Its overall growth plans may be on hold, but Southwest Airlines Co. said Wednesday it will seek to buy 14 takeoff and landing slots at LaGuardia Airport, representing the low-cost carrier’s first foray into New York City.
The Dallas airline submitted a $7.5 million bid to the Indianapolis bankruptcy court that’s overseeing the sale of assets owned by Southwest’s former business partner, ATA Airlines. The court had said it would auction off the slots.
“It is our intent, with the successful conclusion of the transaction, to make plans to initiate service from LaGuardia,” Gary Kelly, Southwest chairman and chief executive, said in a prepared statement. “Even in this volatile environment, we have said we must monitor the competitive landscape and take advantage of prudent market opportunity.”
Southwest doesn’t have a timetable for when service might begin or which cities will get service to and from LaGuardia. If Southwest wins the auction, the airline can’t take over the slots until ATA’s bankruptcy reorganization is completed.
Service to New York City would allow Southwest, the biggest carrier of domestic passengers, to offer more connecting flights from the biggest business market in the U.S. In particular, it would give Southwest a presence in the city considered the gateway to Europe. Southwest doesn’t fly outside the U.S., but has recently signed code-sharing deals to serve Canada and Mexico.
“We’ve had our eye on the New York market for a long time,” said Southwest spokeswoman Beth Harbin. “We know our customers want this service.” Previously, Southwest had a code-sharing agreement with ATA that allowed customers of one of the airlines to purchase tickets on the partner carrier.
In New York City, Southwest would come head-to-head with major international carriers, albeit in a small way. “The service Southwest will be adding at LaGuardia represents about one gate’s worth of daily flights,” said airline consultant Bob Mann. “The real question is, how do they expand service to around 30 flights per day. After that, look out.”
It’s okay for Southwest to expand slowly, Mann said. “They’ve used their partnership with ATA as a proxy to understand new markets before they begin flying there. This is what they’ve done at LaGuardia, and they’re also poised for growth in Boston and Washington, D.C.”
Although airline passenger traffic worldwide is expected to slow in 2009, a result of the global economic downturn, LaGuardia and other New York City airports remain crowded.
Harbin, the spokeswoman, said Southwest “will find a way” to execute the quick turnaround times that have characterized its flight schedule. “We’ve done it in Philadelphia and San Francisco, which are challenging,” she said.
She said the slots wouldn’t be affected by a plan by the federal government to auction some New York City slots next year.
Earlier this year, Southwest said it would begin service in 2009 to Minneapolis, home base of Northwest Airlines, which recently merged with Delta Air Lines Inc.
But, Harbin said, Southwest won’t need to add to its fleet next year. Rather, as it adds flights to new markets it will eliminate flights in less profitable markets.
