Journal of Air Transport Management 7 (2001) 251–258

The ‘‘Southwest Effect’’ in multi-airport regions

Timothy M. Vowles*
Department of Geography, University of Denver, Boettcher Center West, 2050 East Iliff Avenue, Denver, CO 80208-0183, USA

Abstract

The ‘‘Southwest Effect’’ is a well-known phenomenon within the airline industry where markets that Southwest Airlines enter see
an increase in traffic and a decrease in average airfares. This paper examines the role of Southwest Airlines in altering fares and
passenger traffic and the Southwest Effect at airports in multi-airport regions. A comparison between Southwest-served routes and
non-Southwest-served competing routes shows that the elements of the Southwest Effect are present even in those markets not
served by Southwest. Southwest-served multi-airport regions studied include Chicago, Washington, DC/Baltimore, Houston, and
south Florida. r 2001 Elsevier Science Ltd. All rights reserved.

Keywords: Southwest Airlines; Multi-airport regions; Southwest effect

1. Introduction the outlying location attracting even more business

away from the downtown area. This downward spiral
Previous research (Anonymous, 1998; Windle and has led to the economic decline of a number of small
Dresner, 1995; Windle et al., 1996; Southwest Airlines, communities’ downtown areas.
1999) has defined the ‘‘Southwest Effect’’ as the increase The Wal-Mart Effect in this case will be the ability of
in enplanements and the decrease in average fares at Southwest Airlines to not only alter service and pricing
airports that Southwest serves as well as on the specific patterns at the airports it serves but also at airports in
markets that Southwest enters. In this paper, a new surrounding areas. As in the case with Wal-Mart,
component to the Southwest Effect will be examined. Southwest’s low fare service is expected to bleed traffic
Not only does Southwest affect the airport that it from surrounding airports. This traffic bleed will then
chooses to serve, but also those airports within close lead to a spiral of increased fares, so that carriers still
proximity to either the origins and/or destinations that serving the non-Southwest airports can cover costs, and
the carrier does serve; this is known as the commuting declining service as Southwest increases its presence in
phenomenon or the ‘‘Wal-Mart Effect’’. the region. The objective of this paper is to examine this
In retail, the Wal-Mart Effect is the phenomena seen second Southwest Effect in multi-airport regions. The
when Wal-Mart enters a small town and begins following list shows the multi-airport regions that are
operation. The retailer generally opens stores in smaller examined in this work:
towns on the fringe of the community. The company is
able to offer name brand goods at lower prices than 1. Miami, Fort Lauderdale, West Palm Beach.
local retailers due to its size. Eventually the retailer 2. Washington, DC, Baltimore.
attracts a majority of the community’s retail business 3. Chicago O’Hare, Chicago Midway.
because of its lower prices and name brand goods. The 4. Houston Intercontinental, Houston Hobby.
effect on the downtown retailers in these communities is
usually devastating. Retail business begins to decline in Other multi-airport regions such as Los Angeles and
not only competing retail types but also in non- the San Francisco Bay Area are not included because
competing retail types because as more traffic is Southwest offers or offered service, as in the case of San
attracted to Wal-Mart, other Big Box retailers move to Francisco, to all the airports in these regions.
Cohas et al. (1995) furthered research in the field of
*Tel.: +1-303-871-2513; fax: +1-303-871-2201. passenger traffic modeling by looking at relative changes
E-mail address: tvowles@du.edu (T.M. Vowles). in airline fares and service frequencies in multi-airport

