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What Will Southwest Do With Its LaGuardia Slots?

I didn't mention it here on BNET when it was first announced that Southwest was planning to buy its way into New York's LaGuardia airport, but now that the slot sale has been confirmed, I thought it would be worthwhile to discuss how they might be used. There are a few different ways they could go here.

The first question is whether this is really just a beachhead into a much larger presence in New York. Some think that's the case, and if so, Delta, JetBlue, American, and Continental should be concerned. I tend to think this is highly unlikely. New York is a very competitive market, and its three main airports are operating near capacity. Without an airline failure or an acquisition, Southwest is not going to be able to develop a very large presence.

More likely is that this is just a very important spoke for the airline. Southwest does a great job of getting people in Texas, California, and many other places to just about everywhere they need to go in the US. But when those people need to go to New York, they have to fly someone else unless they want to fly into Islip on Long Island and take the train all the way in to Manhattan. That's just not practical for a business traveler in any way.

So, by going into LaGuardia, Southwest can now fly everyone that is loyal to the airline to the most convenient airport in New York. It can also help the airline to get corporate agreements. Many businesses have such a large business in New York that they need a corporate agreement with someone else for that business. The often precludes Southwest from getting comprehensive corporate business, because the businesses are required to give a certain amount of flying to the contracted airline in order to keep the deal. If Southwest can get people to New York, it enables them to earn more business.

Now the question is, where will they go? Southwest has only acquired slots for 7 roundtrip flights a day, so that's not much with which to work. My guess is that they'll throw all of those into Chicago/Midway where they can then have a very healthy business schedule as well as connections throughout the country. Florida is too much of a leisure market and doesn't allow for connections elsewhere, so that doesn't make sense. A couple of flights to Baltimore might work in that it feeds the rest of the system, but there isn't enough local traffic there to support a big operation.

Houston is always a possibility for a couple flights since that would get people directly into the airline's home state, but there are still restrictions preventing them from flying nonstop from Dallas/Love Field, and Austin and San Antonio are just beyond the 1,500 mile perimeter rule at LaGuardia.

That's right, there's still a rule saying that flights from LaGuardia can't go beyond 1,500 miles except for Denver (which was somehow grandfathered in) and on Saturdays when there is no restriction. For that reason, all of the West is out of the question.

This is clearly all just speculation, but it's very important to watch this. Where Southwest goes will be indicative of their mindset when it comes to serving the New York area in the future.

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