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.
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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.