Southwest goes international, charts expansion
After 43 years of steadily expanding in the continental U.S., Southwest Airlines is going international.
The carrier is launching flights to three destinations in the Caribbean as it begins expansion into uncharted territory, adding international routes. The airline's first flight to the region took off Tuesday morning from Baltimore to Aruba.
"Our opportunity is to grow beyond the 48 states to all of North America, potentially, serving it all with 737s and even having the range to reach the northern part of South America," said Gary Kelly, CEO of Southwest Airlines.
While Southwest subsidiary AirTran has run flights to the Caribbean for several years, this is the first time expansion has been centered on the Southwest brand.
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It comes as several of the carrier's competitors are adding flights to the region.
"They face stiff competition from airlines such as JetBlue, American and Delta, but I think Southwest will bring lower fares and a lot of promotion and a great name and a great reputation," said Henry Harteveldt, an airline consultant with Atmosphere Research Group.
"I am not convinced [Southwest's flying to the Caribbean] will be an out-of-the-ballpark smash."
But fans of Southwest may disagree. For years, the airline has had some of the most loyal customers in the industry because of its low costs and laid-back style.
"It's huge for us," said Kris Corestine, of Rhode Island, who took the first Southwest flight from Baltimore to Aruba with her family. "It's nice to have the market open up a bit, because it has always been a little limited with flights."
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Mark and Jennifer Hopkins, from northern Virginia, said they hope flying Southwest to Aruba will make going to the Caribbean resort area more cost effective.
"We have a time share in Aruba," Hopkins said. "There are times we haven't gone because of the cost of the flight. Hopefully that will change with Southwest."
Service to the Caribbean is just the start of a steady expansion that Kelly envisions over the next decade.
Southwest eventually plans to add 50 destinations outside the continental U.S. The airline next year will launch international service from Houston Hobby, in Texas, the home state of competitor American Airlines.
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"That is a wonderful opportunity for growth," Kelly said. "We've also committed to build a five-gate international terminal in Fort Lauderdale. So we'll look across the United States and look at our positions of strengths."
Ultimately, Kelly said he believes his airline's growth will stem from its ability to lower fares.
"We believe we have better service, and we believe we have lower costs and better fares, and if we can do that, we can go into markets, lower fares, stimulate travel, and that's how we can expand," he said.
—By CNBC's Phil LeBeau.
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