The Southwest Effect

The U.S. Department of Transportation (DOT) has determined that when Southwest Airlines begins serving a new city, a phenomenon occurs. This consistent phenomenon was termed the "Southwest Effect" by DOT officials in a 1993 study. The most noted aspect of the "Southwest Effect" is that the average fare decreases and the number of passengers dramatically increases.

The traffic increases are not all attributable to passengers traveling on Southwest Airlines, however. Airports enjoy significant increases in overall traffic after Southwest "comes to town."

For example, one year after Southwest Airlines opened service between Providence and Baltimore/Washington, average fares between the two cities dropped by 73 percent and passenger traffic soared by 782 percent, with more than a half million people flying this route. In fact, Rhode Island's T.F. Green Airport became the fastest growing airport in 1997 after Southwest started service. Overall airport traffic leaped 88 % during Southwest's first year of service. The growth was so rapid the airport rushed to add 1,000 additional parking spaces a year ahead of schedule.

A recent study completed by the Office of Aviation and International Affairs found that the Southwest Effect still holds true today, despite the post September 11, 2001 decline in air travel. The study, focusing on Southwest's arrival in Philadelphia, proved that not only did fares fall in the majority of shorthaul, mediumhaul, and longhaul markets, but also that the passenger traffic significantly increased in markets served by Southwest. Fares between Philadelphia and both Manchester and Providence fell by more than 80% and ten times more passengers boarded these flights than ever before. Passenger traffic on flights to Los Angeles increased by 69% and the fares were decreased by 36%. Air travelers in Philadelphia paid fares that were 20% above the national before the arrival of Southwest Airlines. Now, those same travelers, less than a year after Southwest entered their market, enjoy fares that fall below the national average.

Other examples of Southwest's positive impact on overall airport traffic:

• Albany International Airport - Boardings at Albany International Airport soared to a record 1.44 million in 2000, up 22.5% over 1999. Southwest began service at the airport in May 2000.
  
  
• Bradley International Airport - Since Southwest began service in 1999 at Bradley, the airport set a new single-month passenger record in March at over 600,000 passengers, up 20.8% March 1999. Bradley reported a record 7.3 million passengers in 2000.
  
  
• Long Island MacArthur Airport - Overall traffic rose 107% in 1999 to almost 160,000 passengers from just over 77,000 passengers. In 1999, the number of passengers traveling from MacArthur rose 133% over 1998.

Southwest also has an incredible effect on the number of travelers between destinations the airline serves. Before Southwest Airlines began service to Hartford, Connecticut, very few people traveled between Hartford and Baltimore. In fact, in the third quarter of 1999, only 19,030 people paid an average one-way fare of $146 to travel from Hartford to Baltimore. Southwest Airlines started service between those two cities on Oct. 31, 1999. By the end of the second quarter of 2000, the number of passengers traveling from Hartford to Baltimore had increased to 91,890, and they were paying an average of $55 each way. Incredibly, that city pair went from being the 1,063th busiest city pair in the nation to being the 248th busiest city pair in the nation.