Expansion continues
Meanwhile, Southwest has been adding flights.
In January, Southwest begins service to Denver, the 62ndcity it will serve. In 2004, it added Philadelphia.
This year, it moved into Pittsburgh. It also expanded rapidly in Chicago after taking over six of ATA Airlines' gates after that carrier entered bankruptcy. That gave Southwest 25 of Midway's 47 gates. It has grown to nearly 200 flights daily from the South Side airport, and it accounts for about 65 percent of Midway's traffic.
Some of the airline's recent moves have been defensive, like a chess player who focuses on not letting an opponent gain any advantage.
"Philly had four open gates, and they jumped in to keep JetBlue out," said analyst Mike Boyd. "Then, to make Philly work, you've got to have Pittsburgh, because Pittsburgh-Philly is a core market. I think Denver was more of a necessity rather than a grand move to move into a new market. They had to come because it's a big market and offers the potential for more traffic."
Expansion at Chicago occurred when AirTran gained the rights to gates opened by the bankruptcy of ATA. Southwest jumped in to trump AirTran. It apparently didn't want to have a growing competitor at Midway.
"Southwest has to expand rapidly to cover its higher costs," Boyd said. "Their model to stay viable means you have to fly a whole lot more seats."
But Kelly said the airline's growth hasn't been haphazard. It has been driven by an effort to fill in places on the map and take advantage of opportunities.
"We have a point-to-point route system, and a shorter haul orientation than most airlines do, which defined how we would grow," he said.
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