What will it take for more Southwest service?
Growing the initial service that begins Sept. 30 depends on people flying into Des Moines
Friday, August 31, 2012 7:00 AM
The Southwest Effect
• Southwest Airlines Co. operated at 31 of the 50 airports with the lowest average ticket prices in 2011, as opposed to only 10 of the 50 airports with the highest ticket prices.
• When Southwest came to Omaha in 1995, Eppley Airfield went from being the 80th least-expensive airport among the largest 150 to being the 41st least-expensive in a one-year time span. Omaha’s average airfares have been lower than the national average in every year but one since.
• Southwest’s average passenger airfare is $141.72 one-way, according to the company’s website.
Data drawn from the largest 150 airports as measured by passenger volume in 2011. Source: Bureau of transportation statistics
Southwest Airlines Co. hasn’t yet started its limited service out of Des Moines, but Ron Ricks anticipates the next question. Next month, the airline will offer two daily round-trip flights between Des Moines and Chicago’s Midway International Airport. Ricks, executive vice president, chief legal and regulatory officer at Southwest, said whenever his company enters a new market, he soon is asked, “When are you going to add flights?”
“My answer is ‘After we determine that these that we have are successful,’” he said. Ricks knows that Greater Des Moines residents are excited about the airline’s arrival on Sept. 30.
“As of right now, we’re going to just monitor the results for how well we do,” Ricks said. “We’re cautiously optimistic, but certainly, as a private company with a desire to continue to be the most successful airline in America, if the demand is there, that’s our job to fill it.”
Des Moines International Airport Executive Director Don Smithey is optimistic that Southwest will add service in the future.
He worked closely with Southwest officials when he managed Omaha’s Eppley Airfield and continues to provide the airline with information. That information includes the numbers of passengers flying to different markets and the likelihood of attracting fliers from a geographic area around Des Moines that contains approximately 2 million people.
When Southwest bought AirTran Airways – which provided flights between Des Moines and Milwaukee – last year, the company had a decision to make: Convert the AirTran services to Southwest, or pull out of the market. In meeting with Smithey, Gov. Terry Branstad and others, Southwest officials liked what they saw happening economically in Des Moines, Ricks said. They saw that the market was underserved and overpriced.
Because Southwest has more connecting flights out of Midway than AirTran had out of Milwaukee, Ricks said the airline can provide four to five times the number of one-stop connections across the country than AirTran did. That alone has the potential to attract more customers to fly to and from Des Moines.
The business model’s success, Ricks said, depends on people using the service to fly into Des Moines. Rising fuel prices also add a variable that Southwest can’t control, which provides an element of unpredictability for the future. To that end, the more Des Moines businesses and residents can encourage people to use Southwest to fly into the city, the more likely the airline is to add flights.
“Many business travelers are thankful to Southwest for lowering fares but keep flying ‘Brand X’ because of their frequent-flier miles,” Ricks said. “That won’t work. Use it or lose it.”
Lest that sound like a shameless plug, Ricks pointed out the “Southwest Effect,” which shows that markets that have Southwest service generally see lower airfares.
In fact, business executives in Omaha, where Smithey managed the airport for about 20 years, vouch for the importance of the Southwest Effect. When Southwest entered Omaha in 1995, fares dropped and passenger numbers rose.
“I don’t know if you can put a number on it – it sure as heck helped,” said Omaha entrepreneur Willy Theisen, founder of Godfather’s Pizza and past airport authority member in the city. “I don’t know many cities that wouldn’t welcome a carrier like Southwest coming to their town. ... I’m sure it played a large role for a lot of folks in this city for people doing business here.”
Southwest officials are confident that its Des Moines service will work, Ricks said, based on the company’s track record of successful market additions.
“You see the potential. The key word is potential,” he said. “Then you’ve got to make it work. As the old expression goes, we’ve done the easy part. We’ve said it. Now we’ve actually got to go out and open the doors up and see if anyone shows up. Of course, we think they will.”
Smithey thinks they will, too. He points out that businesses in Greater Des Moines surrounding towns such as Marshalltown, Grinnell and Pella need more affordable air service. Smithey also expects the Greater Des Moines Convention and Visitors Bureau to play a part in drawing people into the area with the improved air service.
And he wants Iowans to use the service to fly out of Des Moines.
“I also feel, with the experience I have had for all these years, we need to generate those numbers here too,” Smithey said. “I want to generate as many enplanements as we possibly can. And if the market is substantial, then you will see other people coming in here.”
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