Entry Patterns in the Southwest Airlines Route System

We estimate a model of city-pair entry for Southwest Airlines using data from 1990 to 2000. In addition to quantifying the market characteristics which have influenced Southwest’s entry decisions, we find evidence that Southwest’s entry strategies have changed significantly throughout the decade. Based on our model’s estimates, we provide an estimate of the foregone fare savings resulting from the Wright and Shelby Amendments. Finally, we identify those markets that are the most likely for future non-stop entry and suggest which network carriers are most vulnerable to future Southwest expansion. Copyright Kluwer Academic Publishers 2004