We reported that Southwest launched fares to 25 new cities that it can now make available with one-stop connections out of Dallas-Love Field. We expected American to either downscale or even discontinue its Love Field operations and retreat to its fortress at DFW Airport or make a go with connections out of Love Field competing with Southwest.
As reported, the Fare Wars have begun. With the Wright Amendment no longer the subject of the fight, and Southwest’s through-ticketing limitations gone, American has slashed fares on many routes from DFW as well as connectiing routes out of Love. Some fares remain more expensive than Southwest, but American thinks people will pay a bit more to travel nonstop out of DFW than to connect via one of the destinations offered out of Love.
These types of wars are good for consumers in the short term…but past experience has shown that eventually…American will either win or give up, and prices will rise again. As yesterday’s documentary on American suggests, American will use other routes to bolster revenue lost on these, which may mean that markets in which the carrier is dominant will have less low-fare seats available, as the revenue is needed to fight off Southwest.