United vs. Southwest (Part 2): Showdown in DC

Southwest Airlines, that bastion of low fares for the past thirty-five years, has announced it will serve Washington's Dulles airport this year. And to make matters even more interesting, it's the second hub of United Airlines that Southwest has invaded this year. (It started servicing Denver International in January.)

CEO Gary Kelly said that Southwests moves into markets that "are overpriced and underserved", and with the liquidation of Dulles-based Independence Air in January, there's been a low-cost carrier gap at the airport that hasn't been filled until now.

As of now, Southwest only wants two gates at Dulles' Terminal B concourse, and the airline did not specify where it would fly to from IAD. But its CEO said that service would most likely start in the early fall with ten to twelve daily flights to four or five destinations.

This move by Southwest is somewhat confusing to me. On the one hand, the collapse of Indy Air leaves reasonable space for a low-cost carrier to move in. On the other hand, Southwest has a hub just to the north in Baltimore, where it is one of the dominant carriers at BWI.

United, Ted, and United Express handles about 60% of the traffic at Dulles, and a United spokeswoman said, "We compete vigorously everywhere we fly." But an industry analyist pointed out that following this move, United once again has low-cost competition at each of its hubs - Southwest at Chicago's Midway Airport, across town from United's megahub at O'Hare; Frontier at San Francisco; Frontier and Southwest at Los Angeles; Frontier and Southwest at Denver; and now Southwest at Dulles.