Southwest Plans Service to Dulles

Still, Kelly acknowledged that Southwest is aware that other low-fare carriers are also growing at the most desirable airports. "In terms of growing our business, we can't be complacent," he said. "There are carriers out there growing actively nationwide."

Aviation consultant Mike Boyd said the pressure is on Southwest to expand in places where it can quickly stimulate the most traffic, because even Southwest is impacted by the airline industry's brutal combination of high fuel prices and a harshly competitive fare environment.

"It used to be that Southwest could go anywhere and fill an airplane," Boyd said. "Now they want to go to places where they can fill an airplane right out of the box, and they want to get there before AirTran (AAI Quote) and JetBlue (JBLU Quote)."

"This is a whole new world for Southwest," Boyd said. "They have to react, to go to markets they never dreamed of before. Southwest is now a carnivore. They have to go into other people's hubs because that's where the traffic is."

Dulles is a hub for UAL (UAUA Quote) unit United Airlines, which has nearly 300 daily departures from the airport, including 20 international departures to 18 destinations. Until Flyi shut down, Dulles was its hub.

In a previous life, Flyi was Atlantic Coast Airlines, a regional carrier that operated as United Express. But it balked when United sought, during a three-year stay in bankruptcy, to reduce the cost of its Express contracts.

The northern Virginia area near Dulles includes three of the nation's fastest-growing counties, Loudoun, King George and Caroline. Aviation consultant Darryl Jenkins, an area resident, said that Flyi managed to lure some passengers who had previously driven to Baltimore to fly on Southwest.

"Flyi was loved here because of its prices," he said. "Now, Southwest is moving to block any potential competitors."