0969-6997/01/$ - see front matter r 2001 Elsevier Science Ltd. All rights reserved.
PII: S 0 9 6 9 - 6 9 9 7 ( 0 1 ) 0 0 0 1 3 - 8
252 T.M. Vowles / Journal of Air Transport Management 7 (2001) 251–258

regions. They treated access time and population of the first group, consisting entirely of Southwest-
distributions as fixed and instead focused upon fre- served routes, shows that the changes between South-
quency and pricing at competing airports as the central west entry are statistically significant. These results are
focus of their work. The results showed that market shown in Table 3. The second group consisting of those
forces play a part in the determination of market share, routes in competition with Southwest-served routes in
even more so than the traffic generated by an airport’s multi-airport regions were also tested using a paired
catchment area. Cohas et al., concluded their research samples test. The results, shown in Table 4, show that
by offering suggestions to the smaller airports in a the difference in fares are statistically significant between
specific region on how to retain and even increase their the two time periods while the difference in passengers is
market share. Suggestions ranged from modification in not statistically significant. This non-significance may be
service frequency from the larger airports to advertising interpreted to mean that Southwest is not attracting as
the increased convenience, shorter walks to the gate and many passengers away from other carriers in these
lower fares, which are often found at smaller airports competing routes but instead attracting passengers from
within a metropolitan region. routes that it is in direct competition with other carriers
Southwest’s effect in multi-airport regions, specifically and also attracting entirely new passengers to these
in the Washington, DC area, is observed by Mc Kenna markets.
(1996) and Phillips (1996). Mc Kenna’s efforts concen-
trated on other carriers’ responses, specifically US
Airways, to Southwest’s beginning service in Florida
and increasing presence at Baltimore, a US Airways hub 3. Baltimore
at the time. Phillips focus was on the effect Southwest
had on increasing traffic at Baltimore and the associated Baltimore had service inaugurated by Southwest to
growth at the airport overall for all carriers providing Chicago Midway in the third quarter of 1993. Prior to
service. entry Chicago O’Hare was by far the gateway in the
market with 7656 passengers and an average fare of
$156.35. Chicago Midway was a far distant second with
2. Southwest-served airport to a Southwest-served only 552 passengers the quarter prior to entry. After
multi-airport region Southwest was in the market for a year Chicago O’Hare
was still the leader in terms of traffic with 13,327
To look at the changes in the markets studied fares passengersFa 74% increase. Chicago Midway however
and passenger data were collected for the quarter prior had grown even more, 1855%, to 10,790 passengers. The
to Southwest entry in a market as well as a year later. A reason for this growth is quite simple, lower average
quick examination of the overall changes that occurred fares at both airports. At Chicago Midway the average
in Southwest-served airports to Southwest-served multi- fare fell 61% to $46.90, thanks to Southwest’s price
airport regions shows three important trends. Of the 47 leadership. The carriers at Chicago O’Hare knew they
markets that fit this criteria, six saw fare increases would lose passengers so they lowered their average fare
although none were directly served by Southwest. in the market 59% to $63.35.
Seventeen markets saw a decrease in passengers but The biggest loser in this multi-airport market was
once again none were Southwest-served markets. Five Washington Dulles. Service from both Chicago O’Hare
markets saw a decrease in passengers and increases in and Chicago Midway saw a decrease in passengers after
fares although none were Southwest-served markets. Southwest entered the market. The Chicago Mid-
This quick examination shows that Southwest not way–Washington Dulles market decreased from 148
only lowers the fares in the markets they serve but also to 57 passengers and enplanements in the Chicago
in competing markets that include multi-airport regions. O’Hare–Washington Dulles route fell 59% from 4326
In all, 36 markets saw a reduction in fares once passengers to 1767.
Southwest began serving an airport in the region. An Passengers traveling between Washington Reagan
airport-by-airport examination will demonstrate this to Nationaland either Chicago Midway or Chicago O’Hare
be true. Table 1 shows the markets included in the study. benefited from Southwest entering the Chicago Mid-
To test the statistical significance of the changes in way–Baltimore market. Traffic numbers on the Chicago
average fares and enplanement numbers a paired Midway–Washington Reagan National route increased
samples test was utilized. This test is used to test if the 57% from 1353 to 2125 while average fares decreased
means of the two measures are different. The test results, 33% from $107.85 to $71.76. On the Chicago O’Hare–
shown in Table 2, show that the changes between the Washington Reagan National route, the average fare
two time periods are statistically significant. The data decreased 57% from %185.60 to $80.05. Traffic however
was then broken into two smaller groups and a paired only increased 4% from 19,275 to 20,114. This increase
samples test was conducted on each group. The results however was enough of an increase to keep the route the
 T.M. Vowles / Journal of Air Transport Management 7 (2001) 251–258 253

