When Alaska purchased Virgin America, it was all about rising its presence in California, and a part of that technique was progress in intra-California flying. The king of intracal, Southwest, has been fairly clear it wasn’t going to present an inch, and Alaska has danced round looking for the best stability. I assumed the airline had reached a contented place, so I used to be shocked to see that Alaska was going to enter Burbank – San Francisco, a market that Southwest flies together with United. It seems, Southwest is out, and Alaska is sliding in.
The intra-California market is gigantic, and it’s one which Southwest has largely dominated for a few years. It’s really been surprisingly regular for the final 20 years or so. Right here’s a have a look at seat capability.
Intra-California Seats by Airline
Southwest has been working between 50 and 60 p.c of seats inside California for a very long time, although post-pandemic as different airways have did not get better as rapidly, Southwest has surged as excessive as because the upper-60 p.c vary. This summer time it’s sitting within the low-60s.
As spectacular as that will appear, it actually doesn’t inform the story of journey inside California. This does.
Intra-California Native Passengers by Airline
The above chart appears on the variety of passengers really beginning and ending their journeys inside California, not simply the variety of seats. Southwest has pretty constantly carried between 60 and 70 p.c of these vacationers, punching above its weight. United, the airline with the second largest quantity of capability within the state, is definitely in third place by way of passengers with between 10 and 15 p.c of native vacationers. Why so low? That’s as a result of a lot of United’s capability is connecting by its LA and San Francisco hubs to go elsewhere.
What could also be stunning right here is that Alaska is definitely the second largest service of native site visitors throughout the state, hovering across the 15 p.c vary as of late. A lot of that’s due to a few of the airline’s flying in locations like Santa Rosa and San Diego. However the San Francisco (SFO) story is a distinct one.
Southwest has by no means had a really massive presence at SFO due to its concentrate on Oakland, however what flying it has executed from SFO has largely been to different California locations. It had been near a 3rd of the SFO – California market however within the post-pandemic world it has been nearer to the low to mid-20 p.c vary. This isn’t Southwest’s strongest market, clearly.
United stays the massive airline there, nevertheless it solely controls a few third of the intracal market. In post-pandemic occasions it has climbed to the mid to high-30 p.c vary, most likely as a result of there was much less Asian site visitors connecting by and it has repurposed the capability it has. I think about it will change as Asia grows once more. That leaves Alaska, which has grown to the mid to excessive 20 p.c vary in latest quarters.
Regardless of that first rate share, Alaska doesn’t have as a lot of a presence within the SFO – California market as you would possibly anticipate. It solely flies to Los Angeles, Orange County, Palm Springs, and San Diego. That’s it… till now.
This previous weekend, Alaska filed plans to run 3 day by day Embraer 175s from San Francisco to Burbank (2 on Saturday). That is the primary new California route from SFO since Orange County was launched in 2017. However why?
United has been operating 3 day by day regional flights, however simply this month it bumped that as much as 4. Southwest has been operating 5 to 6 737s a day on the route as nicely (2 to three on weekends). The market appears like this:
Burbank – San Francisco Capability and Fares
What’s that massive drop in 2024? Effectively that’s the place issues get fascinating. It seems that Southwest will likely be ending its flying on the Burbank route on January 7. It’s no surprise Alaska was eager about making a transfer.
The general story right here is that if Alaska is competing within the intra-California market, it’s competing in opposition to Southwest. United issues, particularly from San Francisco, however United tends to be way more involved with that connecting hub site visitors. Alaska figures with Southwest out, it has an opportunity to make the market work. It’s not a shock to see this, however it’s nonetheless reminder of simply how a lot Southwest dictates this market.
The query now’s whether or not Southwest decides to reverse course, or if this was simply non permanent within the first place. Fares weren’t all that dangerous available in the market for Southwest — on par with San Diego and nicely above LA — however load components within the winter had been fairly terrible. This yr noticed Burbank below 50 p.c in January with February at 53 p.c and March hitting 64 p.c. The opposite intra-California markets had been much better.
Summer time tends to do a minimum of considerably higher, so perhaps Southwest was simply planning on taking a break. We wouldn’t know but since schedules are solely filed into early March at this level.
Both method, what’s clear right here is that if Southwest opens the door even a crack, Alaska is watching. And Alaska is able to pounce when the chance arises.