Southwest Coming To O'Hare

Southwest just yesterday tweeted that they would begin to fly to O’Hare Airport in 2021. This would add to the services they have had for several years at Midway Airport. Below you can see their tweet:

Southwest has a giant presence at Midway. According to the latest statistics from the US Department of Transportation Southwest had a share of 96% of all passengers at Midway over the period of July 2019 to June 2020. In fact Southwest’s share at Midway is the highest share that any airline has in any of the 50 busiest airports in the United States. American and United have not flown to Midway for years and Delta just had a few flights pre-Covid to Atlanta and Detroit. Competition comes from O’Hare where both American and United have hubs so Southwest is somewhat limited in what they can charge in ticket prices.

If Southwest is so dominant then one wonders why would they want to have flights to O’Hare too. Southwest in the last few years has been pushing into several new markets where they have not flown before. The tweet mentions Houston but they also have announced new service to major airports like Miami and have been adding new cities in California like Palm Springs. With this, they will serve all the 10 busiest airports in California. Whereas most other airlines have been cutting destinations in 2020 Southwest has been adding destinations. Their goal in all of this seems to be a little bit like Walmart’s: trying to serve all cities / airports that have a decent size. Because of the pandemic it should be easier to steal market share from competitors and get additional gates.

Some say that Southwest will add competition to O’Hare and this would result in lower prices. In my experience Southwest really isn’t that much cheaper than other airlines like American and United. You do get benefits like free baggage but you pay indirectly for that benefit with the price of the ticket. The two airlines driving down the price of airline tickets at O’Hare the most are Spirit and Frontier. With these two airlines you pay for all the extras and the seat pitch is tight resulting in lower costs and ticket prices. Destinations to smaller airports where tickets are expensive like Northwest Arkansas or Huntsville, AL will remain expensive because Southwest will never fly to these airports in the foreseeable future.