Southwest Airlines Co said on Monday it will offer nonstop flights from its base at Dallas Love Field in Texas to 15 major cities including Chicago, New York and Los Angeles later this year, after flight restrictions from that airport expire.
The carrier plans to fly nonstop to Baltimore, Denver, Las Vegas, Orlando, Florida; and Chicago Midway from October 13. Service to Atlanta, Washington D.C., Los Angeles, New York LaGuardia, Phoenix and other U.S. cities will begin on November 2.
The new Love Field flights are planned as Southwest, traditionally a low-cost carrier, prepares to serve more U.S. cities with airport assets gained in New York and Washington after American Airlines Group Inc sold takeoff and landing rights. Southwest will start international service under its own brand this year as it completes the integration of AirTran.
"This is an opportunity for Southwest to capture passengers in the Dallas area who are now using other carriers to go nonstop to these points," said George Hamlin, an aviation consultant who is president of Hamlin Transportation Consulting in Fairfax, Virginia.
"Since many of these are business centers that probably generate considerable high-yield traffic, I think this is an opportunity for profitability enhancement on Southwest's part."
Hamlin said American, the dominant carrier at nearby Dallas Fort Worth Airport, may lose some traffic to Southwest in the short term after the new nonstop flights start from Love Field.
In the late 1970s, a federal law called the Wright Amendment was introduced which restricted nonstop flights that airlines could operate out of Love Field to nine states. U.S. Representative Jim Wright, a Texas congressman who served as House Speaker, was concerned that Dallas Love service would harm Dallas Fort Worth Airport.
Southwest said on Monday that the October expiration of the law will allow direct flights to 41 more states and the District of Columbia.
The repeal "signifies a turning point for the Southwest brand not just in Dallas, but from coast-to-coast," Southwest Chief Executive Gary Kelly said in a statement.
In recent months, Southwest won takeoff and landing rights at Reagan National Airport near Washington and at New York's LaGuardia that American is selling under a merger agreement with the U.S. government.
"What you're seeing is Southwest being fleshed out nationally," Hamlin said. "Southwest geographically has become pretty much a full-spectrum competitor in the lower 48" states, with a presence in most major cities now.
In preparation for flight expansion, Southwest has been renovating Love Field - which was established by the Army in 1917 and began airline service in 1929 - with a new concourse and gates, remodeled lobby and new ticketing wing.
Shares of Southwest were down 2.5 percent at $20.42 on Monday afternoon, after shares of most other airlines headed lower. Shares of United Continental Holdings Inc were down 4.1 percent at $43.94 and Delta Air Lines Inc was down 3.5 percent at $29.54.
Jim Corridore, an equity analyst with S&P Capital IQ, said airlines have outperformed in recent weeks and are likely selling off along with the broader market. He also said news of a new winter storm hitting the Mid-Atlantic and Northeast U.S. regions [ID:nL2N0L80QV] could be pressuring the sector.
(Reporting by Karen Jacobs in Atlanta; editing by Bernadette Baum and Matthew Lewis)