Southwest, AirTran and Birmingham
AAA predicts more than 42 million Americans will hit the roads and take to the air this Thanksgiving, traditionally the busiest travel period of the year. At the Birmingham-Shuttlesworth International Airport, many of those holiday travelers will fly the airport’s biggest carrier – Southwest Airlines. Southwest announced this fall it would buy rival AirTran for $1.4 billion dollars. But as WBHM’s Andrew Yeager reports the deal may not be the best news for Birmingham.
Mark McConville remembers the moment well. He’s in his car. The radio is on.
“I’m on my way to Atlanta one morning. It’s 7 a.m. and I heard this story that Southwest is going to acquire AirTran.”
It grabbed McConville’s attention because he runs Airport Express – a shuttle service between Birmingham and Atlanta’s airports.
“And I thought about calling my wife because she’s my partner in this and I thought, no, I think I’ll let her sleep for a little while because this isn’t going to be good.”
This is McConville’s concern. Currently discount airline Southwest flies from Birmingham. It has no presence in Atlanta. He says a little more than half his business right now comes from people riding to the Magic City for those cheaper Southwest fares. But AirTran does fly from Atlanta. So an acquisition could bring Southwest to the Georgia city.
“So initially my gut feeling was, well, I think I just heard the proverbial end of the game whistle.”
Bad News for Birmingham?
The airline deal reaches further than just one airport shuttle company. Southwest is the Birmingham airport’s largest airline by passenger traffic – carrying nearly 45% of travelers in recent months. Not only could Birmingham face new competition from Atlanta, AirTran also flies from Huntsville. So the acquisition could give Southwest a foothold in North Alabama too.
John Kasarda is an airline analyst at the University of North Carolina. He says Birmingham officials should be worried because people don’t necessarily use their hometown airport if they think they’ll get a better deal nearby.
“You have to think of that catchment area particularly as you go in the direction of Atlanta and there’s a fair amount of overlap in that hour to hour and a half commute.”
However, Richard Gritta is not so sure Birmingham will suffer. Gritta follows the airline industry from the University of Portland in Oregon. He says Southwest has built its success by using smaller, regional airports and he doesn’t see that changing much.
“They don’t like to go into the major hubs, if possible, because that’s where you get the traffic congestion and the possible delays.”
So even though Atlanta is an AirTran hub, Gritta believes Southwest might not leave a major presence there if the acquisition goes through.
“If you see cutbacks, I think it will come from cutbacks in the major hubs like Atlanta.”
Spokespersons for Birmingham, Atlanta and Huntsville’s airports declined to be interviewed for this story saying it is too early to comment on what effect the deal may have. A Southwest spokeswoman says the buyout would not affect existing cities, but they could not offer any details. The acquisition is subject to federal approval and is expected to close the first half of next year.
While there are many specific questions still up in the air, the University of North Carolina’s John Kasarda says Southwest’s presence in Birmingham means the airport is well run. And that’s a starting point for maintaining its position.
“I think you want to make sure the conditions remain so that Southwest does not transfer any of its flights to Atlanta or to other sites and that you continue to provide a positive experience to the air passenger that utilizes Birmingham. It’s about customer service.”
An Uncertain Future
“Now you doing okay this morning? How about you? You doing okay? Good, good to have you all on board this morning. I’m going to shut this door and take that baggage and we’ll be ready to go okay?”
One of Mark McConville’s Airport Express drivers makes final preparations for this van ride – a Birmingham to Atlanta leg. Like everyone else McConville doesn’t know what to expect. He says his worst fear is for Southwest to start flights between Birmingham and Atlanta. It could also be with Southwest in Atlanta that airport becomes more attractive to travelers creating new business that direction.
“What’s the saying? Prepare for the worst and hope for the best.”
Airport Express has flown through other turbulence in its 24 year history. 9/11. The current recession. McConville says after 9/11 he felt business would return. With this Southwest deal, he wonders if business will simply dry up.