Southwest Airlines Will Add Second New York City Airport With Newark Slots
Southwest Airlines Co. will add a second New York City-area airport, New Jersey's Newark, under an agreement to lease space for 18 daily round trips from merger partners Continental Airlines Inc. and United Airlines.
Flights would start in March, with a full schedule in place by June, according to a statement today from Southwest, the largest discount carrier. The plan is contingent on Continental and United closing their merger by Nov. 30 and on U.S. approval.
The accord lets Southwest achieve its goal of expanding in New York after failing to obtain room for more than eight daily flights at LaGuardia. The regional footprint of Houston-based Continental and UAL Corp.'s United would shrink as federal regulators assess their pending tie-up.
"This gives Southwest a foothold on both sides of the Hudson River," said Bob Mann, a former American Airlines executive who runs consultant R.W. Mann & Co. in Port Washington, New York. "Those are both high-revenue, high- spending markets, and business in New York fans out in all directions."
Southwest, based in Dallas, said it hasn't determined what cities it will serve from Newark or the timing of those routes.
Mann said the 18 round trips give Southwest a "critical mass" at Newark, and said the carrier's low-fare strategy will be a "price depressant" in markets where the airline overlaps with competitors.
Continental and its regional partners account for almost 64 percent of passengers at Newark. Continental and United now operate 442 daily round trips into and out of Newark, and said they plan to continue service to all destinations.
Continental and Chicago-based United announced on May 3 that the two carriers would merge, a process they expect to complete by year's end. The combined airline will be the world's biggest, surpassing Delta Air Lines Inc.
To contact the reporters on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net;Mary Jane Credeur in Atlanta
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