What can we learn about Southwest Airlines based on Compete data
Written by Simon Schanche (contact - e-mail) -- December 6th, 2006 |
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Our readers are familiar with Compete’s ability to measure traffic and interaction across the internet. Compete’s clients are well aware of how to leverage this data to predict demand for specific automobiles, financial services and wireless products, but what about travel?
We all research our vacations online, most of us book our flights and hotels online, so it seems logical Compete can predict travel demand across airlines and hotels… but, what if Compete could measure demand at the regional level? Could Compete change the world? Probably not, but we could change the way airlines measure and improve their city, region, state and national operations.
The three largest airports in New England are in Boston, MA, Manchester NH, and Providence RI. While Southwest Airlines, the most successful low-cost carrier in the US, services Manchester and Providence, it does not fly into the region’s largest airport, Boston’s Logan Airport. Yet an examination of web traffic to the top airline sites shows that Southwest captures the highest level of research activity among Massachusetts residents. How can this be? A geographically segmented prospect share is a helpful way to better understand the hold that Southwest has on air travelers in Massachusetts.
| Share of Online Airline Research Activity in Massachusetts | |||
| Airline |
Market share
|
||
| Southwest |
23%
|
||
| Jetblue |
17%
|
||
| American Airlines |
13%
|
||
| Delta |
12%
|
||
| US Airways |
7%
|
||
| Air Tran |
5%
|
||
Viewing the behavior of airline shoppers at the state, county and even city levels, the impact of Southwest’s business strategy becomes visible. A Massachusetts county level analysis indicates that people living in counties of close proximity to Providence and Manchester have especially high research activity on southwest.com. Southwest was the #1 (representing 38% of the airline supplier market share in that region) researched airline by people living in Bristol County, MA and #2 (17%) among Norfolk County, MA users, not surprising given that they are the closest to Providence. Middlesex and Essex Counties, which are the closest to Manchester Airport, follow similar trends. Southwest is ranked #3 (13%) and #2 (17%) respectively. As you travel farther west in Massachusetts to Worcester County which is fairly equidistant between all 3 airports, Southwest is the #1 (30%) researched airline.
| Southwest Share of Online Airline Research Activity in Massachusetts | |||
| Location | County | Online Research Share |
Rank
|
| North of Boston | Essex | 17% |
2
|
| Middlesex | 13% |
3
|
|
| South of Boston | Barnstable | 23% |
1
|
| Bristol | 38% |
1
|
|
| Norfolk | 17% |
2
|
|
| Plymouth | 21% |
2
|
|
| West of Boston | Berkshire | 38% |
1
|
| Franklin | 36% |
1
|
|
| Hampden | 23% |
1
|
|
| Hampshire | 47% |
1
|
|
| Worcester | 31% |
1
|
|
But… the largest market in Massachusetts, Suffolk County, the home of Boston, Southwest is without a terminal. Not surprisingly, consideration of Southwest tanks, falling to the 7th ranked (5%) carrier.
We highlight this analysis because it exemplifies how the online channel has the ability to quantify detailed consumer demand. As our activities and expressed intention migrate online – what can’t we learn from online demand indicators?
Note: All data represents Q3 2006 Averages.
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December 6th, 2006 at 2:08 pm
I’ll admit I have never flown Southwest… Everytime I pass one of their loading terminals people are lined up like teenage girls at a Justin Timberlake concert… it’s less than appealing.
December 6th, 2006 at 4:28 pm
Simon,
Can you clarify how you’re defining “demand”?
I’m not sure you’re capturing or quantifying natural demand here with your Southwest example.
Are you aware that Southwest invests in considerable search engine optimization for even their press releases so that they end up in the top of search results for anything having to do with Low Cost Travel. The other airlines are not nearly so clever.
Or have you some other way to determine that their share of site traffic was true “demand” for researching Southwest?
Take a look at the differences in the Organic and Paid keyword searches by airline, or estimates of their on-line ad spends, and it gives you some additional “explanations” of the site traffic besides “demand”.
December 7th, 2006 at 10:30 am
Edw3rd, thank you for your reply.
In a recent survey of in-market travelers, 78% identified the Internet as their single most important source of travel information. Consequently, we see using online research as a proxy for travel demand as being highly accurate and effective.
Regional market demand has been measured by research sessions on airline carrier websites. As you mention, Southwest Airlines has performed well due in part to its ongoing online success.
December 7th, 2006 at 11:26 am
Agreed. We all use Search to research what we want. And people want Cheap Travel.
Your post just read to me as though the analysis showed people in certain areas were purposefully searching for Southwest, rather than responding to Southwest’s marketing messages. As I understand it, your data represents Traffic, not Brand Search Criteria.
My point was that people aren’t necessarily researching FOR Southwest Airlines, but rather finding, and clicking through to, Southwest because of their efforts - something I believe your data demonstrates.
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July 7th, 2007 at 5:07 am
Very nice information, I happen to be traveling on Thursday from Las Vegas to Philadelphia nonstop on Southwest. Looks like I did my homework.
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November 7th, 2007 at 7:37 am
Interesting article, if you want ot compare flights and hotels or find information on a holiday destination.
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