Southwest at Dulles May Hurt Its BWI Hub

Southwest acknowledges that the move to Dulles is atypical and that some business will shift from BWI. About 10 percent of BWI passengers drive in from Virginia.


When Southwest Airlines launches service at Washington Dulles International Airport on Thursday, one of its largest competitors is likely to be Southwest Airlines.

Southwest is entering a market that will draw from its hub just 60 miles away at Baltimore-Washington International Thurgood Marshall Airport. Taking in Southwest's presence at Philadelphia International Airport, the move to Dulles will make this region Southwest's second-largest saturation point behind Southern California, where it serves four airports in the Los Angeles area.

And it's the first time the nation's top discount carrier has moved into an airport so close to one of its top hubs.

Southwest typically doesn't use airports in close proximity because its discount fares often draw passengers from 90 miles away or more. Southwest also rarely sets its sights on such a big, busy airport as Dulles because its business model relies heavily on frequent flights and staying on schedule.

Southwest acknowledges that the move is atypical and that some business will shift from BWI. About 10 percent of BWI passengers drive in from Virginia, airport officials say, and much of the cannibalization could come from there.

"I do not enjoy the drive to and from BWI, but do it to save my employer on expenses," David Fisher, a health care consultant from Purcellville, Va., said in an e-mail. "Once Southwest enters [Dulles], I do not intend on driving to BWI ever again."

But Southwest executives insist that they will add new passengers to offset any cannibalization and that in any case, they cannot hurt themselves anywhere near the degree that Dulles-based Independence Air did while it was in business.

They say Southwest has increased its presence at nearly every airport it has entered, even after the airline has moved into a nearby airport.

"We're not backing off Baltimore because we're going to Dulles," said Richard Sweet, Southwest's senior director of marketing and sales.

"We recently announced service from BWI to Detroit. It's been the same in the Los Angeles basin and the others. We'll fly the same routes, and customers have a choice," he said. "You could fly into BWI, make three or four client calls and end up at Dulles."

Airport officials and aviation experts say there are reasons to agree with Southwest's strategy, one being that the Northern Virginia suburbs around Dulles are among the fastest-growing and wealthiest in the nation.

"I don't believe anyone can make a wrong decision going into Dulles," said Darryl Jenkins, an aviation consultant who lives in Northern Virginia.

"Wherever Southwest goes, it has an impact. I understand if the BWI guys are a little concerned, but [Southwest is] going where the population is. That's necessary for their growth and probably means they won't take too much Baltimore business."

Southwest has acknowledged that its BWI hub lost a significant amount of business to Independence Air, which operated hundreds of flights a day at deep discounts.

Convinced that Independence couldn't stay in the air for long, Southwest chose not to lower its BWI fares to match Independence's. The gamble paid off when Independence closed in January - opening space at Dulles for Southwest, as well as JetBlue Airways and United Airlines.

Southwest is taking only two gates at Dulles and plans only a dozen daily flights to start, at fares somewhat higher than Independence offered and the same as Southwest charges at BWI.

Those two factors, plus the growing pool of passengers in Northern Virginia, should mean that Southwest could thrive in both airports, said Mike Boyd, president of the Boyd Group, aviation consultants and forecasters.

"Independence didn't create a void, it created a bubble," he said. "It was selling seats for under cost and when it went away, many of those passengers went away. Southwest will stimulate more traffic at Dulles, yes, but not like Independence."

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