Analyst Gary Chase with Lehman Brothers says today in a research note that Southwest Airlines appears to be cutting capacity on some of its long-haul routes — beginning this fall.
Chase notes that Southwest has stopped selling seats on a number of longhaul markets effective in October. As Gary notes, “We can’t be certain that Southwest intends to make changes, but the move would be consistent with recent company comments to address under-performing markets in upcoming schedule changes.”
Gary says that Southwest has made seats on a number of longhaul markets unavailable beginning October 4th, including all nonstop flights from Baltimore to Los Angeles and Oakland, and Philadelphia to Los Angeles and Oakland. “We’ve identified similar activity in a number of other markets, including longhaul markets with frequency reductions (such as Phoenix to Providence, with 1 of 2 daily flights unavailable for purchase),” Chase added.
Who would could possibly benefit from such moves? Gary says that the largest beneficiaries could be US Airways or United, with some minor positives for American and Continental. However, clearly it’s not known at this time where Southwest will redeploy the capacity, although one has to assume it is going to be on existing routes — and perhaps those of a shorter-length.
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can you cite where you found this research note?
Hi there Morgan. It was a research note issued by Gary Chase. He is the airline analyst for Lehman Brothers. I can’t post the entire note because of Lehman distribution restrictions– but it was distributed to his usual institutional clients of Lehman Brothers. FYI. Gary is one of the best industry analysts out there — having received the Institutional Investor magazine nod for best airline analyst two years ago. He also follows Southwest very closely and has for years.