most popular of the six possible ones in this dual multi- 5. Columbus
airport region.
Southwest’s entry into the Columbus–Chicago
market allowed Chicago Midway to replace Chicago
4. Cleveland O’Hare as the gateway to Chicago. Prior to Southwest
entry, the Columbus–Chicago O’Hare market saw 5370
Southwest began serving the Cleveland–Washington, passengers with an average fare of $116. Chicago
DC/Baltimore area with service to Baltimore in the third Midway was a distant second with 1166 passengers
quarter of 1993. Prior to Southwest entry Baltimore had and an average fare of $113.21. After Southwest entered
the highest average fare of the three area airports with the market, Chicago Midway saw a 641% increase in
an average fare of $172.65; Washington Reagan traffic to 8642 while Chicago O’Hare saw a nearly 21%
National was next with an average fare of $150.94 and decrease in traffic to 4252. Average fares also dropped
Washington Dulles had the lowest fare at $139.96. A more drastically at Chicago Midway falling by 67% at
year after entry the average price in the Cleveland– Chicago Midway to $37.10 while fares at Chicago
Baltimore market had plummeted over 82% to $30.45. O’Hare fell by 23% to $89.44. This change in the
The other airports also saw significant decreases in Chicago airports can be attributed to Southwest’s low
average prices with Cleveland–Washington Reagan fares and their all jet service while the two carriers
National’s average fare falling by 45% to $82.33 and serving O’Hare, American and United had a mix of jet
Cleveland–Washington Dulles’ average fare dropping and turboprop service. Chicago Midway was also helped
by 28% to $100.74. While all the markets saw a by the presence of America West, another low fare
significant decrease in average fares, only the route that carrier, in the market.
Southwest served, Cleveland–Baltimore, saw an increase
in passengers during this time. The number of passen-
gers in the Cleveland–Baltimore market increased by 6. Jackson
869% from 1624 to 15,730. Travelers in the other
two markets decreased approximately by 15%. This is Jackson, Mississippi, had inaugural service by South-
a prime example of Southwest’s ability to bleed west into three separate multi-airport regions during the
traffic from other airports in a region by lowering fares. third quarter of 1997. In all the three of the regions, the
While it is not surprising that the traffic number at Southwest-served airports saw significant decreases in
Washington Dulles declined because it is the roughly the average fares and an increase in passengers. The results
same distance from Washington, DC as is Baltimore. for service to the other airports were not as positive.
The decline at Washington Reagan National is Prior to Southwest entering the Jackson–Houston
more surprising. The decline can be attributed though Hobby market, the average fare in the market was
to slot constraints at the airport, limiting the availability $146.10 with 72 passengers in the market. Basically there
of low fare carrier to enter the market and the was no service between Jackson and Houston Hobby.
financial difficulties of Continental and US Airways The competing and major airport in Houston is
during this time period. Houston Bush Intercontinental. During this time
Growth in the Cleveland–Chicago market focused Jackson–Houston Bush Intercontinental had an average
upon Chicago Midway during 1992 and 1993. Prior to fare of $166.24 and 636 passengers. A year after
Southwest’s entry the average fares in the market were Southwest entry, the number of passengers using
$119.81 to Chicago Midway and $142.55 to Chicago Houston Hobby increased by 2681% to 2002 and the
O’Hare. Chicago O’Hare was the overwhelming airport average fare decreased by 61% to $57.60 while at
of choice in Chicago with 9097 passengers the quarter Houston Bush Intercontinental, the average fare also
prior to Southwest entry while Chicago Midway saw dropped by 47%, but so did the number of passengers,
1031 passengers during the same time period. A year by 13% to 554. Southwest had captured some of the
after Southwest entry, Chicago O’Hare was still the Houston Bush Intercontinental traffic along with creat-
airport of choice with 9119 passengers, only a 0.24% ing a new demand in the market.
increase. On the other hand, Cleveland–Chicago Mid- The Houston scenario is replayed in the Chicago area.
way saw a 583% increase in passenger traffic to 7046 Prior to Southwest entry, Jackson–Chicago Midway
passengers. Southwest’s entry also led to a decrease in had only 24 passengers with an average fare of $105.30.
fares at both Chicago airports. Average fares in the Almost all of the traffic used Chicago O’Hare, which
Cleveland–Chicago O’Hare market dropped nearly by had an average fare of $166.46 and saw 943 passengers
57% to $61.45 while average fares in the Cleveland– the quarter prior to Southwest entry. A year later, the
Chicago Midway market fell by 67% to $39.15. This is average fare at Chicago O’Hare had fallen by 22% to
another example of Southwest entry affecting fares at $129.89 while the number of passengers using Chicago
airports they do not serve. O’Hare from Jackson had fallen from 255 to 706
254 T.M. Vowles / Journal of Air Transport Management 7 (2001) 251–258

