‘Southwest Effect’ muted in carrier’s first year in Atlanta

The first Southwest Airlines jet to arrive at Hartsfield-Jackson International Airport last winter was greeted with balloons and fanfare, heralding a new style of low-cost carrier for Atlanta and an antidote to the dreaded checked baggage fee.

A year later, the so-called “Southwest Effect” is limited. Atlanta travelers haven’t seen the drops in fares that the Dallas-based carrier brought to other cities, and some fares are up. Southwest planes are few and far between at Hartsfield-Jackson, where they carry about 2 percent of passengers.

Still, the carrier’s arrival has produced one benefit — analysts say it has forced Delta Air Lines to up its game.

Southwest bought AirTran Airways in 2011 to gain a foothold in Atlanta, then launched its own service here last February. Southwest always said it planned to slowly meld the operations over two or three years. But frequent AirTran travelers say they expected more visible evidence of a new owner that is the largest low-cost carrier in the nation.

“I’ve actually been shocked that I haven’t seen Southwest be more aggressive in the Atlanta market, because I thought we would see huge changes,” said frequent flier Ed Cordell, who lives in Norcross.

Because AirTran was already posing price competition for Atlanta-based giant Delta Air Lines, industry experts didn’t expect Southwest’s entrance to lower fares in Atlanta as much as it has in other cities where it was trying to carve out new market share.

Southwest spokesman Brad Hawkins said fare trends nationwide are largely driven by fuel and other cost issues.

“All of the systemic fare increases that we’ve taken have been very deliberately decided and strategically made and I think are a reflection of the higher operating costs in all the markets that we’re serving,” he said.

Southwest said fares from Atlanta are down overall on some routes its own planes started flying in the past year, such as Austin, Denver and Houston, while prices are up on flights to Los Angeles and roughly the same to Chicago and Phoenix.

Nationally, average domestic air fares increased 1.8 percent in the third quarter of 2012 compared with a year earlier, while falling 3.4 percent in Atlanta, according to a federal report. A report by Buckingham Research Group looking at an earlier time period shows average AirTran/Southwest Atlanta fares up about 11 percent, though that could be the result of more people flying in higher fare categories rather than simple price increases.

“I feel like the fares have been pretty consistent, which is surprising that they haven’t gone up more,” said traveler Joan Arkins, of Virginia Highland.

One of Southwest’s calling cards is free checked baggage, a policy in place on its own Atlanta flights and one that can cut the cost of a round-trip flight significantly. Under Southwest’s ownership, however, AirTran not only continues to charge for checked bags, it’s boosting the fee starting this week. The charge on the first checked bag, for instance, rises $5 to $25.

Since the Southwest buyout AirTran has cut some flights and routes in Atlanta. Southwest now has 29 daily departures from Atlanta, while AirTran maintains 159, for a total of 188. When the buyout was announced in late 2010, AirTran had about 220 flights.

Delta remains the local behemoth with nearly 1,000 daily flights from Hartsfield-Jackson. Asked for a comment about the new player in the market, Delta issued a statement saying: “While we compete vigorously with other airlines in Atlanta, our customers, particularly business travelers, continue to choose Delta” for its route network and amenities like first class.

Unlike AirTran, Southwest has all-coach seating and does not offer a front-cabin option - a fact Delta hopes will send some AirTran fliers in its direction as the transition continues.

Meanwhile Southwest’s entry on Delta’s home turf has prompted Delta to work on its on-time rate and other service metrics, which have improved in government rankings. It’s also tweaked service options.

“I think Delta has been more attentive” to Atlanta customers, airline consultant Robert W. Mann said.

Once a loyal AirTran customer, Cordell said he started flying Delta more often after it began selling the “economy comfort” coach seats with extra legroom.

He also thinks Delta flight attendants are “trying to loosen up and almost be a little more like Southwest,” long known for encouraging flight crews to tell jokes or otherwise ham it up a bit. Delta has recently started using a cheeky new safety video.

Behind the scenes, Southwest’s integration of AirTran has been slower than expected, Mann said.

“There have been a bunch of unanticipated issues,” ranging from labor negotiations to technology issues to aircraft changes, the consultant said.

Airline mergers are always daunting, with service policies, booking systems, pay scales and workforce cultures, among other things, all being blended while maintaining a massive daily operation. And Southwest traditionally avoided connecting hub operations such as AirTran’s, magnifying its challenge in Atlanta.

“These things take time,” Hawkins said. “We want to be deliberate and make sure we have the best possible customer experience when merging hugely-complex organizations, technology and operations. We want to get this right and that’s what we’re working to do.”

Southwest’s conversion of AirTran flights into its own is currently expected to take until 2015, when the AirTran brand will disappear. Southwest ultimately plans to dismantle AirTran’s connecting hub, which could lead to a further reduction in flight schedules.

Bob Jordan, who oversees the AirTran operation for Southwest, said “there are real positive signs in Atlanta, like the gains we’ve seen in local passengers.”

And Southwest says many of the changes are yet to come. “We’ve got a big year coming up” for Atlanta, CEO Gary Kelly said during a recent conference call with financial analysts.

Arkins, the traveler from Virginia Highland, doesn’t mind the slow integration.

“I feel like they’re still two separate airlines. I don’t feel like they’re integrated at all and I thought it would have happened by now,” she said.

“But I’m happy with AirTran so I really don’t want to see AirTran go away.”

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