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Continued: Southwest effect is kicking in at MSP

  • Article by: SUZANNE ZIEGLER , Star Tribune
  • Last update: March 5, 2010 - 9:38 PM

One year later, the "Southwest Effect'' appears to have taken hold in the Twin Cities.

Just before the "no frills, no fees" carrier started flying from the Twin Cities to Chicago's Midway, one-way average air fare was $260 in the third quarter of 2008, according to Department of Transportation statistics. For the same quarter of 2009, statistics show that the average fare dropped more than 60 percent, to $101. And passenger numbers for all carriers on that route jumped 50 percent, to 3,365 per day.

"It's another example of Southwest entering a market: Fares go down and more people travel, so traffic is up," Minneapolis travel expert Terry Trippler said Friday. "I'd say it would be better for other airlines if Southwest was not here. But it's better for consumers that they're here."

But one expert said there's more at play.

"Actually, there's a lot more going on than the 'Southwest Effect' -- airline fares are under pressure enormously due to the recession," said airline analyst Michael Boyd.

One year ago Monday, Dallas-based Southwest began service from one gate at the Humphrey terminal to Midway, its second-busiest hub, offering eight daily flights each way. In May, Southwest added three daily nonstop round-trip flights from Humphrey to Denver and in January, it added two nonstop daily flights to St. Louis.

Southwest's director of market performance, Edward Shelswell-White, said the strategy in Minneapolis-St. Paul was a new one that worked well.

"Instead of trying to come in with a bunch of different flights to a whole bunch of different places the way we have historically done, this was a different type of model for it," he said.

Delta Air Lines, which completed its acquisition of Northwest Airlines late last year, said it welcomes competition in every market it serves.

"No competitor can match the global access or economic impact we bring to Minneapolis-St. Paul," Delta spokesman Kent Landers said. "Minnesota customers have been loyal to us for more than 80 years, and we will continue to compete vigorously for their business."

Boyd agreed, saying that Twin Cities travelers would have less nonstop access and fewer international options without Delta. "Southwest is a great carrier. But it's Delta that connects Minneapolis-St.Paul to the world," he said.

In the Twin Cities-to-Denver market, results were less dramatic than Chicago's. Comparing the same time periods before and after the flights began, one-way fares that had averaged $181 dropped about 30 percent, to $124. Passenger numbers, which include all airlines on that route, also rose 13 percent, to 1,795.

Southwest has been aggressive when it comes to taking on other airlines, growing from scrappy low-fare carrier to the No. 1 airline for domestic travelers. It has muscled its way into numerous markets and its top five airports now are Las Vegas, Midway, Phoenix, Baltimore and Hobby in Houston.

Southwest wouldn't disclose its own passenger numbers for Twin Cities routes, but Shelswell-White said it has done "very well."

Despite that, Southwest does not have plans to add service in the Twin Cities. But, he added: "We are not going to turn a blind eye to MSP. So if there's an opportunity out there, then we may well take advantage of it. But there's nothing on the books at this point."

Boyd said that Delta doesn't have much to worry about.

"For Delta, they still have a stronghold that will remain -- there simply isn't enough market room for Southwest to make a huge change," he said.

Suzanne Ziegler • 612-673-1707

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  • Sizing up the before and after

    Friday March 5, 2010

    MSP to ChicagoBefore Southwest: $260*2,243 passengers** per dayAfter: $1013,365 passengers per day*Fares are one-way averages **Includes passengers on all carriers...

  • The Southwest effect has landed in the Twin Cities.

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