Austin-Bergstrom International Airport (AUS) has released data from October with considerable detail. The airport has seen a series of ongoing positive developments in the return of air travel. American Airlines and Southwest Airlines are in a big fight for travelers at the airport, and the benefit is new and expanded air service from both carriers. While Southwest has traditionally held a firm lead in terms of traffic at the airport, American Airlines has made significant strides in closing the gap.
American closing the gap on seat share
Based on seat share, these are the largest airlines in Austin in December 2021:
- Southwest Airlines: 34%
- American Airlines: 30%
- United Airlines: 11%
- Delta Air Lines: 11%
- Alaska Airlines:3%
- Allegiant Air: 3%
- Spirit Airlines: 3%
- JetBlue: 3%
- Frontier Airlines: 1%
- Other: 1%
Compared to December 2019, United and Spirit lost three points of market share. Delta and Southwest lost two points. American Airlines gained a whopping 13 points. The only other airline to gain in share is Allegiant, which gained two points on the heels of the inauguration of its base in Austin.
In December 2019, American Airlines held a 17% share of the market in Austin, just above United’s 14% and Delta’s 13%. Southwest led the pack at 36%. Southwest has lost some share, but it blunted against that with growth in its Austin schedules.
American’s growth reigns supreme
American Airlines reached its 17% share in Austin in 2019, with service primarily to its major hubs. This includes hubs like Charlotte, Los Angeles, and Dallas. American had some point-to-point service, but it was limited to a few destinations that could support it.
However, starting earlier this year, American Airlines began to significantly grow its presence here. It started with a handful of routes to expand American’s point-to-point service and offer flights to the top gateways for business travelers. American later added even more routes out of Austin and also began to grow its leisure presence to cater to the wide variety of travelers based in the city.
Some of the more recent service additions out of Austin from American Airlines include Liberia (LIR) in Costa Rica, Punta Cana (PUJ) in the Dominican Republic, Puerto Vallarta (PVR) in Mexico, and Tulsa (TUL) in the United States. Around the holiday season, American is adding service to Denver (DEN), Fort Myers (RSW), Salt Lake City (SLC), and Sarasota (SRQ). Albuquerque (ABQ) will start in January, and DEN will move to year-round service.
While American has grown its flight schedules to its hubs and pre-crisis cities, the majority of its growth in seat share has come with the airline’s network expansion from the city. It would not be surprising to see American engage in another round of expansion ahead of summer 2022 from Austin, which could push the gap closer.
Southwest Airlines defends
Southwest Airlines has served Austin for 44 years. Coming in the top ten of longest-served points in the carrier’s network, the airline has worked hard to maintain its position as Austin’s leading carrier by seats and network breadth. As a result of American’s growth, Southwest Airlines has gone on defense.
In September, Southwest announced a sizable expansion out of Austin. The airline announced it was adding over 20 daily flights and growing to 46 destinations. Southwest added nine cities, including Amarillo (AMA), Charleston (CHS), Columbus (CMH), Midland (MAF), and Ontario (ONT), and Puerto Vallarta (PVR), from March. It will start seasonal weekly service to Panama City (ECP), Sarasota (SRQ), and Destin/Ft. Walton Beach (VPS) in March as well.
AUS expects Southwest’s seat share to grow and remain ahead of American based on the expanded service the airline has announced. Couple this with Southwest’s plan to keep growing the depth of its schedules to pre-crisis levels, and the airline is likely to stay in the top spot. When and how quickly Austin comes back will be based on demand and the overall business environment in Austin.
American goes after premium travelers
American Airlines has an opportunity to go after a segment of the market that Southwest cannot: premium travelers. American Airlines is already announcing its intention to continue growing its presence with premium travelers over the next few years. American is planning on building a new lounge in Austin that will cater to premium customers.
This will be part of the airline’s appeal to many of the growing corporate travelers in the Austin area. It should also help the airline blunt against any moves United or Delta make to go after those premium customers.
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What things look like in 2022
Looking at June 2022, both Southwest and American will offer some sizable schedules out of Austin. Looking at schedules in Cirium, American Airlines has planned up to 75 flights per day with 71,782 seats offered every week, with an average of around 138 seats per departure. Southwest Airlines will remain dominant. The airline will offer a maximum of 108 flights per day with 114,050 seats available per week. Per departure, on average, Southwest will offer 155 seats.
Southwest will be over 50% larger than American next summer, based on current seats scheduled in June 2022. There is room for American to grow its schedules out of Austin by switching to some larger aircraft. Plenty of American’s flights out of Austin are scheduled on regional aircraft like the Embraer E175 and smaller mainline jets like the Airbus A319.
On the other hand, Southwest only flies the Boeing 737 family of aircraft. Its Boeing 737-700s seat 143 passengers in an all-economy configuration, while its Boeing 737-800s and MAX 8s seat 175 passengers. One difference between Southwest and American’s offerings is that American has a dedicated premium cabin, while Southwest operates in an all-economy configuration.
Moving forward, expect American and Southwest to closely watch the airport’s massive redevelopment project. The airlines will likely be jockeying for influence over gates, which are limited in Austin. Without access to more gates, American could reach a structural limit to the number of flights it can operate and destinations it can serve. Nevertheless, Austin is turning into a battleground between two major airlines, and the beneficiaries will be Austin’s travelers.