passengers. The reason was the emergence of Chicago providing the low fare service with direct and connecting
Midway brought on by Southwest’s arrival. The number service. It is during this time period that Valujet was
of passengers in the market skyrocketed by 7025% to beginning to experience safety problems. A year after
1710 while the average fare dropped by 11% to $93.60. Southwest entry Baltimore was the clear leader in terms
The important thing to note is not the percentage of lowest fare; a 33% decrease to $88.00, and number of
changes that occurred but the fact that Chicago Midway passengers carried, a 71% increase to 12,546. Washing-
had replaced Chicago O’Hare as the gateway to ton Dulles also saw similar results though not to the
Chicagoland after only a year and after having no real same degree as Baltimore. Average fares decreased by
service previously. 17% to $94.05 and passenger numbers increased by
The last multi-airport region that was inaugurated by 33% to 9285. Washington Reagan National saw a
Southwest is the Washington, DC/Baltimore area. The decrease in average fares of nearly 16% to $118.45 but
changes that occurred here are even more drastic than passenger numbers also decreased by 16% to 6131. This
those in the two previous examples. In the quarter prior change can be explained by the decision of two major
to Southwest entry, the number one airport from carriers at Washington Reagan National, Delta and US
Jackson in the region was Washington Reagan National Airways, deciding to focus their low fare ‘‘carrier within
with 888 passengers followed by Baltimore with 394 and a carrier’’ operations at Washington Dulles to combat
the Washington Dulles with 239 passengers. Baltimore Southwest.
had the lowest average fares at $154.63 followed by Southwest entered the Orlando–Fort Lauderdale
Washington Reagan National at $171.96 and finally market during the same time period and had the same
Washington Dulles at $186.08. A year after Southwest effect in this intrastate region as it had in other interstate
entry, the two airports not served by Southwest saw an regions. Prior to entry the top airport in the region from
increase in average fares while the number of passengers Orlando was Miami with 10,465 passengers, Fort
using the airports declined. Washington Reagan Na- Lauderdale was second with 4091 passengers and West
tional fares increased by 5% to $180.46 while the Palm Beach was a distant third with 1742 passengers. In
number of passengers decreased to 555, a 37% decrease. terms of average fares, West Palm Beach had the lowest
The situation was even worse at Washington Dulles average fare of $82.00; Fort Lauderdale was second at
where fares increased nearly by 22% to $226.41, while $88.00 and Miami was third $92.69. A year after
passenger numbers also decreased by 37% to 150. The Southwest entry, the picture had changed considerably.
clearer benefactor was the Southwest-served Jackson– The number of passengers using Fort Lauderdale
Baltimore route with a 328% increase in passengers to increased by 125% to 9213 while the average fare
1685 and a decrease in average fares of 33% to $103.15. dropped to $49.00, a 44% decrease. Miami on the other
While the Jackson–Baltimore link was established prior hand had a less than 1% change in average fare and the
to Southwest entry, the entrance of the carrier visibly number of passengers decreased by 38% to 6463. West
altered the connection between Jackson and the Palm Beach saw a decrease in fares by 30% to $57.34
Washington, DC/Baltimore area. but this decrease was not enough to stop traffic numbers
from decreasing nearly 20% to 1398. These numbers
show that any passenger who was using West Palm
7. Orlando Beach instead of Fort Lauderdale (for example those
passengers that lived in between the two) had shifted to
Southwest entry into Orlando during the third quarter Fort Lauderdale because the loss at West Palm Beach in
of 1996 allows for the study of both inter and intra state terms of total passengers was not that big when
changes to multi-airport regions. Orlando has become compared to those passengers lost by Miami to Fort
one of the top destinations in the United States during Lauderdale.
the 1990s and service to the Washington, DC/Baltimore
area is no exception. Prior to Southwest’s entry, the
lowest average fare in the region was in the Orlando– 8. Manchester
Washington Dulles market at $113.15; Baltimore was
next at $132.00 and Washington Reagan National had Manchester is the most recent city that Southwest has
an average fare of $140.86. The leader in terms of entered within the time frame of this study with service
passengers was Baltimore with 7357; Washington that includes Chicago and the Washington, DC/
Reagan National was a close second with 7265 Baltimore multi-airport regions. The important occur-
passengers and Washington Dulles was third with rence that happened was the phenomenal growth that
6971. This shows that even though an airport has a occurred at the airports in these regions that Southwest
lower fare than the others in a region it may not attract served. Chicago O’Hare was the only Chicago option
more passengers than the others because of who or how prior to Southwest entry with an average fare of $260.99
a carrier is serving the market. In this case Valujet was and 956 passengers. A year after Southwest connected
 T.M. Vowles / Journal of Air Transport Management 7 (2001) 251–258 255

