American Airlines is closely watching bookings and airfares in the lead up to Southwest Airlines’ coming expansion in Washington D.C. and Dallas, according to American’s recent Q2 earnings call. Southwest in October will be able to add flights at Dallas Love Field due to the phasing out of a restrictive law, plus it had purchased the slots at Washington’s Reagan (DCA).
One Wall Street analyst asked American Airlines CEO Doug Parker if the coming capacity increases would hurt American Airlines’ bottom line.
“It’s really too early for us to see any impact,” Parker told analysts. “We don’t see anything in our numbers yet that’s identifiable. But we know there will be an impact from both of those,” he said, referring to Southwest’s expansion in both Washington and Dallas. He noted that he anticipated the impact would be bigger in Dallas than in Washington.
MORE STORIES: Airlines’ mishandled bag rate increases in 2014 vs. 2013
MORE STORIES: US hotels sold a record 113 million room nights in July
MORE STORIES: American Airlines extends $300 r/t solo-kids fee
Ultimately, though, Parker said American holds a competitive advantage over Southwest for several reasons.
“I think we’ll still do quite well, and Dallas is a fantastic hub. We’ll still do really well in the markets that we serve,” Parker said. “We’re going to have a much better pattern of service really in all of those markets for frequent customers, which they care about. We have a much better frequent flier program, which the elite and frequent traveling business customers care about and we’re going to compete aggressively with Southwest. But…when you add more capacity in any market, it obviously has some impact…We’re going to compete with the strength of our great frequent flier base and one of the best hubs in the world.
Readers: Would you consider switching airlines once Southwest expands services in Washington and/or Dallas? Why or why not?