As part of the merger between Continental and United Airlines, Southwest picked up 18 slot pairs at Newark. The first of those slots become available in March and that service was previously announced: 6x daily to Chicago Midway and 2x daily to St. Louis. The balance of the slots become available on June 5, 2011 and today the airline announced 4 new cities that will receive service at that time.
The new service is “connecting the dots” for Southwest in a big way. The carrier will serve Phoenix, Houston (Hobby), Baltimore-Washington International and Denver, all cities with significant existing presence. Perhaps most significant, however, is that the move puts Southwest in competition with the new United in a very direct way. Although they cannot compete on frequencies, Southwest will be offering direct competing service to four hub cities that the new United serves. Sure, Midway and Hobby are different than O’Hare and Intercontinental, but there is still going to be competition on routes that haven’t seen much in quite some time.
Chicago – Newark is priced with a significant premium for passengers on short, mid-week trips. With the new competition in place odds are that the new United will have to respond or see a decent chunk of business head to the south side. Houston is similar; this is the first time in recent memory that another carrier will ply the Houston – Newark route.
When JetBlue announced new service on the Newark – Boston route the pricing impact was significant. The prices for the initial launch sale in these markets are not quite as low as those JetBlue fares were, but with a max of $129++ each way there certainly is going to be some real price pressure in these markets and quite likely in many others that Southwest can provide connecting service to. It will certainly be interesting to watch for the Continental/United response to this move.
- JetBlue now selling Boston-Newark, killing Continental cash cow
- Continental/United merger approved by DoJ
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