Manchester to Chicago Midway the number of passen- 10. Providence

gers was 2777 and the average fare in the market was
$100.20. This traffic did not come at the expense of Providence, like Manchester, is another prime exam-
Chicago O’Hare where average fares dropped by 32% ple of Southwest entry not only affecting the airports the
while traffic increased by 158% to 2466. Southwest entry carrier serves but also to those airports that are nearby.
into the market had caused the other carriers serving Southwest entered Providence in the fourth quarter of
Chicago O’Hare to lower their fares to remain 1996 with service to two multi-airport regions, Chicago
competitive which stimulated more traffic for both and Washington, DC/Baltimore.
airports. Prior to Southwest entering the Providence–Chicago
The changes that occurred in the Washington, DC/ Midway route, there was no real service on the route (33
Baltimore area were not as beneficial as the previous passengers the quarter prior to entry). Providence-
example. Prior to Southwest entry the airport with the Chicago-O’Hare, prior to Southwest entry, had an
lowest average fare was Washington Dulles at $120.24 average fare of $207.35 and carried 3179 passengers. A
followed by Washington Reagan National at $163.90 year later, the average fare in the Providence–O’Hare
and finally Baltimore at $182.25. As far as passenger market had fallen nearly by 39% to $127.32 while the
numbers are concerned, Washington Reagan National number of passengers had increased almost by 32% to
was the top airport with 1199 followed by Washington 4189. The cause for this change was Southwest who,
Dulles with 377 and finally Baltimore with 245. A year after a year in the Providence–Chicago Midway market,
later, things had changed dramatically. As in previous had an average fare of $95.84 and carried 2176
examples, Southwest’s entry into the Manchester– passengers.
Baltimore market helped vault Baltimore as the gateway The changes that occurred in the Providence–Wa-
to the region. The number of passengers using Baltimore shington, DC/Baltimore markets were even more
increased by 5,379% to 13,425 while the average fare extreme. Prior to Southwest entry Washington Dulles
dropped by 74% to $47.20. The average fare at had the lowest average fare $120.29, followed by
Washington Reagan National also decreased by 20% Baltimore at $156.65, and then Washington Reagan
to $130.34, which caused traffic to increase by a meager National at $172.30. The most popular airport was
7%. The situation at Washington Dulles worsened with Washington Reagan National with 3176 despite having
average fares increasing by 5% to $126.71 and passenger the highest average fare, followed by Baltimore with
traffic decreasing by 33% to 253. Southwest’s dramatic 1725 passengers and then Washington Dulles with 487
reduction of fares and introduction of all jet service passengers. Southwest’s entry into the Providence–
caused a significant increase in traffic for Baltimore Baltimore rocketed the route to the top with regard to
