Southwest Airlines is aiming for a larger slice of the Big Apple, and the corporate travel market, as it launches a slew of new flights from Chicago to Newark next spring and firms plans for onboard Internet service.
Texas-based Southwest said Thursday that it would enter Newark Liberty International Airport March 27, with six daily flights from Midway and two from St. Louis. Southwest also unveiled plans to begin charging a flat $5 per-flight fee for broadband connections.
“This is about suits, not jeans,” said Henry Harteveldt, travel industry analyst with Forrester Research Inc. “They are clearly going after the bread-and-butter of American and Continental/United in this market. They are very much laying down the gauntlet trying to go after the business traveler.”
Southwest isn’t wasting any time in challenging the new United Airlines, which completed its merger with Continental Airlines Oct. 1, on one of its most important routes. But Southwest wouldn’t have been able to enter Newark if the merging carriers hadn’t been prodded by regulators to give Southwest landing slots and gates at the capacity-constrained airport.
Southwest said Thursday that it would begin by selling seats for $72, each way between Chicago and Newark. That’s a savings of about $150, for a round-trip ticket, versus the cheapest Continental, United and American Airlines fares, according to FareCompare.com.
“This is a shot across the bow, no doubt about it,” said aviation consultant Robert Mann, president of R.W. Mann & Co. “New York-Chicago historically has been a huge market.”
Though its roots run deep in the leisure market, Southwest in recent years has made a concerted effort to woo lucrative business travelers away from large network carriers like United.
The low-cost carrier outfitted its gate areas with leather seating and electric outlets for laptops and streamlined its boarding process so that fliers wouldn’t need to camp out hours in advance to claim prime seats.
But until recently, the biggest knock against Southwest was that it didn’t fly to New York’s three major airports, which meant that its business passengers couldn’t quickly get to the nation’s largest financial and media markets.
Southwest ended that talk when it launched flights to LaGuardia in the summer of 2009. The discounter won access to capacity-constrained Newark as a result of a deal United and Continental airlines struck with the Justice Department in late August to gain federal approval for their mega-merger.
Continental agreed to lease slots for 18 round-trip flights to Southwest to satisfy antitrust regulators’ concerns that the merged carrier’s dominating presence — Continental and United operated 442 daily round-trip flights combined — and a scarcity of landing slots would snuff competition at Newark.
Southwest announced the new service during its annual media day festivities in Dallas. The carrier also said it intended to add additional flights to Newark later in the year to reach its initial allotment of 18 flights.
Southwest’s satellite-based Wi-Fi service, provided by Row 44, also appeals to corporate customers looking to check email or polish presentations at 35,000 feet, Mann noted.
Most carriers, to date, have opted for the cheaper, ground-based Wi-Fi provided by Itasca-based Aircell. Unlike Row 44, Aircell controls how its product is priced and has set a sliding scale for its Gogo Inflight Internet service, with fees ranging from $4.95 to $12.95, depending on the length of a flight.
With its flat $5 fee, “Southwest can keep the message simple,” Harteveldt said. “No matter where you are, $5 is a very attractive offer.”
