One of the markets I’ve found interesting of late is Boston- Philadelphia. This graph compared the fourth quarter of 2009 (the last full quarter before Southwest announced service) with the same period a year later. It’s pretty interesting, especially the top 50% of fares. Previously a big range of those were seen in the market, but that wasn’t the case once Southwest came in.

I’m hoping to do more analysis like this in the near future, and take a look to see if a similar effect has been seen in other markets where Southwest entered. Also, Southwest ended up cutting the Boston- Philly route, so it’d be interesting to take a look at this market a bit further to see how it developed for them.

It’s worth pointing out a couple of things about the data I used. First, fares under $50 are excluded in an attempt to exclude fares that are just taxes and fees (like award tickets). Also, fares listed aren’t considered credible in the DB1B Ticket database are excluded. There were also a few fares over $600 in both periods, but I just cut off the x-axis there for purely aesthetic reasons.

The airline said in its application that its frequency of service in the Austin- Cancun market will vary from four times per week to daily with a proposed start date of May 25. The proposed Denver-Cancun service would be slated to launch around April 16, with daily service during the December-to-June high season, and would fly “several times a week during the off- peak period.” The company noted for both markets, however, that the exact schedule depends on “demand and market conditions.”

The bilateral agreement between the US and Mexico limits the number of carriers that can operate on Mexican routes (in many cases the number of US carriers is capped at three), but the airline notes in its filing that designations are available. One designation is available for Denver-Cancun service, as only United and Frontier currently have the authority to fly between the two cities.

Sun Country and Continental have the authority to fly between Austin and Cancun. Delta has flown on the route in the past, but notified the DOT last month that it had ceased service and had “no objection to the withdrawal of its own-metal designation on these routes.”

The new seats bring some new features that should be nice for customers, including more space for bags underneath seats a fixed-wing headset that looks much more comfortable than Southwest’s current seat. The new seats also feature less recline. That change might not be popular with everyone, but as someone who is sick of having people recline and restrict my laptop usage I welcome this move! Here’s a handy diagram of the seat:

The upgrade also entails an increase in seat count from 137 to 143 seats. While the airline says this move “provides the unique opportunity of greater revenue potential,” the additional seats should also put some downward pressure on cost per available seat mile (CASM), in my opinion.

“[I]t was never our objective to add a row of seats, and the extra row isn’t the main reason for this redesign. Once we examined how much space would be saved, it was determined we could accommodate the increase, without sacrificing comfort,” said Executive Vice President and Chief Commercial Officer Bob Jordan in a post on the airline’s blog.

Jordan added that “we hope to start making those additional seats for sale on southwest.com here by the end of the first quarter, for travel in the second quarter.”

Southwest says it will begin retrofitting its fleet of over 370 737-700 aircraft this March and will complete the modification next year. In addition, the airline said it “anticipates that AirTran’s Boeing -700s and 717s will also be retrofitted with the new cabin interior as those aircraft are converted into the Southwest brand over the next several years,” suggesting that the AirTran brand is here to stay for quite awhile.

The airline also noted that “Other Southwest fleet types are still being evaluated for a possible retrofit.”

Granted, this change was only announced earlier today but at first blush I really like this move. I’ll be flying Southwest for a trip this summer, so hopefully I’ll luck out and fly on one of the retrofitted -700s!

The move comes after Delta notified the Department of Transportation (DOT) that it would be suspending regional jet service between DCA and Jackson, Mississippi (the slots for the service were awarded in 2004). After Delta’s notification to the DOT, US Airways proposed in a filing to operate Washington – Jackson service “until such time as the Department reallocates the two slot exemptions.”

Southwest then chimed in, saying that it “has no objection to US Airways’ application for interim service in that market,” but it also plans to “submit an application in the reallocation proceeding that will generate far greater public benefits than US Airways’ small aircraft service in the DCA-JAN market.”