while the other two airports remained generally quiet as lowest average fare and greatest number of passen-
concerning traffic growth. gers. The number of passengers increased an amazing
720% to 14,141 while Washington Reagan National
grew by almost 8% and Washington Dulles lost almost
46% of its passengers. The biggest reason for this
9. Omaha extreme increase was the fact that Southwest lowered
the average fare in the Providence–Baltimore market by
Southwest entry into the Omaha–Chicago Midway 70% to $47. The average fare decreases at Washington
market led to increased traffic and the reduction of Reagan National, 29% to $121.30, and Washington
already low average airfares. Prior to the carrier’s entry Dulles, 21% to $94.37, were no where near enough of a
the average fare from Omaha to Chicago Midway was reduction to capture new passengers in the market and
$71.50 and to Chicago O’Hare was $80.05. A year after to attract the traffic bleed that Southwest was causing at
entry average fares to Chicago Midway dropped by Boston and other surrounding airports.
31% to $49.05 while average fares to Chicago O’Hare
fell by 23% to $61.40.
The biggest change that occurred was the increased 11. Louisville
use of Chicago Midway and the overall increase in
traffic in both markets. The Omaha–Chicago O’Hare Southwest began serving the Louisville–Chicago
route saw a nearly 29% increase in passenger traffic in market by utilizing Chicago Midway in the second
the year after Southwest entry from 3970 to 5118. The quarter of 1993. Prior to entry, Chicago O’Hare was the
Omaha–Chicago Midway route saw an even larger airport of choice with 2180 passengers and an average
increase in passenger traffic from 905 to 2473, an fare of $178.40. Passengers using Chicago Midway as
increase of 173%. Southwest entry into the market their Chicago airport of choice were few and far between
helped lower fares to both airports, which in turn prior to Southwest entry with only 104 passengers in the
attracted more passengers to both. market paying an average fare of $123.80. A year after,
256 T.M. Vowles / Journal of Air Transport Management 7 (2001) 251–258

Southwest entry Chicago Midway became the airport of fare increase at Washington Dulles was in part due to
choice in the Louisville–Chicago market by increasing the shutting down of ValuJet and in turn led to a 15%
the number of passengers to 6793, a 6431% increase decrease in passengers. The increase in average fare
while Chicago O’Hare experienced a passenger decline at Washington Reagan National did not stop
of 9% to 1979 despite the fact that the average fare passenger traffic from growing 5% to 5113, which
decreased by almost 50% to $89.95. This reduction was well behind the growth caused by Southwest at
however was not enough to match the 71% reduction Baltimore.
witnessed at Chicago Midway to $35.34 leading to
Chicago Midway’s ascent to being the gateway airport
for this market.
13. Conclusion

