Southwest, the Love Airline, Goes for the Throat

Lurking beneath Southwest's jokey, love-fest exterior beats the heart of a calculating predator. And its sustained profitability gives it the financial wherewithal to act on those killer business instincts.

Denver will have a front row seat for the next episode of Southwest's signature brand of self-effacing carnage, when the discounter launches new flights on August 4.

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In all, Southwest will be adding five new nonstop flights and three new destinations to its current Denver lineup, as follows:

  • Two new daily nonstop round-trips between Denver and Sacramento
  • One new daily nonstop round-trip between Denver and Ft. Lauderdale/Hollywood
  • One new daily nonstop round-trip between Denver and New Orleans
  • One additional daily nonstop round-trip between Denver and Phoenix (for a total of seven)

Southwest's news release quotes the airline's CEO, Gary Kelly, as follows: "Denver's strategic location fits nicely into our network, and we are delighted by the response we have seen to our service and growth in the Mile High city."

Strategic location?

P.R. puffery aside, the strategy has less to do with geography than it does with the competitive landscape. Southwest has identified Denver as a city served by floundering airlines, and it plans to prey on those weak competitors.

Frontier is based in Denver. And Denver International Airport is Frontier's hub—its only hub.

Yes, that's the same Frontier Airlines that is operating under Chapter 11 bankruptcy protection.

Denver is also one of United's key hubs.

That's United, the airline that was recently rebuffed by Continental as a merger partner, on concerns that United's deteriorating financial situation could drag both airlines down. United, the airline whose balance sheet is so tenuous that it was forced just this week to revise terms of its loan covenants to shore up its liquidity. United, the airline so desperate to combine with another carrier that it is deep in merger discussions with another of the industry's weakest players, US Airways.

And speaking of US Airways, Southwest's Denver-Phoenix flights, which will be increased, compete head-to-head with flights operated by US Airways, which is based in Phoenix and maintains a hub there.

There's nothing wrong with a two-prong strategy based on killing your customers with kindness, and just plain killing your competitors. Let's just hope that Southwest doesn't confuse the two.

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