Southwest's Breaks Pattern in Choosing Denver Airport

The sprawling airport isn't anything like the secondary facilities that the Dallas-based discounter prefers to fly from.

Southwest is legendary for being deliberate about launching service to new cities, taking from six to nine months between announcing a destination and beginning flights. But the carrier has been in a rush in Denver because it wants to deploy planes that were idled when Hurricane Katrina knocked out most air service to New Orleans.

"That's the fastest we've done it since I've been here," said Mr. LaPorte, a 13-year veteran who moved from Southwest's Manchester, N.H., location to run the Denver site.

Frontier and United

Both Frontier and United have matched Southwest's low fares for its nonstop flights between Denver and Phoenix, Las Vegas and Chicago. If fares are comparable, that will leave passengers to choose between Southwest's no-frills service and Frontier's, with its TV and pay-per-view movie channels, and United's, which has all the trappings of a big traditional carrier.

"They're not going to have any advantage on price, on schedule, and our in-flight product is clearly better," said John Happ, Frontier's senior vice president of marketing. "We have unmatched brand equity in this market that they don't."

"We feel our global network, premium seating products and superior frequent flier programs are going to keep us competitive," said Ms. Urbanski, a spokeswoman for United, based in Elk Grove Village, Ill.

All those perks aren't any cause for concern at Southwest, officials said, and the airline remains committed to not assigning seats or complicating its operations.

Frontier is no stranger to challenges to its home base, as when United launched its low-fare "Ted" brand in November 2003 at Denver International. Mr. Potter said he thinks Frontier's employees are ready for head-to-head battle with Southwest, an airline that competitors generally shudder to see come to town.

"We never underestimate our competitors," Mr. Potter said. "But we do a lot of things very well here."

Denver International's Ms. Covington said she's not concerned that attracting Southwest could spell long-term financial trouble for either of the airport's bigger tenants.

"I think both of these guys are really good competitors," she said. "But everyone has always asked us, 'When is Southwest coming?' "

Analysts appear to be split on Frontier's fate, particularly if Southwest dramatically expands its Denver schedule beyond the initial three cities it will serve nonstop.

Though Frontier's stock price fell nearly 30 percent on the day Southwest announced its Denver service, the shares have crept back. Some analysts like the chances of Frontier, which flies six times a day to D/FW. Ray Neidl of Calyon Securities Inc. upgraded the stock in December.

But concerns remain about Frontier's cash on hand, which in September stood at $144 million in unrestricted cash. Southwest's cash hoard is nearly $2 billion. Frontier warned investors in late November that it faced potential cash flow problems.

Mr. Potter said Frontier has enough cash to get by. The carrier's recent moves to raise more cash and cut debt "are more like an insurance policy" in volatile times, he said. Plus, Southwest's 13 daily flights from Denver aren't a huge threat for a carrier that has 250 departures and is increasing its Mexico flying, a market Southwest isn't interested in.

Southwest officials said the carrier's modest Denver schedule will grow. The carrier plans some short-term additions this spring, flying on Saturdays to San Diego and Oakland, Calif., Mr. LaPorte said. "We're going to test some markets, which is something that's not our typical MO," he said. "But the demand is there."


SOURCES: Denver International Airport; Dallas Morning News research


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