If any airline can succeed with this, it is Southwest. The subsidy makes no difference to the customer as long as SW is willing to try. They will do OK to Baltimore and Nashville in part because the "beyond" traffic is good, and assuming Delta rolls over for them.
Several airlines have tried Orlando and Houston before and it was always weak (not just those cities but east-west along the Gulf in general - New Orleans and Tampa no better). East-west and intra-Florida will make or break it unless they are so successful north-south that they can re-direct their excess seats there. The obvious new market is extending fly-in Orlando vacations to our beaches - a possibility but Disney and the other Orlando stops will fight to keep the traveler there. (If they can build China, they can build a nice beach.)
With the subsidy SW has the luxury of a "competition lab" at no risk for two years - I suspect the experiment intrigued SW as much as the fundamentals. Customers could care less - they will go where their budget and reasons for travel coincide. SW and St Joe have satisfied the budget piece - now the beaches must deliver a reason to travel. Panama City and eastern Bay County are "all in", having "contributed" 1/3 the cost, about half the passenger base, the community airport, and a natural resource that cannot be replaced or "relocated".
Good luck, beaches, it's your moment.
Thursday, December 17, 2009
SW and the Beaches
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