Southwest Airlines is going to start flying to Miami and to Palm Springs, adding two destinations to their route map.
Miami is, I think, the interesting one. They haven’t announced where they’ll fly but it’ll likely be several destinations. There’s more opportunity to grow in Miami than Palm Springs.
What makes Miami surprising is that it’s the type of market the ‘old Southwest’ would never have entered. They already have a huge operation in Fort Lauderdale, and a smaller one at West Palm Beach and while they aren’t exactly the same markets there’s huge overlap. Southwest always favored the less expensive airports, and avoided congested business hubs.
That changed after the AirTran acquisition when they got major positions at big, expensive Northeast airports although this didn’t always work out well for them (see, for instance, New York).
Miami is one of the more expensive airports to operate from in the U.S. This was, if not an explicit policy of pre-merger American Airlines to drive up airport costs, something that their management sat by and was ok with happening – because it chased all the low cost carriers to Fort Lauderdale. Miami was expensive, but it was all theirs.
Delta had to come into Miami to support its LATAM partnership – feed that American had previously provided when the South American carrier was part of oneworld. Now we’re getting Southwest looking to expand there too.
Miami is important for American because of its Latin route network, and Florida travel is ‘hot’ right now (to the extent any markets are). But it’ll be interesting to see whether American can defend it in the long term. They announced new service in response to Delta back in the fall but at some point additional capacity will mean less full flights and lower fares and American will exit Covid in the weakest financial position of the major carriers.
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