I want to start this out with stating that this is complete rumor-mill at this point; but we’ll have dialogue below that assumes this is true. With that said, I received an email citing an unnamed source had informed him that in order to maintain and build market share, Delta/Northwest will begin lowering fares in November to build a better market base before Southwest begins service in May. Also, there is a good possibility that when the new airport opens, Delta/Northwest may bring in larger aircraft to serve our marketplace.
Hit the read more link to get the scoop.
Boy, that’s just great, huh? Delta/Northwest has been squeezing this market for years and at the first threat of losing what little market share they have, they start talking about lowering rates. Well, better late than never, right?
So, let’s talk about this. The prospect of lower rates has already influenced decisions among travelers. Talking to one of said travelers earlier, “I’m going to wait until the first part of November before I book my late November travel plans to see what happens.” Lower rates are good for everyone right?
This is all part of the coined phrase The Southwest Effect, where among other things, air fare rates will be driven lower as a result of a healthy competitive market. When a competitor of a dominating presence comes into a market, that presence forces other competitors in the area to either buck up or bow down. Sounds like Delta/Northwest is preparing to buck up.
I do think we should note at this point that it was remarked in a comment in one of our recent articles that regardless of how low the competitor airlines go in comparison to Southwest, we should still support Southwest Airlines and use their airline for travel service. If the competing carrier matches or beats Southwest Airlines, commanding a larger market share, they may go away at the end of their three years. If they leave, can you guess who will happily raise their air fares? Delta/Northwest Airlines, you betcha.
22 thoughts on “Southwest May Push Competing Fares Lower at Existing Airport”
Your points are true regarding competition and pricing….however, why hasn’t Southwest served this market before? The airport. Even with the previous airport small and unsatisfactory, Delta has been serving this area for a very long time…..where was Canyon Blue? Sorry, with Southwest only willing to serve you if you have an airport that makes them look good, but Delta serving you no matter what….I’ll stick with Delta. BTW, Delta beats Southwest’s prices in almost every market they compete….low cost carrier….that’s DELTA.
Southwest wasn’t able to serve Panama City previously because of the runway length of the present airport.
Yes… you can land/takeoff the 737’s they fly at the present airport. But they are weight restricted meaning that they couldn’t operate with the full planes SWA needs with their fare model. If you are charging cheaper fares, you need more seats full to make money. Also, SWA does not charge for baggage, making the weight of their planes (seats full, baggage full) on the allowable but heavy side.
Heavier planes need more runway to take off and land. Flying into normal airports with longer runways, this does not pose an issue.
Remember a few years ago when the SWA airplane over-ran the end of the runway in Burbank and ended up parked at a gas station across the street from the airport?
That runway was only 500 feet shorter than PFN, except a plane landing at PFN on runway 32 has no street to end up on. The plane would end up in the bay. (Also, Burbank has a longer runway — 500 feet longer than PFN — for the departure of heavier aircraft).
To those who say that Delta has been loyal: Yes… loyally overcharging you by about 200% to fly in and out of PFN. From many parts of the U.S. you can fly to Belize or Hawaii for the same amount of money Delta wants serving PFN. This despite that fact that they farm out service to ASA (with much lower paid pilots and staff… saving them money). Food for thought.
Right on, Jason! I am so happy to receive pcbdaily automatically by email to keep me up-to-date on the beach news. We can’t wait to fly Southwest!
I will continue with Delta/NWA if they can decide to fly nonstop from chicago
Well, you can be sure that with Southwest that you don’t have to go to Atlanta before you can get to your destination. I have been flying SW for years because I live part time in New Orleans. If you go and sign on for their Visa card you really rack up the round trips fast and they give you coupons for free drinks (if you want them) every time you earn a round trip. Nothing like buying the house a round on the plane with them if you don’t use them. They also don’t charge per bag for your checked luggage. So matter what the others do SW is still the better alternative. Traveling with a family? Its $20 min for your first bag, $30 for your second per person, so its not just about the fare, and, by the way, they are almost all the time “early” getting you to your destination barring weather conditions.
As a community, I hope we are able to reward them both with our business. I hope they make different connections so that we are able to attract more visitors; the amount of business we locals give them is probably a lot less than the amount of business tourists will, so ultimately: Fly with whichever you like, I say.
Great comment Isaac !
We need to support both.
What four desitnations will SW serve?
That will affect my decisions.
Well, with all this, it will all come out in the wash. Southwest will primarily be serving tourists coming to our destination as that is where their marketing efforts (and the TDC’s marketing efforts) will be focused. The reality is that both airlines will have their fair share of business as the consumer will always lean towards the better deal. Competition is good for everyone, and it is something this market hasn’t had enough of in years.
John, they will announce the 4 destinations they will service in December.
Being from Michigan we’ve always had to fly either Delta or Northwest. Our choice was always North West because Delta was always flying a connecting prop plane into Panama City. Couldn’t stand to fly it when a small Jet is available at the same price.
Since the merger of Delta and Northwest still files a couple of flights to Panama City connecting through Memphis using Pinnacle Airlines to get to Panama City, however, the price on these flights are usually double the cost of a Delta flight connecting through Atlanta. No one in their right mind wants to connect through Atlanta but on the other hand there are no extra Pinnacle planes housed in Memphis to take you on to Panama City should the one you are flying have problems. You end up in Memphis for the night.