12. Tampa Two distinct trends emerged when Southwest began

service in a multi-airport region. The first trend
Tampa experienced changes that were very similar to uncovered is that fares decreased in a majority of
those at Orlando. Multi-airport regions that Southwest airports in multi-airport regions after Southwest began
inaugurated service with, include the intrastate market service at one of the airports in the region. The second
of south Florida and the interstate market of Washing- trend that emerges is that although fares are lowered
ton, DC/Baltimore. Prior to Southwest entry Fort after Southwest enters, this lowering of fares does not
Lauderdale was the second most popular airport in the translate to increased enplanements at non-Southwest-
South Florida region with 6116 passengers. Miami was served airports. In 17 of the 29 non-Southwest-served
the most popular with 9962 passengers and West Palm markets in multi-airport regions, there was not an
Beach was third with 1834 passengers. This was increase in passenger traffic.
despite the fact that Fort Lauderdale had the lowest When Southwest enters a market with service
average fare at $70. Miami’s average fare at this time from Baltimore, the airport becomes the lowest average
was $80.09 and West Palm Beach was $97.35. After fare and most popular in terms of passenger numbers in
Southwest entry Miami experienced the biggest reduc- the Washington, DC/Baltimore multi-airport region.
tion in passengers losing nearly 36% to 6403. Part of The same was seen in regards to Fort Lauderdale in the
this loss can be attributed to the fact that the average South Florida multi-airport region. In the Chicagoland
fare in the Tampa–Miami market increased by 15% to area, Chicago Midway continued to be the low fare
$92.15. The other reason for this loss in passengers is the alternative airport while Chicago O’Hare held onto the
bleed to Fort Lauderdale where passenger totals passenger lead in a larger share of the markets. The
increased by 117% to 13,260. This switch to Fort important thing to note however is that Chicago
Lauderdale is due to the fact that the average fare Midway had the largest percentage growth of any of
decreased by nearly 25% to $52.81. West Palm Beach the airports in the multi-airport regions and became a
stayed for the most part the same. The average price significant alternative to Chicago O’Hare thanks to
decreased by 4% to $93.55 and the number of Southwest’s presence there.
passengers increased by 3% to 1887. It seems as though United, the hubbing carrier at
The introduction of Southwest into the Washington Dulles and Chicago O’Hare, where all of
Tampa–Washington, DC/Baltimore market shifted a the decrease in passengers and increase in prices
tight three airport market into a Baltimore dominated occurred was willing to give Southwest these markets.
one. In the quarter before entry, Baltimore’s A simple explanation for this strategy is that the carrier
average fare was the highest of the three airports at conceded these markets to grab and transport those
$130.65, Washington Reagan National was the passengers who were traveling beyond these two hubs.
second highest at $123.85, and Washington Dulles had To put it a different way, the United kept their fares high
the lowest average fare $101.70. Washington Reagan on these routes to keep seats available for passengers
National was the airport of choice when measured who were hubbing at the aforementioned airports and
with passenger numbers. The airport saw 4869 passen- therefore were paying a higher fare to travel a farther
gers compared to 4320 for Baltimore, and 3747 distance.
for Washington Dulles. A year later, Baltimore was
the clear leader in terms of number of passengers, 7858,
an 82% increase, and in terms of lowest average fare, Appendix A
$103.41, a 21% decrease. The other two airports
actually witnessed fare increases. Washington Reagan As hinted in the text, details of airport markets and
National increased by 4% to $129.59 and Washington statistical analysis are provided in this appendix
Dulles’ increased nearly by 15% to $116.69. This (Tables 1–4).
 T.M. Vowles / Journal of Air Transport Management 7 (2001) 251–258 257

Table 1
Multi-airport markets

Origin Destination $ prior to entry $ after year Pass qtr prior to entry Pass year after entry $change (%) pass. change (%)

