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Rock Solid: Southwest, BWI Marshall Still Growing Together

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Simply stated, the marriage between BWI Thurgood Marshall Airport and Southwest Airlines resulting in one long, successful trip is a fitting metaphor. Period.

There really hasn’t been anything strange or surprising about it — except, perhaps, that it’s been wildly successful, beyond anyone’s imagination.

What began in 1993 with 10 low-fare flights to two destinations has, after more than two decades, evolved into a rock-steady eastern anchor for the Dallas-based carrier that mainly operates out of expansive A/B concourse. Today, BWI hosts more than 200 flights a day and ranks among Southwest’s Top 5 airports, with Chicago (at No. 1 Midway), Las Vegas, Denver and Phoenix rounding out the list.

With most U.S. cities served, Southwest is focusing more on further penetrating the international market. The progress just makes a glance in the rear-view mirror all the more fascinating — and recalling that it took five years to get it out of the gate.

Some History

Founded as Air Southwest in 1967 at Love Field, Dallas, by former CEO Herb Kelleher and Co-Founder Rollin King, the company’s original concept was to operate only in Texas, and thus avoid regulation; it was renamed Southwest Airlines in 1971. After about a dozen years of various growing pains, it established its first out-of-state routes to New Orleans, then a couple of years later to Tulsa, Oklahoma City and Albuquerque; then, gradually, it was on to many points beyond, with a western focus.

Then came the ’90s, and a glance east; first to Florida, then BWI. The big day for Baltimore was July 14, 1993, when Southwest announced five daily flights, effective the following Sept. 15, to Chicago-Midway and to Cleveland.

“We established a great center of gravity in Baltimore and people liked the low fares,” said Dave Harvey, managing director of business development for Southwest. “The U.S. Department of Transportation even coined the term ‘The Southwest Effect,’ when it noticed how fares would be cut in half and traffic would double when we went into a city.”

That was because of the dynamics that were in play, Harvey said.

“BWI was a secondary market then — and that’s the kind of place we looked to,” he said. “It offered us the best opportunity, since everything was locked up at [now Ronald Reagan] National [Airport], and Dulles [International Airport] was a hub for United, Delta and American, and we didn’t want to pick fights at airports where there wasn’t room for us.”

At that point, BWI “was underserved, with a great product, but there were other things going on there, too,” Harvey said. “Piedmont has been bought by USAirways, which continued to serve BWI. There were other carriers, like MetroJet, which focused on large metropolitan airports; and AirTran, which didn’t overlap us much [which Southwest bought in December 2014].”

Sealing the Deal

Jay Hierholzer, who ran the marketing efforts at BWI from 1985 to 2000 and is now a residential real estate broker at Coldwell Banker Residential Brokerage’s Ellicott City office, recalled the negotiations that eventually led to a travel revolution at BWI.

“Southwest started with two gates and wanted to expand to six,” said Hierholzer. “They brought in their bigwigs at our final meeting in Dallas, and we showed them our master plan to expand our gates, offered to do joint marketing with them [and the deal was finalized].

“We had worked on getting them into BWI, off and on, from 1988 until the deal was signed around February 1993,” he said. “Then we had to keep [the news] quiet for six months, but it was leaked to the Dallas Morning News.

“It was a big deal,” Hierholzer said, “and everyone knew it.”

The BWI group, led by Maryland Aviation Administration Executive Director Ted Mathison, knew all along the deal would be about more than those few initial flights and that it would have a tremendous impact on the local market, for a simple reason.

“Southwest could fly north and south from our spot on the map,” Hierholzer said, “and they eventually added more flights to the west. They liked our infrastructure, too, with the highway access and the BWI Rail station.”

Still not everyone was totally sold.

“I recall businesspeople saying they wouldn’t use them since they’d have to stand in line to board, and back then they didn’t have assigned seats, food service or business class,” Hierholzer said. “Then they took their family to Disney World on Southwest and saw how much money they saved.”

Not only that, Southwest helped BWI Airport to really claim the second city (or initial) in its name and acronym.

“Southwest really gave us a needed boost to market ourselves as the airport of choice in the pre-Inter-County Connector era in Washington. For years, we tried to market [to] D.C. and Montgomery County,” Hierholzer said, “and tried to show people in that area that the world didn’t end in Laurel.”

