Chart of the Day: When Southwest Comes Calling, On-Time Performance Goes South


Here’s an interesting, unintuitive tidbit about the airline market. When Southwest enters a market, it forces incumbent carriers to lower their fares. No surprise there. But according to a recent study, it does more than that. It also reduces everyone’s on-time performance:

All three conventional measures of arrival delay indicate that airlines begin responding to the threat of entry before Southwest even threatens the route; incumbents’ on-time performance begins to worsen before Southwest actually enters the second endpoint airport, and it continues to do so following Southwest threatening the route, and following entry, as well.

As the chart on the right shows, average travel time for flights starts to increase sharply about four quarters before Southwest begins service in a new market, eventually rising by two minutes three quarters after service begins. The number of flights more than 15 minutes late rises from 18 percent to about 21 percent. Why? The authors find the same effect when other airlines enter a new market, but only if the new competitor is a low-cost carrier. Their guess? Pretty much what you’d expect: “Incumbents worsen [on-time performance] in an effort to cut costs in order to compete against Southwest’s low costs.”

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DEMOCRACY DOES NOT EXIST...

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In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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