The Air War at My Front Door

I live in a war zone.

Fortunately, there's no barbed wire, no rationing, no rubble, and no gunfire. And yet there will be casualties. Profits will go scarce as UAL Corp.'s (Nasdaq: UAUA  ) United Airlines squares off against Southwest (NYSE: LUV  ) in a fare war in my hometown of Denver.

Southwest fired the first shot. On Jan. 4, the Dallas-based carrier said it will offer a free ticket to any passengers buying "Business Select" fares to and from Denver, the Denver Business Journal reports.

United fired back yesterday: Colorado residents who book travel originating in their home state by Feb. 14, and which is completed by March 5, can earn a free ticket for future domestic or international travel. UAL calls it the "deal of the decade" in a promotional email. I'm not sure about that, but that's not what matters. More interesting is that United isn't pulling any punches.

"There's no limit to how many free flights you can earn, and as a special thank you, you'll receive two complimentary North America upgrades after your first flight is complete," the email reads.

This isn't terribly surprising. Denver International Airport is one of United's largest hubs, and its been targeted not just by Southwest but also Republic Airways (Nasdaq: RJET  ) as an additional base of operations. Republic acquired Denver's Frontier Airlines last year, after it entered Chapter 11 bankruptcy.

But Denver is also just a battle in a broader war that's being fought as much on television as anywhere else. That's where you'll see Southwest chiding legacy carriers such as Delta (NYSE: DAL  ) , AMR's (NYSE: AMR  ) American, and US Airways (NYSE: LCC  ) over baggage fees and other service charges.

"Up in the Air" isn't just an acclaimed movie, Fools. It's a tag line that best describes the fluctuating state of the airline industry -- a mess that Southwest hopes to profit from.

Will the carrier succeed, or is Southwest cut from the same mold as its larger, legacy peers? Make your voice heard using the comments box below.

Fool contributor Tim Beyers is also a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares of any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy wants to get away. It wants to fly away.


Read/Post Comments (3) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 12, 2010, at 4:15 PM, jsamans wrote:

    I think Southwest is about to dig deep into United's pockets, and that's bad news for United given how little cash is in those pockets as it is.

  • Report this Comment On January 13, 2010, at 9:30 AM, Fool wrote:

    United Shuttle tried to go head to head with Southwest in California some years ago, and well...there is no longer a United Shuttle and Southwest is the dominant carrier in CA. Southwest has deep cash pockets and in my opinion the best customer service of any airline hands down.

  • Report this Comment On January 20, 2010, at 2:26 AM, Fool wrote:

    Southwest is great...if you enjoy being herded into the aircraft as if your cattle. As far as customer service, it used to be great, but now I feel as if I'm an inconvienence to the customer service agents or flight attendants if I even ask them a question. I think they've gotten to big for themselves, and need to take a good long hard look at their customer service training and operation.

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