Oh, Those Numbers

Southwest’s impact eventually led to a modified landscape in the BWI Business District. “Just look at how the hotel market has grown. There were just a handful of hotels near BWI before Southwest,” Hierholzer said, noting the Friendship International Hotel (1966), the Holiday Inn BWI (1971), then eventually the Comfort Inn & Suites BWI, the BWI Marriott and a few others.

“That was about all the hotels we had,” he said. “Now, there are more than 30.”

Longtime area hotelier Lou Zagarino, who ran the Friendship, then the Holiday Inn BWI, and developed the Comfort Inn (and the adjacent Sleep Inn), acknowledged the growth that Southwest helped spur in what is now called the BWI Business District.

“From the very beginning, Southwest was different,” said Zagarino, now CEO of Whitehall Management, Millersville. “I love to talk about the company’s positive culture and its business model. The other airlines didn’t, and still don’t, even have a culture.”

For instance, their employees participate in the business community.

“They fundraise, regularly attend meetings and donate to charities; and if you call one of them, you get a human being on the line, not a voicemail. They have a guy named David Richardson who’s been on the BWI Business Partnership board for about 10 years. He’s always there when somebody needs something.”

Zagarino also remembers when the state was courting Southwest. “Herb Kelleher would come in and he would meet the governor, the mayor, our people; since he retired, [CEO and Chairman]Gary Kelly has done likewise. Once, the Partnership celebrated Kelly’s birthday, and he presented the 200 attendees at the meeting with $100 vouchers. Then the media picked up the story. That’s great marketing.”

The forward thinking has resulted in a healthy ledger. “On a seat basis, we have 82% of the seats at BWI Marshall,” said Harvey. “We have more than 2,500 employees there and, over time, we’ve had to hire more and more top management. We’ve been hiring like gangbusters.”

As for thoughts of top management getting any ideas after Southwest started offering flights from the other airports in the region, don’t bet on it.

“There were folks who were saying that Southwest getting slots at other airports could lead to the end of Southwest at BWI,” said Harvey, “but we’re simply building out our model at all three (Baltimore-Washington area) airports. We see Philadelphia as a separate market. We only have about 25 flights a day there.”

Southwest is not only the dominant carrier at BWI Marshall, but the region. “We’re No. 1, with 29%; American has 25%; United has 19%,” he said. “Between the three airports, we average 250,000 seats per week; then American has about 180,000.”

While those involved were optimistic from the word go, no one ever expected that kind of success.

“All told, Southwest and BWI has been a perfect marriage,” Zagarino said, “but nobody could have anticipated where this thing has gone.”

Business as Usual

As is the case with many success stories, there was a little luck involved, too. And lucky is just what BWI became when Southwest showed up, said Tom Parsons, CEO of BestFares.com, also of Dallas.

“Southwest wasn’t thinking big city, and Baltimore was the ideal size,” said Parsons. “That was the hub for USAirways (after it bought Piedmont), but USAirways didn’t do a good job, and Southwest moved in and gradually began serving smaller markets, then moved into the bigger cities. Now, there are few large cities Southwest doesn’t serve from BWI.”

So, just how big of a deal is Southwest at BWI? “It may be more important to Baltimore,” Parsons said, “than Delta is to Atlanta. And Southwest isn’t going anywhere. I can’t even imagine anyone trying to take them on.

“BWI Marshall is a chosen one,” he said, “and the locals have treated them well, too.” Today, Southwest’s mission is, basically, to keep on keepin’ on.

“There are a couple of things that we’re focused on,” said Harvey. “Minneapolis was the last Top 50 market that we did not serve, and now we’re there. Next, we’ll add flights” to those markets and focus on further expanding international service, much of which targets the Caribbean market since the AirTran purchase; and possibly, Parsons added, Anchorage and Hawaii.

Today, Southwest is simply “trying to grow as best we can to keep up with the demand,” Harvey said, by sticking with that successful formula: No bag fees, no change fees and lower fares.

“We’re not going to deviate from that approach,” he said. “Not to use a cliché, but the future looks very bright.”