What can we learn about Southwest Airlines based on Compete data

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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