By: Dan Reed and Marilyn Adams, USA TODAY

April 4, 2006, USA Today

Discount king Southwest Airlines (LUV) this fall will bring its brand of no-frills, low-fare service to Washington Dulles airport. It will be the second United Airlines (UAUA) hub that Southwest has invaded this year.

Southwest, which launched service in early January at Denver, another United (UAUA) hub, looks for "markets that are overpriced and underserved," Southwest CEO Gary Kelly said Tuesday in a conference call with reporters announcing the service. The demise of short-lived Independence Air, which was based at Dulles, creates "lots of opportunity," he said.

Independence Air shut down Jan. 5 after 18 months of trying to compete as a low-fare airline against United.

Southwest only signaled its intent on Tuesday by formally requesting two gates in Dulles' B concourse. It didn't release a detailed plan for Dulles, leaving questions, for example, about where it intends to fly from there.

But based on Southwest's development pattern at other airports, Kelly said, it likely will begin service in the early fall with 10 to 12 daily flights to four or five destinations.

"Southwest always starts small in a new market, but they get big pretty fast," said Aaron Gellman, a professor at Northwestern University's Transportation Center.

Kelly said Southwest noticed that Independence Air generated lots of consumer interest in the booming Northern Virginia business market. Southwest, he says, has low enough operating costs and the marketing heft to thrive there. Southwest is the industry's low-cost leader, and the largest U.S. carrier in terms of domestic passenger boardings.

United, with its affiliates Ted and United Express, carries about 60% of all passengers at Dulles.

United spokeswoman Jean Medina said her airline welcomes the competition. "We compete vigorously everywhere we fly."

Southwest entered the Denver market, United's No. 2 hub, in January with 13 daily flights from two gates. That will increase to four gates and up to 40 departures under its announced growth plans. Southwest also competes with United's largest hub at Chicago O'Hare Airport by offering 200 flights a day from Chicago Midway Airport.

Mo Garfinkle, a Washington, D.C.-based airline consultant, said Southwest's move is "not welcome news" for United. "Every single United hub now has low-cost carriers — and formidable ones."

Kelly said the move into Dulles won't diminish Southwest's plans to continue growing at nearby Baltimore/Washington Thurgood Marshall airport, where Southwest has 165 daily departures from a new 26-gate terminal.