Average Airfares Research Articles

The “Southwest Effect” in multi-airport regions

The “Southwest Effect” is a well-known phenomenon within the airline industry where markets that Southwest Airlines enter see an increase in traffic and a decrease in average airfares. This paper examines the role of Southwest Airlines in altering fares and passenger traffic and the Southwest Effect at airports in multi-airport regions. A comparison between Southwest-served routes and non-Southwest-served competing routes shows that the elements of the Southwest Effect are present even in those markets not served by Southwest. Southwest-served multi-airport regions studied include Chicago, Washington, DC/Baltimore, Houston, and south Florida.