Comment and analysis on all things Charlotte

Southwest Airlines, Incentives Whore

Southwest Airlines is starting service to a new destination later this month, its 69th. And no, it’s not Charlotte, it’s… Panama City, Florida. Panama City? What’s that about? Up to $26 million over two years from real estate developer St. Joe Co. to cover the airline’s losses for the first two years they serve Panama City.

This is part of a pattern. Wichita may be close to landing Southwest too — for $3 million in incentives for start-up costs plus more money to cover the airline’s losses for at least its first two years in Wichita. As a source told the Wichita Eagle:

You’re going to have to make it worth their while. They want a lot of incentives.

Closer to home, South Carolina is offering Southwest up to $15 million to serve the state. The airline has ruled Columbia out, but Charleston, and Greenville-Spartanburg remain possibilities.

From Southwest’s perspective, demanding incentives to cover losses makes sense, as the airline is not growing its fleet. To add a city means shifting capacity from existing markets where it’s at least doing OK.

Bonus question: CLT is the second largest market that Southwest doesn’t serve, behind only Atlanta. It’s never been quite clear what the exact issue was behind their not coming to Charlotte – market conditions here, gate availability, or… incentive demands.

2 Responses to “Southwest Airlines, Incentives Whore”

  • May
    04
    2010

    Or that Jerry Orr is USAir’s beyotch.

  • May
    04
    2010

    SHHH! Bev might be listening!

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