The “Southwest effect” became a major reason that overall fares dropped in its new markets, and the phenomenon was studied in business schools and the halls of government. The Department of Transportation marveled in a 1993 report: “The principal driving force behind dramatic fundamental changes that have occurred and will occur in the U.S. airline industry over the next few years is the dramatic growth of low-cost Southwest Airlines.”
Southwest continues to have that impact when it enters a new airport. After it began service to Baltimore-Washington International in 1993, fares dropped by 70 percent and passenger traffic increased sevenfold. Traffic between Philadelphia and Providence increased by more than 800 percent, and one-way average fares fell to $44, a drop of 83 percent, in the year after Southwest entered Philadelphia in 2004.from The New York Times.
But, can it continue?
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