Does SWA Still Run California? AS/VX Might Become a Threat...

Executives at Southwest Airlines like to joke that they run a California airline, based in Texas.
For good reason. The Dallas-based carrier flies more passengers in and out of California each year than any other airline, thanks primarily to a dominance in midsize cities including Burbank, San Diego, Oakland and San Jose.
“We have never fallen out of love with California,” said Andrew Watterson, Southwest’s vice president of network and revenue.
But there is a new suitor for California fliers.
The parent company of Alaska Airlines is rushing forward with a $2.6 billion deal to acquire Virgin America in hopes of becoming the predominant airline of the Golden State — and the entire West Coast.
“Right now we are not your go-to airline if you live in California,” said Joseph Sprague, senior vice president for communications and external relations at Alaska Air Group. “We plan to change that.”
The deal sets up a David-and-Goliath battle to reign supreme in California, one of the nation’s most lucrative travel and tourism markets and home of 39 million potential fliers.
The competition could be good news for California travelers because both airlines are expected to fight for passengers with low fares, convenient routes and better departure times.
“If we see more competition emerge, that is a good thing for the travelers,” said Henry Harteveldt, an airline and travel analyst for Atmosphere Research Group in San Francisco.
Southwest is usually the best deal in California air travel.


On the state’s busiest airline route between Los Angeles and San Francisco, traveled by nearly 2 million passengers each way a year, Southwest’s lowest fare is a bit more — about $140 round trip for the cheapest tickets — than competitors Virgin America, American Airlines and Delta Air Lines, which offer round-trip economy seats for as low as $137.

But Southwest’s ticket price includes two free checked bags, and there are no fees to reschedule a flight. The other airlines charge $25 for the first checked bag; double that for round trip. Rescheduling could cost a traveler up to $200 a ticket.
Still, Alaska and Virgin America have weapons beyond price in the battle against Southwest.
Virgin America flights add cool ambiance and friendly service plus a high-tech onboard entertainment system that makes flying fun and relaxing, veteran air travelers say.
John Riddle, an advertising producer from San Francisco, has been flying Virgin America for about six years and said he would rather pay extra to fly Virgin America over Southwest.
On Virgin America, he said, he can order food from the seat-back entertainment system and plug his laptop into the in-seat power outlets — features not found on Southwest.
“Once I fly them, every other airline seems bland,” Riddle said.
Those kind of features helped Virgin America win “best domestic airline” in Condé Nast Traveler’s readers’ choice awards for the last eight years, among other honors.
Alaska is also known for good passenger service, having been the highest-ranking traditional airline for nine straight years in the J.D. Power airline satisfaction study.
Alaska also has the only loyalty reward program in the industry that offers awards based on miles traveled. Most other airlines have shifted to a rewards program based on dollars spent.