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Cities Court Southwest Airlines With Billboards, Other Gimmicks

Sun., June 1, 1997

Curious calls began coming in to Southwest Airlines’ reservations centers a few weeks ago. People wanted to know where Southwest is flying in Virginia and why the airline’s advertising is so vague about which of the state’s airports are being served.

Southwest does not fly anywhere in Virginia, at least not yet. But Southwest knew the source of the confusion: The state of Virginia had erected a giant billboard at a major intersection near Southwest’s Love Field headquarters with this message: “Virginia is for LUV-ers.”

LUV is Southwest’s stock symbol, well known in the Dallas-Fort Worth area, and the billboard contained a large painting of a plane in Southwest colors.

Virginia’s billboard is only the latest manifestation of the airline equivalent of a college fraternity rush. Dozens of Eastern states and cities have seen the low fares and new service that Southwest has brought to Baltimore; Providence, R.I.; Nashville; Birmingham; and several Florida cities, and they want a piece of the action.

“I think virtually every city of any size has been in to talk with us,” said Southwest Chairman Herb Kelleher, who, over a quarter of a century, has transformed a small regional airline into a nationwide giant.

Kelleher’s answer to the East is simple: We’re coming. We’re just not saying where yet.

Southwest’s strategy of charging low fares and basing its service at lesser-used airports has driven other major airlines to reconstruct pricing, labor contracts and operational strategies.

Southwest has significantly reduced fares in almost every market it has entered, including Spokane. For instance, a walk-up round-trip fare from Baltimore-Washington International to Chicago costs a maximum of $236, while the walk-up fare on United Airlines at Washington’s National Airport is $1,051.

If a passenger can plan ahead, he or she can get much cheaper advance purchase fares from either airport, down to as little as $136 round trip to Chicago on any airline. But those fares are available for only a few seats on most airlines other than Southwest.

Once a new northeastern route is settled, Kelleher likely will look south again. Service to Jackson, Miss., starts late in the summer. For now, Southwest has no presence in a vast area of the South.

“We’re very interested in the southeastern part of the country,” Kelleher said.

Kelleher said he will not fly to congested or access-controlled airports such as Washington’s National and New York’s La Guardia and John F. Kennedy airports. He added, “We have no intentions of going into the fortress hubs,” including US Airways’ principal hub at Pittsburgh.

Likewise, he said he would not fly into Charlotte, also a US Airways hub, or Atlanta, Delta’s main hub. “We have no intention of serving Atlanta or any of the satellite airports,” he said. “Getting into a battle with Delta at its principal hub is not a good use of our shareholder money,” he said.

Studies have shown that Southwest’s low fares prompt passengers to drive from as far away as 150 miles. Therefore, by flying to Providence, Southwest can compete in Boston, 45 miles away.

Kelleher said Southwest uses a time-tested formula in selecting cities. First, it must have an uncongested airport with no air traffic control problems, supporting Southwest’s fast-turnaround, on-time operation.

Southwest seldom adds more than one new route a year, although the pace picked up somewhat when Kelleher first moved east. Any southern expansion is likely to be incremental.

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