This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Southwest Invading Minneapolis Stronghold

Of all the airline industry's fortress hubs, Minneapolis is perhaps the most impregnable.

But now Southwest (LUV - Get Report) wants to fly there. The largest low-fare carrier says it will begin taking passengers between Minneapolis-St. Paul International Airport and Chicago's Midway Airport next March.

Why enter territory that is 80%-controlled by one carrier? Simple, Southwest CEO Gary Kelly explained on an earnings conference call. "It is a very high-fare market," he said. "One-way fares are as high as $400, and it's a short-haul market."

Currently Northwest, now part of Delta (LUV - Get Report), handles nearly fourth-fifths of the travelers at Minneapolis, and it has long been considered the most aggressive carrier in defending its turf. Already, it operates 10 daily flights between Minneapolis and Chicago's O'Hare and a half dozen more to Midway.

On Northwest's third-quarter earnings call, Executive Vice President Tim Griffin seemed to relish the Southwest challenge on fares.

"Fares change quickly, and can be changed quickly," Griffin warned. "I don't think that many competitors make entries into an area based on revenue per available seat mile performance that they are seeing from others, because those conditions can change fairly quickly." RASM is a common industry measure that reflects fare revenue.

Minneapolis, the nation's 14th-busiest airport with 35 million passengers in 2007, offers several attractions for Southwest. Among them, it can feed passengers into Chicago's Midway Airport, the second-busiest airport in the Southwest system. In fact, the top destination from Minneapolis is Chicago, according to the Bureau of Transportation Statistics.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
LCC $0.00 0.00%
DAL $45.39 1.95%
LUV $44.22 2.27%
AAPL $129.09 0.49%
FB $79.75 0.99%


DOW 18,288.63 +155.93 0.86%
S&P 500 2,117.39 +12.89 0.61%
NASDAQ 5,008.0960 +44.5690 0.90%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs