BWI to Lose Eight Flights; Southwest Decision Affects Transcontinental Nonstops

Faced with a slowing economy and higher fuel prices, Southwest Airlines announced yesterday a rare curb on its fast-paced expansion that will include slashing nonstop transcontinental service from some cities, including Baltimore.

Baltimore-Washington International Thurgood Marshall Airport, Southwest's fourth-largest hub, will lose eight nonstop flights, effective in October and November. That's the most of any airport, and it means passengers traveling this fall will have to make stops on most flights to California.

The same goes for those who drive to Philadelphia to catch a Southwest flight to the West Coast. From Washington Dulles, Southwest passengers can fly nonstop only as far as Las Vegas.

Gary C. Kelly, Southwest's chief executive officer, noted that passengers will still be able to fly to the same cities - just not nonstop. And the overall changes represent a net increase in service nationwide. But in a call to analysts and media on the 30th anniversary of the carrier's listing on the New York Stock Exchange, he acknowledged that Southwest will slow its rapid growth and look for new ways to produce revenue.

The carrier will increase its fleet by 19 aircraft next year, 15 fewer than it had planned. It will slow growth in capacity - the number of seats available - by about half to 6 percent. It also will make changes to its frequent-flier program, seek more business travelers, launch new advertising and decide if it will begin assigning seats.

Kelly said all changes will be made before the year's end.

"We are targeting more than $1 billion in incremental revenue over the next few years to overcome higher fuel costs and reach our financial targets," Kelly said.

That includes eliminating 39 round-trip daily flights and adding 46 new ones in places such as New Orleans and Denver.

The biggest losses will be in Baltimore and other major Southwest centers such as Phoenix, Los Angeles, Chicago and Oakland, Calif.

Transcontinental flights made economic sense for Southwest when it had a large percentage of its fuel costs hedged, or purchased in advance for cut rates, said Robert Mann, president of R.W. Mann & Co. Inc., a Port Washington, N.Y.-based airline analysis and consulting firm. But now that many of the hedging deals have expired, and Southwest is paying nearly what the other carriers are paying for fuel, the flights might not be profitable, particularly since Southwest's Boeing 737s carry fewer passengers than many competitors' airplanes on cross-country trips.

Response to economy

"It's a response to low economic growth, a tweak to the business model," he said. "It's also a recognition that some flying that made sense with inexpensive fuel doesn't make sense with full-price fuel."

Without in-flight entertainment or assigned seats, business travelers in particular have been reluctant to fly so far on Southwest.

"There was demand for the nonstop service; it just didn't last," Southwest spokeswoman Whitney Eichinger said.

The changes to flights and the addition of other revenue generators will help Southwest, the only airline to be consistently profitable since the Sept. 11, 2001, terrorist attacks, weather an unusual rough patch.

Southwest said it will continue to grow at BWI. For instance, it plans to add service to Oklahoma City in August. By the end of the year, it will have 172 daily flights.

Still largest hub

Airport spokesman Jonathan Dean noted that BWI will remain the largest Southwest hub on the East Coast, and that Kelly said in a speech last week that BWI likely would be a gateway for Southwest's first ventures into international service.

Also, Southwest will continue to offer nonstop service to San Diego. And if that's not enough, Dean added, "BWI customers can still reach those transcontinental destinations nonstop. United [Airlines] flies nonstop to Los Angeles and San Francisco."

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Southwest departures

Southwest Airlines fall flight changes from BWI:

Cleveland:

loses one flight in November, leaving four daily.

Los Angeles:

loses two flights in October, leaving none.

Oakland, Calif.:

loses one flight in October, leaving none.

Long Island, N.Y:

loses one flight in October and one flight in November, leaving seven daily.

Orlando, Fla.:

loses one flight in November, leaving nine daily.

Phoenix:

loses one flight in November, leaving four daily.

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