Southwest Airlines Co (NYSE:LUV) will more than double its flights from Ronald Reagan Washington National Airport this year with new nonstop routes to cities including Akron-Canton, Ohio; Indianapolis and Dallas Love Field, it said on Monday.
The carrier also plans to add nonstop flights between Reagan National and Chicago Midway, Houston Hobby, St. Louis and other U.S. airports it serves.
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The new flights came about after Southwest bought takeoff and landing rights that formerly belonged to American Airlines Group at the airport near Washington. American agreed to divest the rights under a deal with the U.S. government that cleared the way for its merger late last year. With the additional access, Southwest will be increasing service at Reagan National to 44 daily departures from 17.
New York-based JetBlue Airways also won takeoff and landing rights, or slots, at Reagan National from American, and said earlier this month it planned flights to markets including Charleston, South Carolina, and Hartford, Connecticut. The U.S. Justice Department stipulated that slots being sold should go to low-fare carriers to boost competition at Reagan National, a popular, gate-restricted airport that serves the political and business communities.
The new flights from Southwest could bring lower fares between Washington and some big U.S. hub cities such as Chicago, said Robert Mann, an airline consultant in Port Washington, New York.
"You've got nonstops in a market like Washington-Chicago where the majority of service is to O'Hare, and it's at a fairly high price so in that sense service to Midway undoubtedly will discipline the O'Hare market," Mann said.
He said Southwest's service between Washington and Love Field would "provide price discipline" in the Dallas market considering that larger carriers like American fly to the D.C. area from Dallas/Fort Worth International Airport.
SMALL CITIES TO LOSE SERVICE
But Michael Boyd, an aviation consultant in Evergreen, Colorado, said the new service from Southwest and JetBlue in Washington will come at the expense of smaller markets that had their flights cut by American as a result of the divestitures. Cities that are losing daily nonstop flights to Washington from American include Savannah and Augusta in Georgia; Tallahassee, Florida; Little Rock, Arkansas, and Omaha, Nebraska.
"It's not going to be a sea change and a huge improvement," Boyd said.
Southwest will add daily service between Reagan National and Chicago Midway; Nashville, Tennessee, and New Orleans on August 10. At the end of September, Southwest plans three more roundtrip flights to Chicago Midway out of Reagan National, as well as two roundtrip flights to and from Tampa Bay, Florida.
In early November, Southwest will start service to Akron-Canton, Dallas Love Field and Indianapolis, and add more nonstop flights between Reagan National and St. Louis and Houston Hobby airport.
American's former parent, AMR Corp, and US Airways Group agreed to give up 52 pairs of takeoff and landing rights, or 104 slots, at Reagan National as well as gates at five other airports to settle an antitrust lawsuit by the U.S. Justice Department seeking to block their merger. The merger was completed in December.
Southwest successfully bid for 54 slots at Reagan National, and it also acquired slots at New York's LaGuardia Airport that American agreed to sell.
Shares of Southwest Airlines rose 0.8 percent to close at $23.37 on the New York Stock Exchange on Monday. Other airlines closed higher, with American Airlines rising 1.9 percent to close at $36.80 and JetBlue up 0.2 percent at $8.53.
(Reporting by Karen Jacobs in Atlanta; editing by Tom Brown and Matthew Lewis)