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Southwest Triggers Turf War And Lower Prices By Landing In Boston

August 24, 2009 at 8:59 AM | by Omri | 0 Comments

Southwest began flying out of Boston-Logan last Sunday, a move that their CEO once declared would never ever happen. Nonetheless, we weren't particularly surprised: we flagged the expansion back in April when they announced their routes, and again a few weeks ago when AirTran gave them a "welcome to Boston" by announcing free WiFi for Boston flights.

What is much more interesting is what the move means for the LCC niche and the airline industry as a whole, two different markets that are increasingly difficult to untangle.

The Wall Street Journal just published a must-read article on the industry, taking Southwest's expansion as the centerpiece and moving on from there:

Logan’s transformation coincides with a major shift in the airline industry. Discount carriers once favored secondary, suburban airports that were cheaper and easier to serve. Customers were willing to drive farther for lower airfare. But cheap fares have become the norm, not the exception. As discounters have grown... incumbent airlines have to match prices and live off discount airfares on most domestic routes.

We'd add that this is also increasingly true not just for specific foreign markets—Europe has long been an LCC playground—but also for the broader international market. Malaysia's gigantic AirAsia X, an LCC known to brag about its own awesomeness, just announced flights from Kuala Lumpur to Abu Dhabi starting November. The new route will finally allow them to take customers from Southeast Asia to one of the Middle East's chief travel hubs.

Back to BOS: Southwest's entrance has introduced all kinds of delicious turf war dynamics to the airport. AirTran knew what they were doing with the free WiFi. They're now competing head-to-head for airport hubs like BWI and Milwaukee, which all but guarantees future deals. JetBlue responded by adding a $39 Boston-Baltimore route right after Southwest launched theirs. Downward pressure is a beautiful, beautiful thing.

[Photo: flygraphix / Flickr CC]

Related Stories:
· Southwest Lands at Logan, Bringing Low Fares Mainstream [WSJ]
· LCCs Coverage [Jaunted]
· Southwest Coverage [Jaunted]

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