“[T]o allow US Airways to obtain slot exemptions on a permanent basis – and thereby increase its already dominant share of DCA slot holdings – would fly in the face of the Department’s recent decision on the Delta/US Airways ‘slot-swap’ requiring those carriers to give up DCA slots in order to preserve competition,” Southwest added.

This move isn’t enitrely shocking considering Southwest’s participation in (and subsequent loss of) the slot swap auction. While only a single slot pair is up for grabs, it will still be interesting to see if Southwest can grab it to bolster AirTran’s existing service at National.

For example, here’s a (heavily cropped to save save) screenshot of the AirTran website taken last night showing an ATL-LAX and LAX-ATL flight that are still listed but not bookable:

If one looks at the Southwest website, the timing of the new flight is nearly identical to the old AirTran flight:

Essentially, it looks like one of the four AirTran flights in the market is being replaced with Soutwhest.

Anyway, Southwest starts its own service to Atlanta next month with flights to Austin, Baltimore, Chicago, Denver, and Houston.

The commencement of service will coincide with the termination of service by USA3000 on these routes on or about January 30, 2012. Frontier has entered into an agreement with Apple Vacations to replace Apple Vacations’ current allocation of seats on USA3000′s flights on these routes.

This sounds like a great plan for Frontier, right? The airline can launch some new service in partnership with a well-known travel company, which can provide some nice additional revenue. Unfortunately for Frontier, Southwest has thrown a bit of a wrench in this idea and can potentially prevent Frontier from flying between O’Hare and Cancun.

Southwest can do this because of the current bilateral between the US and Mexico, which in many cases allows three carriers of each country to serve a market. Currently three carriers are allowed to fly between Chicago and Cancun: American, United, and USA3000. The end of USA3000′s service creates an opening for only one carrier, and now Southwest is proposing that its AirTran subsidiary fly to Cancun from Midway with daily year-round service. (Southwest/AirTran did not have any objection to Frontier’s desire to fly to Puerto Vallarta and Cabo.)

Southwest’s sums up its reasoning for why it should get the slots instead pretty well in this paragraph found in a DOT filing:

Because Frontier has no meaningful presence at Chicago, no existing base of Chicago customers, and no feed support for ORD service, it would provide virtually no public benefits beyond the local Cancun market. AirTran/Southwest, on the other hand, with its huge network at Chicago Midway connecting to dozens of cities, will unquestionably be able to generate large amounts of traffic to support MDW – Cancun service as well as to leverage this valuable U.S. authority to the benefit of a large number of communities beyond Chicago.

Frontier has submitted a response, and it’s certainly an interesting read. For example, take a look at this bit (emphasis mine):

With its usual modesty, mega-carrier AirTran/Southwest would have the Department believe that only it could provide substantial public benefits to the traveling public with the third U.S.-carrier designation for the Chicago-Cancun route. However, close scrutiny of the market and the competing applications reveals the fallacy of that position and demonstrates the superiority of Frontier’s O’Hare-Cancun service proposal.

Frontier makes multiple arguments in support of its bid, including that it will be the only carrier going head-to-head against United and American at O’Hare, that it will be using larger aircraft in the route (A320 vs. 737-700), and it will launch service earlier than AirTran.

What I found most interesting is how Frontier tries to use one of Southwest/AirTran’s arguments to show that they don’t understand the Chicago-Cancun market. Here’s what Southwest/AirTran argued:

AirTran explicitly proposes in its application to provide year-round daily service between MDW and CUN. In contrast, Frontier’s application states only that it will operate service between Chicago and Cancun “up to seven times per week,” which clearly suggests that its service will be less than daily for at least part of the year….In addition, while Frontier’s application states that it plans to provide service on a “year-round” basis, Frontier has operated almost all of its current Cancun services on a seasonal (less than year-round) basis. For example, Frontier operates seasonal service in the IND-CUN and SLC-CUN markets (October through April), MKE-CUN (December to April), and MCI-CUN (October to August).

