Vegas lands direct Philly flights by Southwest

Thursday, Dec. 11, 2003 | 11:04 a.m.

Southwest Airlines will offer nonstop round trips between Las Vegas and Philadelphia when it begins serving its newest market in May, the airline announced today.

Dallas-based Southwest did not announce a schedule or fares for the route.

By scheduling nonstop flights between Philadelphia and McCarran International Airport, Southwest stepped up competition with US Airways, the dominant carrier on the route, and America West Airlines. Arlington, Va.-based US Airways has five nonstop round trips between Las Vegas and Philadelphia, while America West, Tempe, Ariz., has two nonstop round trips between the two cities.

Southwest announced its entry into the Philadelphia market last month and said today it would begin service May 9 with nonstop flights to Chicago's Midway Airport, Orlando and Tampa, Fla., Phoenix and Providence, R.I., in addition to Las Vegas.

Following last month's service announcement by Southwest, executives with US Airways told its employees to gear up for a competitive battle with Southwest, the nation's sixth largest commercial passenger carrier and the busiest carrier at McCarran with 184 flights a day and an average of about 1 million passengers carried a month.

US Airways Chief Executive David Siegel said in a telephone recording to employees that Southwest's announcement of Philadelphia service would result in his company needing to cut costs and revamp its business plan to meet competition from low-cost carriers.

Analysts regarded the remarks as an indication that US Airways, which emerged from bankruptcy protection earlier this year, is facing a new financial crisis.

US Airways, the seventh largest carrier in the nation, operates a hub at Philadelphia. It has nonstop routes between Las Vegas and its other two major hubs, Pittsburgh and Charlotte, N.C., in addition to Philadelphia, and currently has 11 flights a day to and from Las Vegas. Through October, US Airways flew 847,922 passengers to Las Vegas, making it the ninth largest operator at the airport.

Travel expert Terry Trippler of cheapseats.com said he thinks Southwest's move is the first volley in the airline's effort to dethrone US Airways in Philadelphia.

"I think their Las Vegas route is designed to go after US in a big way," Trippler said. "Las Vegas is a perfect choice -- most people traveling there are not looking for service and Southwest provides none. It's harder to disappoint when expectations are low."

Trippler said he thinks Southwest's objective is to become the No. 1 carrier in Philadelphia and if Southwest executives don't accomplish that, they will consider their efforts a failure.

"I think Southwest is going for the kill in Philadelphia and everything they do is aimed at US Airways," Trippler said. "They are not interested in America West at the moment -- they want the big trophy."

But Mike Boyd, an aviation consultant with the Boyd Group, Evergreen, Colo., said he doesn't expect US Airways to be hurt too dramatically by Southwest because the two carriers serve a different clientele.

"Southwest is trying to build on its current strengths in the market," Boyd said. "They're strong in Las Vegas and Phoenix, strong in Orlando, strong at Midway (Chicago). And, with the exception of Chicago, most of these are low-fare, low return markets. Las Vegas is a tough place to make money in because there's an expectation that fares will be low."

Boyd said many carriers don't have a large presence in the Las Vegas market because it yields such low returns.

US Airways customers would continue to fly the airline to Las Vegas because of the level of service it provides, he said. Southwest, he said, would get a better share of travelers who use low-cost carriers, who may have found their way to Las Vegas less expensively with one-stop flights.

Boyd speculated last month when Southwest made its Philadelphia service announcement that it was more of a pre-emptive strike against low-cost rival JetBlue Airways than an effort to challenge US Airways. He said Southwest was moving to strengthen its position in the Northeast where JetBlue has a dominant presence with a hub and headquarters at New York's John F. Kennedy International Airport.