Southwest begins Atlanta offensive

Southwest Airlines' entry into Atlanta is about to get real.

On Feb. 12, Southwest's blue, red and orange 737s touch down for the first time at Hartsfield-Jackson International Airport, kicking off daily service between Atlanta and Baltimore/Washington, Chicago Midway, Denver, Houston Hobby and Austin.

The arrival comes more than a year after Southwest announced its buyout of AirTran Airways. For now, AirTran will continue operating under its own name and colors. But the appearance of Southwest's jets marks the first step in a gradual transformation that will end with only one name and paint scheme on the combined operation: Southwest's.

"The response is going to be just tremendous," said Hartsfield-Jackson general manager Louis Miller, who said he flew Southwest a lot when he lived in Tampa and Salt Lake City. "It's going to be exciting for us. It's been a long time that people have been wanting Southwest to fly into Atlanta. Southwest has its own brand and they do a great job."

Southwest plans to add two more routes on its own planes in March, to Las Vegas and Phoenix, then add flights to Los Angeles starting in June, followed by the launch of flights to Norfolk and Louisville in August.

The absorption of AirTran jets and crews will begin in earnest after Southwest gets Federal Aviation Administration approval to operate the two airlines as a single carrier, expected in March. After that, the conversion will take a couple of years, at the rate of several planes a month.

For Atlanta travelers, Southwest's arrival means a chance to avoid baggage fees, which Southwest doesn't charge. (AirTran will still charge the fees on its own flights.) At the same time, fliers will find Southwest lacks some amenities that both AirTran and archrival Delta Air Lines offer, including seat assignments and business class or first class.

And while Southwest has made its mark nationally as a fare discounter, the effect in Atlanta could be more complicated because AirTran has filled that role here for more than a decade now.

Three of Southwest's announced routes from Atlanta --- Austin, Norfolk and Louisville --- have not been flown by AirTran, and fares could go down as it brings new competition. Yet Southwest also is discontinuing seven AirTran cities served from Atlanta --- and 16 overall --- meaning fares on those routes could rise.

Fares on routes Southwest is simply taking over might get tweaked but aren't expected to change dramatically.

"People say it'll be the Southwest effect, fares will drop. [But] AirTran's already done that," said Evergreen, Colo.-based aviation consultant Mike Boyd, who has studied the Southwest-AirTran merger and its effects in Atlanta. "The majority of the fare stimulation has already taken place."

For Delta, Southwest is a huge new competitor coming right to its doorstep. For Hartsfield-Jackson, Southwest's takeover of AirTran means the arrival of a long-awaited airline, but also the eventual loss of one of its true connecting hubs and the potential for losing some passenger traffic. Southwest plans to dismantle AirTran's Hartsfield-Jackson connecting hub and design its Atlanta operation around travelers going to or from the city.

Southwest has touted its flights in advertising in Atlanta since last fall, and spokesman Brad Hawkins said Atlantans "certainly should expect more as we start small and grow big at Hartsfield-Jackson."

When Southwest announced the five routes it will debut Feb. 12 from Atlanta, it promoted fares as low as $79 each way to Baltimore/Washington International and Chicago Midway, and $99 each way to Austin, Denver and Houston Hobby.

Southwest often advertises attention-grabbing sale fares, particularly when it debuts service in a new city. But it's not as likely to undercut competitors in the same way it has in years past. In an era of high fuel prices, Southwest --- profitable for 39 straight years --- is focused more than ever on bringing in more revenue through higher fares.

Southwest's average fare for all its flights --- including AirTran's --- rose 10 percent in the fourth quarter of 2011, the carrier said when it announced a $178 million profit for 2011.

Southwest long had lower costs than its biggest competitors. But Delta, United, and now American all sought the protection of Chapter 11 bankruptcy to lower their costs, and that eroded Southwest's advantage.

By the time of the Southwest-AirTran merger, AirTran had lower costs and was known for offering broader discounts than Southwest. Both carriers have unions for pilots, flight attendants, mechanics and some other groups.

Southwest's entry means the beginning of the end of AirTran, whose business class and assigned seating will eventually be replaced by Southwest's all-coach open seating service as AirTran planes are converted. Southwest also plans to squeeze more seats onto planes --- including AirTran's --- to increase revenue.

Thomas Reich, an executive at airport services company AvPorts, said some travelers who were fond of AirTran's business class seats and assigned seats may defect to Delta. He said it may mean a greater split between Delta and its low-cost competition in Atlanta, with Southwest as Atlanta's leisure vacation airline and Delta as Atlanta's business traveler airline.

As Southwest cuts unprofitable routes and makes plans to unravel AirTran's connecting hub, it has already cut AirTran's flights from about 220 daily departures when it announced the acquisition in late 2010 to about 190 on Southwest and AirTran combined as of mid-February.

Boyd predicts Hartsfield-Jackson could see as much as a 5 percent decline in passenger traffic as a result of Southwest's shift away from the AirTran connecting hub model. Some connecting traffic may migrate to US Airways' hub in Charlotte, Boyd said.

He predicted Southwest will funnel passengers going to and from Atlanta through cities like Baltimore and Chicago, where the airline has a large amount of connecting traffic and greater dominance of the airports than in Atlanta.

Atlanta travelers have long benefited from gaining access to hundreds of flights Delta and AirTran operate for their connecting hubs --- flights that could never be filled with people going to and from Atlanta alone.

"Southwest has proven that their model works from a profitability standpoint," Reich said. "I think they think, 'Our model has worked everywhere else in the country. We can make it work in Atlanta as well.'"

Unmatched coverage

The AJC and airline industry reporter Kelly Yamanouchi have provided unmatched coverage of the Southwest-AirTran merger, starting with its announcement in October 2010. Yamanouchi, who covered airlines in Denver and Hawaii before joining the AJC nearly four years ago, has chronicled the deal's closing and Southwest's initial moves toward integration. The AJC will continue to closely follow the merger's effects on fares, service and employees.

Adjusting routes

AirTran routes Southwest is discontinuing:

Atlanta to

Dallas/Fort Worth

White Plains, N.Y.

Sarasota, Fla.

Atlantic City, N.J.

Newport News, Va.

Bloomington/Normal, Ill.

Washington Dulles

Routes Southwest is starting that are not served by AirTran:

Atlanta to