Frontier then argues that what AirTran thinks is an asset of its application is actually a weakness:

AirTran mistakenly believes that it has found an important deficiency with Frontier’s proposal, pointing out that Frontier’s service proposal was for “up to 7 flights weekly” as compared to AirTran’s proposal for daily service. But, that point actually supports Frontier’s application because it underscores AirTran’s lack of understanding of this Mexican beach market.

Frontier continues:

Moreover, it is ironic that AirTran/Southwest would try to make an issue about Frontier’s realistic, year-round schedule proposal given that (i) AirTran only operates 5 times weekly to Cancun from AirTran/Southwest’s Baltimore hub during September/October, (ii) AirTran flies only once per week from Milwaukee to Cancun, and (iii) Southwest has never operated any scheduled service to Mexico.

It’ll be interesting to see how this one turns out for either carrier. Routes like these seem like a great opportunity for Frontier, and of course it’s fun to watch Southwest make moves to build up international service.

Below is a comparison of Southwest’s two latest order book updates, announced today and before along with its third quarter earnings announcement in October. Of special note is the fact that Southwest’s total firm orders for the 737-800 have more than doubled to 73 aircraft. (Southwest also has five leased 737-800s coming next year, but that isn’t new.)

And, for the sake of completeness, here is the latest delivery schedule with the MAX as well:

These tables only have firm orders listed, but you can see the number of options in the press releases linked to earlier in the post.

The airline announced today it has ordered 150 MAX aircraft, noting it “has flexibility to accept MAX 7 or MAX 8 deliveries.” In addition, it has ordered 58 current-generation 737s, bringing its total firm orders of members of that family to 200. The order appears to be made with capacity discipline in mind, as the new aircraft “are intended to predominately serve as replacement aircraft as the airline continues the modernization of its fleet.” In addition to its firm orders, Southwest also plans to take delivery of five leased 737-800s next year.

First, I’m not sure if I would classify these AirTran flights as “new.” A quick check of DOT data would indicate that AirTran has flown all of these transcons at some point this year. (The same goes for the New Orleans service announced last week.)

That said, I wanted to do some more digging into the transcon schedules, especially since Southwest already flies from Baltimore to Los Angeles and Seattle:

First, I’m very interested in seeing the two redeye flights (one from Seattle, one from San Francisco). AirTran, of course, is no stranger to redeyes, but it’s something that Southwest hasn’t done before. I wonder if we’ll see more of this type of flying in the future.

I’m also interested in the timing of the AirTran flights. In some cases (like the two SEA-BWI departures), the AirTran flights seem to complement and round out Southwest’s schedule quite nicely. In other cases – like the dual 8:45am BWI-SEA departures – I’m scratching my head a bit. Of course, I realize that the networks still aren’t really integrated and Southwest and AirTran still have their own websites for booking, but it still confused me a bit.

This comes after a similar announcement in August. If we combine those two announcements, here’s the complete list:

• Asheville
• Atlantic City
• Bloomington
• Charleson (West Virginia)
• Knoxville
• Miami
• Newport News/Williamsburg
• Quad City/Moline
• Washington-Dulles (Southwest’s IAD flights aren’t affected)

The interesting thing about this list is that they are mainly smaller markets. Miami and Washington aren’t small cities, of course, but they are some of the smallest stations in AirTran’s network. The largest operation to be cut so far is  Newport News/Williamsburg, and I would guess the station is being closed due to Southwest’s nearby presemce at Norfolk.

I’ve been wondering what would happen to the smaller cities in the AirTran for awhile. It was a topic that Southwest CEO Gary Kelly brought up when the deal was announced over a year ago:

The other thing that they do that’s a little different from Southwest that we’ve been interested in is they serve communities that are smaller than what we have on the Southwest route map. So that will also fit in very well with our desire to continue growing our route map here domestically.

It appears that so far, some of the small cities are not seen to fit in to the combined network of Southwest and AirTran. There are still a good number of small AirTran markets – like Harrisburg, Wichita, Lexington, and Hunstville – that still have service, and it will be interesting to see how these markets change and develop in the coming months and years as the integration process between the two airlines continues.