The customer right now has a choice get stuck in Atlanta because of weather or Memphis because of lack of planes. Pay less and connect through Atlanta or pay less and take your chance in Memphis.
Chances are if I fly Southwest out of Michigan I’ll have 2 layovers before arriving in Panama City. Southwest is known for it’s double connections.
I’ll just have to wait and see if the introduction of Southwest helps provide less expensive air fares to us folks in Michigan without taking us on a trip around the world to get to PCB.
I am glad Southwest is coming to PCB.
But I don’t see any reason to bash Delta/Northwest. They have been our only service for years so don’t blame them for lack of competion in the past. Funny how some want to make them out to be the bad guys for serving PCB when no on else would.
Oh, and they served PCB without getting any cash from St. Joe.
There is always two ways of looking at everything ! 😉
Delta will need to lean on Atlantic Southeast Airlines to improve it’s service, which has been abysmal, then better then back to lousy. The flight attendants are part of the problem and I have seen both good, and so awful that I went ot the VP for FLight Ops to complain. They need to fire the blond german woman who, in my experience, has no clue about customer service, doesn’t care, treats the public like a storm trooper, and is incompetent. They need more folks like Ron, who knows his stuff and has gone out of his way to help. ASA has the worst records on the industry in three major areas, according to the last poll I saw (not on time, lost bags, and something else that I forget). If I make paltinum on Delta again this year, they may keep my business, but if not and ASA (Almost a Scheduled Airline) does not improve, I will be checking out SW.
Isn’t Southwest being paid to fly to PC by our TDC?? Being paid to offer these low fares?? Glad for the additional service options, but Delta has been here through thick & thin…we call that loyalty to the community.
My understanding with the St. Joe, SW strategic alliance was that they would guarantee that SW would “break even” and not show losses for 2 years. There is a big difference between providing assurance of a company reaching “break even point” vs paying them additional $. Therefore, they are not providing additional revenue to the company in order to assist them in offering lower fares. Delta is not loyal. I do not consider overcharging residents for fares just because you have a monopoly and you can, loyalty.
So glad Southwest is coming to our area. Delta needs competition. They have been charging whatever they want to for years. Also, the fuel prices have come down and they are still charging for baggage. I fly with my family several times a year and when you are paying for bags on top of the fare for 4 passengers, it adds up. I am glad Delta has to start competing in our marketplace. You can actually hire a private plane at the Panama City airport, and fly as cheap as getting on Delta and going by their schedule. Look at what the airfare is to ATL out of Pensacola as opposed to Panama City. That is because Air Tran is competing with Delta. It is just what we needed!!!!!
I’ll be flying SW. I don’t understand why some people want to make Delta look like heroes for serving this market when no one else would. They found a highly profitable niche and took advantage of it by overpricing their flights. Now that there’s competition, they have to charge fair prices. Tell me again how this makes Delta the good guys?
Maybe if St.Joe & the TDC had offered some compensation to Delta to offset their costs we would have had cheaper fares a long time ago. They are not the good guys, they are the only guys that wanted to serve PC!
I’m a platinum on delta. If they are close to their competitors’ price I will likely continue to fly them just to keep earning points. However, I normally fly out of Montgomery and ALWAYS have to fly through Atlanta…I thought ASA stood for Always Stuck in Atlanta. It’s great that SWA will bring competition and travel options. I do think it fair and wise for St Joe to provide a short term incentive to help SWA intiatiate service especially in the current economy. Both airlines will help PCB but each will do their business analysis to set fares. Were they have a sole geographic presence they’ll charge more. Where they compete head to head, they’ll lower prices. It’s just business…and the consumer will likely buy the cheapest ticket…as we always do.
Great article on the “Southwest Effect”. If you can’t click on it, just copy the following URL to the Address bar of your internet explorer.
I agree completely with Jason that you should give Southwest your business even if Delta happens to be a couple of dollars cheaper. Delta is sure to lower its prices for the next couple of years since they know the Southwest deal is being subsidised by St. Joe for a couple of years.
Before you buy your next Delta ticket later this year or next year, remember what you paid for your last Delta ticket. Based on how much $$$ you saved due to the “Southwest Effect”, you can easily justify buying the Southwest ticket even if it happens to be a couple dollars more.
St. Joe didn’t offer to help out the current airlines who serve us because they didn’t have anything to gain from it. They want to sell their land around the new airport, so NOW that it is going to be beneficial for them they will step up to the plate. When they get the deals on their land in the next two years they will pull back the incentive and people who buy thinking they have a low cost carrier might be left sitting high and dry!!! There’ll be lots of advertising of the land that will use the airport and low cost carrier as an incentive to buy here, but will there be anything in the advertising that warns these buyers that the low cost carrier could very well disappear in 2 years? I don’t think so, do you? Oh, well, just another case of “Let the buyer beware!”
I live in Atlanta. SW was going to come here, but they didn’t. They lost out. So to fly them I have to drive 3 hours to BHM. I ain’t doing that! I will fly Delta. They give me a seat when I book, so I know where I sit. I love them!
Now maybe Airtran will fly there and compete. Then I would fly Airtran!
Competition is great for business – strong competition is a blessing.