Southwest plans to eliminate AirTran’s business class and coach compartments—that’s the part where loyal AirTrannies may cry a little.
Today’s a big day for Southwest Airlines, the busiest commercial carrier by far at McCarran International Airport. If all goes as planned, it’s the day Southwest gets ownership of AirTran Holdings, AirTran Airlines’ parent company.
Southwest has been talking about the $1.4 billion deal since September when it was first announced.
But as far as Las Vegas is concerned, the deal won’t produce many game-changing tourism opportunities, at least for now. The excitement may build later in the year or next year when some of the key advantages of the deal are realized.
“There aren’t any earth-shattering changes in store for Las Vegas,” said aviation expert Mike Boyd, the head of Evergreen, CO-based Boyd Group International. “There’ll be a few tears for some people, but they won’t be shed in Las Vegas.”
The reason the effect is expected to be light in Las Vegas is that AirTran is a minor player here and most locals don’t know much about the airline. But most people also have seen the big headlines that have been produced by the deal: Southwest will suddenly have access to the nation’s busiest airport, Hartsfield-Jackson Atlanta International.
Much has been made over the years about the “Southwest effect,” the tendency for fares to fall when Dallas-based Southwest enters a market. A number of analysts—Boyd isn’t among them—expect that to happen when Southwest begins flying into Atlanta. But Boyd argues that AirTran is already a low-fare operator and that Southwest’s ownership of it really isn’t going to change that much.
AirTran doesn’t do a lot of flying west of the Mississippi River, concentrating instead in the South where it is strongest in Atlanta and Orlando. AirTran averages about seven flights a day to and from McCarran, three a day each to Atlanta and Milwaukee and five a week to Indianapolis. Aviation behemoth Delta Air Lines has more than twice as many nonstops from Vegas to Atlanta than AirTran. Its only competition to Indianapolis is Southwest, and to Milwaukee, it has token competition from Frontier Airlines (six flights a week) and Southwest.
Southwest’s AirTran acquisition will give it 37 new cities, including some Caribbean destinations and Cancun, Mexico. Don’t expect Southwest to begin serving them nonstop from Las Vegas soon.
More likely, Southwest would look at connecting the dots between Las Vegas and smaller AirTran cities—such as Wichita, KS; Des Moines; Moline-Quad Cities, IL; Bloomington-Normal, IL; and Memphis.
Would Southwest make a big push in Atlanta and beef up its competition with Delta on its Las Vegas route? It’s hard to say just yet. Some have speculated that Atlanta is destined to become the biggest station on the Southwest map, a title owned by McCarran. Southwest has proved that it is willing to fight hard for market share at big airports, taking on United Airlines in Denver and Northwest/Delta in Minneapolis.
Southwest will have some additional firepower to do so, picking up 138 aircraft in the AirTran acquisition. Most of those are Boeing 737-700 jets, the type of aircraft that comprises the largest percentage of Southwest’s fleet. Much has been made of Southwest’s philosophy of operating one aircraft type and how that cuts costs, but that seems to be the airline’s past and not its future, picking up Boeing 717s in the AirTran deal and announcing separately that it’s acquiring larger-capacity Boeing 737-800 jets.
Some have speculated that Southwest would rid itself of the 717s, which look a lot like Allegiant’s MD-80 jets. But for now, Southwest plans to keep them for some of the small-market AirTran cities it is picking up.
Although Southwest is going to operate AirTran as a separate airline for now, it gradually plans to integrate it into Southwest’s system. That includes absorbing AirTran’s loyalty program into Southwest’s Rapid Rewards and eliminating bag and itinerary change fees on AirTran flights. Southwest also plans to eliminate AirTran’s business class and coach compartments and AirTran’s seat-selection process. That’s the part where loyal AirTrannies may cry a little.
Once the deal is done, it appears Las Vegans won’t have any tears, but there won’t be any wild fist pumping either.