In airline parlance, when a single airline dominates a local market, that city is called a "fortress hub." There aren't many fortress hubs left as Southwest, AirTran and JetBlue keep expanding. Our Savvy Traveler, Rudy Maxa, takes a look one year later at what happens when the walls of a fortress hub crumble.
Last year, a visitor to Philadelphia's airport had to look hard to see anything other than rows of US Airways' silver, red, and blue planes on the runway. But, then, with much hoopla, Southwest arrived. One year later, the numbers are in, and they're quite astounding.
The number of people flying in and out of Philadelhia has increased by 30 percent. This is not just because there are more planes are flying. It's also because fares plummeted. Even before Southwest's first flight, US Airways scrambled to blunt the competition by emulating the low-fare carrier. US Air eliminated Saturday-night stayover requirements and dropped its prices.
Listen to these stats. According to Southwest, since it entered the Philly market, US Airway's one-way fares between Philadelphia and Raleigh-Durham have fallen 74 percent. Between Philly and Phoenix as well as Philly and Los Angeles, they've fallen by 33 percent. Traffic to Houston, Oakland, and Raleigh-Durham then doubled while the average, one-way fare for those routes fell 40 to 70 percent.
The results are most eye-popping on short runs where US Airways used to own the skies. Fares for one-way trips to Manchester, New Hampshire, fell from $245 to $43. That obviously made locals want to fly. Traffic is up 828 percent on that route alone.
Nothing like a little competition.
But, of course, US Airways is struggling, trying to find a way to cut costs and emerge from bankruptcy. The other legacy carriers--American, United, Continental, Northwest and Delta--are doing the same thing, drowning in red ink. They, too, are facing competition from low-fare carriers. American dropped its non-stop, trans-continental flights out of Long Beach in southern California when JetBlue challanged 'em. Frontier is hurting United at that airline's former fortress hub, Denver. And Delta may be locked in a death match with AirTran in Atlanta, long Delta's home.
Plain and simple, the days of fortress hubs are over, though I'll admit, in my new hometown of Minneapolis-Saint Paul, Northwest Airlines still has the playing field to itself. But even that won't last.
As Philadelphia proved, competition is good for consumers. Now it's up to the management and employees of the country's airlines to get lean and mean to compete with the Southwests of the world.
From Saint Paul, I'm Rudy Maxa for Marketplace.
May 18, 2005