BWI MDW $121.55 $46.90 552 10790 61.42 1854.71

BWI CLE $172.65 $30.45 1624 15730 82.36 868.60
BWI ORD $156.35 $63.35 7656 13327 59.48 74.07
CLE MDW $119.81 $39.15 1031 7046 67.32 583.41
CLE ORD $142.55 $61.45 9097 9119 56.89 0.24
CLE DCA $150.94 $82.33 3446 2930 45.46 14.97
CLE IAD $139.96 $100.74 886 746 28.02 15.80
CMH MDW $113.21 $37.10 1166 8642 67.23 641.17
CMH ORD $116.00 $89.44 5370 4252 22.90 20.82
FLL TPA $70.00 $52.81 6116 13620 24.56 122.69
JAN MDW $105.30 $93.60 24 1710 11.11 7025.00
JAN HOU $146.10 $57.60 72 2002 60.57 2680.56
JAN BWI $154.63 $103.15 394 1685 33.29 327.66
JAN IAH $166.24 $93.66 636 554 43.66 12.89
JAN ORD $166.46 $129.89 943 706 21.97 25.13
JAN IAD $186.08 $226.41 239 150 21.67 37.24
JAN DCA $171.96 $180.46 888 555 4.94 37.50
MCO FLL $88.00 $49.00 4091 9213 44.32 125.20
MCO BWI $132.00 $88.00 7357 12546 33.33 70.53
MCO IAD $113.15 $94.05 6971 9285 16.88 33.19
MCO DCA $140.86 $118.45 7265 6131 15.91 15.61
MCO PBI $82.00 $57.34 1742 1398 30.07 19.75
MCO MIA $92.69 $92.25 10465 6463 0.47 38.24
MDW DCA $107.85 $71.76 1353 2125 33.46 57.06
MDW IAD $117.91 $113.00 148 57 4.16 61.49
MHT MDW $151.80 $100.20 3 2773 33.99 92333.33
MHT BWI $182.25 $47.20 245 13425 74.10 5379.59
MHT DCA $163.90 $130.34 1199 1282 20.48 6.92
MHT IAD $120.24 $126.71 377 253 5.38 32.89
MHT ORD $260.99 $178.70 956 2466 31.53 157.95
OMA MDW $71.50 $49.05 905 2473 31.40 173.26
OMA ORD $80.05 $61.40 3970 5118 23.30 28.92
ORD DCA $185.60 $80.05 19275 20114 56.87 4.35
ORD IAD $201.31 $206.00 4326 1767 2.33 59.15
PVD MDW $145.18 $95.84 33 2176 33.99 6493.94
PVD BWI $156.65 $47.00 1725 14141 70.00 719.77
PVD ORD $207.35 $127.32 3179 4189 38.60 31.77
PVD DCA $172.30 $121.30 3176 3423 29.60 7.78
PVD IAD $120.29 $94.37 487 265 21.55 45.59
SDF ORD $178.40 $89.95 2180 1979 49.58 9.22
SDF MDW $123.80 $35.34 104 6793 71.45 6431.73
TPA FLL $70.00 $52.81 6116 13260 24.56 116.81
TPA BWI $130.65 $103.41 4320 7858 20.85 81.90
TPA DCA $123.85 $129.59 4869 5113 4.63 5.01
TPA PBI $97.35 $93.55 1834 1887 3.90 2.89
TPA IAD $101.70 $116.69 3747 3192 14.74 14.81
TPA MIA $80.09 $92.15 9962 6403 15.06 35.73

Table 2
Statistical results of paired samples test

Mean Std. deviation Std. error T Significance

of the mean (2-tailed)

1. Fare prior to entry and fare after a year 43.578 41.332 6.028 7.228 0.000
2. Passengers prior to entry and passengers after entry 2310.89 4159.35 606.70 3.809 0.000

Table 3
Statistical results of paired samples test WN served markets

Mean Std. deviation Std. error T Significance

of the mean (2-tailed)

1. Fare prior to entry and fare after a year 55.287 43.718 9.7756 5.656 0.000
2. Passengers prior to entry and passengers after entry 5484.70 4372.10 977.63 5.610 0.000
258 T.M. Vowles / Journal of Air Transport Management 7 (2001) 251–258

Table 4
Statistical results of paired samples test non-southwest served markets

Mean Std. deviation Std. error T Significance

of the mean (2-tailed)

1. Fare prior to entry and fare after a year 34.9056 37.9766 7.3086 4.776 0.000
2. Passengers prior to entry and passengers after entry 40.07 1775.11 341.62 0.117 0.908

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