Southwest Airlines will begin services from Newark Liberty International Airport for the first time from today (Monday). The Airport’s records of delays will test Southwest as it flies out of one of the busiest airports in the country to St. Louis and Chicago.
Southwest, known for its budget business model, recently hiked fares to tackle the high aviation fuel prices. The move could affect their strategy of low-cost travel. For the past several months airlines have raised fares repeatedly, Southwest led some of those fare hikes, raising prices five times between December and last month. Measurably Southwest is charging some 20% extra on certain routes as compared to last year.
Southwest is still expected to bring down prices on some flights in the Newark region to cope with Continental, United, Delta and JetBlue. The carrier sold some seats from Newark to its hub at Midway International Airport in Chicago for $197 round trip, matched by competitors for a moment.
Analysts are sure that Southwest’s punctuality in schedule will decrease as it begins operations from Newark. But considering how the airline conquered Baltimore, Philadelphia and Denver it’s hard to imagine Southwest losing ground on the new venture. Southwest begins in small scale and gradually expands without any sudden, large investments like in Philadelphia, were Southwest slowly ate away the market share from US Airways.
To begin with, Southwest will offer eight daily flights out of Newark, but from June 5 it would add service to Phoenix, Baltimore and Houston. The airline already serves LaGuardia International Airport.
Similarly at Denver, Southwest started with less than 20 flights, facing stiff competition from United and Frontier Airlines. Now the Dallas based carrier operates 148 flights at Denver.
In New York, Southwest will be up against the mammoth Continental Airlines, by far the largest carrier at the airport standing tall at Newark and Elizabeth with 71% market share.
Market experts are of the opinion that if Continental’s territory is trespassed, they’ll get back and floor them.
But to all carriers alike, what would be worrying is the flaming prices of aviation fuel which leaped from $70/barrel last year to more than $100/barrel this year. Compared to last year, Southwest’s fuel costs will be $1 billion higher for this year.
Southwest is the largest airline in the United States, based on domestic passengers carried, as of June 30, 2010. As of January 2011, Southwest operates more than 3,100 flights a day, utilizing a fleet of 547 Boeing 737 aircraft.
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