First, let me apologize for the dead silence on the blog.  I’ve been very ill and way overtaxed at my day job for the past week.  I feel better and my work load is manageable again.

 

Southwest Airlines has announced in fairly quick succession service into 3 airports that, traditionally, Southwest has not wanted to fly to.  Minneapolis / St. Paul, New York La Guardia and now Boston’s Logan airport.  Southwest purists are no doubt predicting Southwest’s demise and Southwest fans are no doubt cheering Southwest’s cheekiness. 

 

The fact of the matter is that Southwest is evolving again.  Like every other successful airline, Southwest has evolved at important moments in the airline business.  Oddly enough, Southwest really started out as more of a businessman’s airline than anything else in the early 1970’s.  It served the Texas businessman with routes to Texas’ major cities with high frequency and low fares.  By basing themselves at inner city airports (in Houston and Dallas anyway), they made themselves more convenient for those travelers.

 

Then they evolved to a regional airline serving more than just businessmen but also increasing their market share by becoming attractive to the people who wouldn’t have flown but for Southwest’s low fares.  They became the Low Fare airline through the 1980’s. 

 

Then in the 1990’s, they began to evolve again.  This time they became the continental airline.  A low fare but not Low Fare airline that instituted service to major and minor cities throughout the US that were underserved with low fares.  This saw growth on both coasts of the United States and mid-west.

 

Well, the airline industry, for Southwest anyway, has changed again and instead of ignoring those changes, Southwest has clearly decided to evolve once more.  Mind you, I don’t know if this next evolution will be successful.  Only time will tell.  But it shows that Southwest is indeed paying attention to its business.

 

This next evolution is really about the business traveler.  It doesn’t mean Southwest is giving up on being a low fare airline.  It means that Southwest recognizes that in order to grow its business, it is time to serve new(er) demographics such as the business traveler (again) and the markets those travelers want to fly to.

 

This was first evidence by Southwest remarketing its same day fares as a kind of Business Class fare.  Smart because that really is what they are.  Then they began to rework their gates at various airports to better serve that business traveler by offering outlets to plug laptops and cell phones into, offering better and more comfortable seating and some variation on priority boarding. 

 

Now I think Southwest is identifying important markets that their loyal business travelers need to access.  Their Mid-Atlantic customers need to get to places like New York City and Boston.  Their Mid-Western customers need to get to places such as Minneapolis / St. Paul and Denver.   So Southwest has began working to serve those markets.

 

There is one glaring omission so far and that is Atlanta.   Most pundits believe that Southwest will never enter the market fearing Delta and Airtran’s response.   While I agree that the reaction by those two airlines will be fierce, I also think it is inevitable that Southwest find a way to fly there some day soon.  Will it be a focus city?  No, probably not. 

 

It is the most important city in the Southeast that so far goes unserved by Southwest.  With a strong customer base in Florida, Alabama, Tennessee, Lousiana, Texas, Arkansas, Virginia, North Carolina, Ohio, Pennsylvania, Indiana, Illinois and Missouri, of course they need to find a way into Atlanta.

 

And they will.  It won’t be a big start.  Just as Boston, La Guardia and Minneapolis / St. Paul have all been announced as very small operations, so will Atlanta.  But Southwest will find a way to connect Atlanta to their focus city system in short order and begin serving those routes for their business customers. 

 

There are a few other cities I’m looking at for Southwest service in the next couple of years.  Charlotte, North Carolina would be a good destination and so would Colombia, Greenville and Charleston South Carolina.  Milwaukee, Wiscsonsin should become attractive too.  Why?  Because they have important routes to places like Minneapolis, Atlanta, Washington D.C. and into other parts of their network.

 

Southwest isn’t crazy.  They aren’t desperate and they aren’t misguided.  Gary Kelly, the new CEO isn’t behaving stupid or incautious.  Southwest is simply evolving again.  With each evolution, there comes risk but to Southwest’s credit, they have identified where they can grow effectively and they’ve even recognized the risks and challenges involved.  They feel prepared to take on those risks and challenges and I suspect they are ready.

 

 

 

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