As competition heats up, Southwest wants San Diego to know it’s No. 1 airline
Competition among the airlines is heating up, and Southwest Airlines is responding with an ad campaign boasting that it has the most nonstops in San Diego.
- Southwest’s new ad, appearing mostly on digital platforms, begins Friday and will run through April.
- The advertising comes as rival Alaska Airlines is trying to step up its presence in California with a growing number of new nonstop destinations.
- Southwest announced plans last year to begin flying to Hawaii, with hopes to start by the end of the year. The CEO said Friday it is still unknown whether the flights will begin by late this year or early 2019.
Southwest Airlines may be the dominant carrier in San Diego, but as competition heats up from other carriers, it is stepping up its advertising to remind locals that it is the nonstop leader.
A new advertising campaign, which launches Friday — a day after Southwest released better than expected earnings — will run through April 19 and appear mostly on digital platforms such as online and social media channels.
While Southwest is known for its frequent use of advertising, this latest marketing initiative comes at a time when one of Southwest’s biggest rivals in California — Alaska Airlines — has been making aggressive inroads both statewide and in San Diego.
Southwest easily leads Alaska in the number of weekly flights in and out of San Diego — 700 vs. 272, according to the San Diego International Airport. But as of this month, each had 28 nonstop destinations. By this summer, Southwest will lead Alaska with five more destinations.
In the battle for San Diego passengers, Southwest announced nine new nonstop destinations last year, with four of those debuting over the next four months. Among them is a twice weekly flight to Puerto Vallarta starting March 10, and nonstop service to Newark debuting April 8.
Meanwhile, Alaska introduced nine new nonstop flights in 2017, including Baltimore, Kansas City and Mexico City.
“California as a whole is important to us but we’ve been the hometown airline in San Diego for 36 years so it’s just one of the markets that naturally is very important to us,” said Ryan Green, chief marketing officer for Southwest. “There’s certainly a lot of growth there which is why we continue to serve the places San Diegans want to go to, and we have a very loyal and large customer base in San Diego.”
Green, though, would not reveal if there are any more nonstop route announcements on tap for this year. He also would not say much about fare sales this year, but he did offer a hint of lucrative promotions to come: “We’ll be back in the California market with some really low fares again, so be on the look out for that. And we will be back giving away tens of millions of rapid rewards points later this year.”
While not mentioning Alaska Airlines by name, Green boasted about Southwest’s continued dominance locally.
“Despite the interest from competitors in California, Southwest continues to win the battle of nonstops in San Diego, where over 1 in 3 customers are getting on a Southwest plane,” he said. “The ad campaign is highlighting that we are San Diegans’ airline and we fly more nonstops than any other airline. Our competitors are a distant second and third.”
In the last couple of days, airline stock prices have tumbled, including Southwest’s, amid investor fears of fare wars triggered by United Airlines’ announcement of aggressive growth plans.
In an earnings call Thursday with analysts, Southwest CEO Gary Kelly acknowledged a potential impact on the airline but didn’t appear overly concerned.
“Will it impact us? Yes,” he said. “Will it harm Southwest Airlines? We should be respectful of our competitors but we have all the tools we need to continue to perform well in every market (where) we’re impacted. And I just will remind you that 10 years ago we were barely starting in Denver, and 12 years later, we’re the number one airline in terms of the number of passengers in Denver. So I kind of rest my case.”
In California, Southwest no doubt is feeling the pressure from Alaska Airlines’ aggressive expansion, especially since its acquisition of Virgin America, said airline analyst Henry Harteveldt. Southwest still has the advantage of free checked baggage and no change fees, but it has to be wary of its competition, he said.
“Alaska poses one of the strongest competitors in San Diego that they’ve had in a long time, offering more nonstop destinations and competing on both price and product in California,” Harteveldt said. “Competitors are coming for its business and Southwest has to defend itself.”
One destination Southwest is eager to start competing in is Hawaii. It announced last year its plan to start flying there, hopefully by the end of the year, but has offered no substantive updates since then.
Southwest needs approval first from the Federal Aviation Administration to operate longer flights over the ocean, and Kelly said Thursday the airline is on track for that process, having recently submitted its application.
He could not make any promises, though, that flights will in fact start by the end of the year, and it’s still unknown which California markets will initially get the nonstop service. What Kelly is more confident of is that Southwest will be selling tickets for Hawaii flights by the end of 2018.
“There is a chance we could be flying by the end of the year and that will be our goal,” he said on the earnings call. “If we’re up and flying by the end of the year, I’ll be happy but if we don’t it won’t be the end of the world.”
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