker ones such as Delta Air Lines, which faces a life-or-death struggle to cut costs and erase debt.
"BWI is safe," said Robert W. Mann Jr., president of the airline consulting firm R.W. Mann & Co. in Port Washington, N.Y. "They [Southwest] will fill up the facility just as fast as they otherwise would have. They'll just take it out of somebody else's hide. There's lots of skin to go around."
A low-cost US Airways could lead to increased fare competition that will benefit consumers, analysts said.
"I think they're going to be a formidable opponent," said Terry Trippler, chief executive of Farefacts.com, a Minneapolis travel adviser. "I see nothing but a win for the consumers."
Southwest said it plans to stick to its current business strategy.
"Right now, as far as the Southwest business plan, we don't have any plans to change," said Whitney Eichinger, a spokeswoman for the airline. "We forecast continued growth independent of this merger, but also consider this could be a consolidation of the industry which results in a reduction in capacity, which would be good for the industry."
Few would have given US Airways any hope of getting Southwest off its back a few months ago. Struggling through its second bankruptcy, the airline was held back by high costs and operational problems that opened the door for Southwest to swipe market share on its most profitable routes.
