Southwest Airlines Co. will begin a new service between New York's LaGuardia Airport and Chicago Midway Airport on June 28, 2009. The airline will offer five daily nonstop flights on the key business route.
Southwest's rivals are feeling the pressure as they cut fares by as much as 50 percent below year-ago levels. Neither American Airlines nor United Airlines seem willing to cede business, with a United spokesman saying, "we welcome the competition."
A year ago, the cheapest roundtrip fares on United and American from O'Hare to LaGuardia were about $300 for a 14-day advance purchase, according to FareCompare.com. After briefly dropping last week to $152, they returned to $178 this week, matching Southwest.
While business travelers now have more options on the low end than ever before, others are less enthusiastic about the new route. Southwest's Chicago-New York route "has the potential to make a bad situation worse," says Hunter Keay, a Baltimore-based analyst at Stifel Nicolas & Co.