San Diego Charging

June 20When Texas was booming during the era of high oil prices, airlines flocked to cities like Houston. Today, they’re flocking to California instead, as United’s capacity shift from Houston to San Francisco makes clear. Last week, Reuters reported that California has just surpassed France to become the world’s sixth largest economy, thanks to 4% annual output growth, roughly double the U.S. national average. But do airlines recognize the boom? You’d better believe it. Seat capacity from California airports next quarter, according to Diio Mi schedule data, is up a robust 9% y/y. Seats from Texas airports, by contrast, are down slightly. What’s driving the California boom? The thriving technology firms of the San Francisco Bay area, for sure, which have helped make all three of the area’s airports among the nation’s fastest growing. Los Angeles is attracting lots of new air service too. But interesting things are also happening in California’s third largest market: San Diego. Located two hours by road south of Los Angeles and not far from the Mexican border, San Diego has California’s third busiest airport after Los Angeles LAX and San Francisco SFO, and it happens to be the busiest single-runway airport in North America. Last year, it topped the 20m mark for passengers handled, rising 7% y/y, exceeding the 6% growth rates at both LAX and SFO. Through the first four months of this year, San Diego’s passenger counts are up 4%. The city’s metro area population of more than 3m people, its appeal to both leisure and business travelers, its high average incomes and the fact that it’s not a hub for any airline all make San Diego an ideal market for Southwest, which operates nearly 40% of the city’s departures. It’s growing there too, with seat counts next quarter up 6% y/y— it recently added a new route to Milwaukee, while increasing frequencies to St. Louis and Denver, among other markets. San Diego was also one of the many markets that received nonstop access to Dallas Love Field after Southwest was allowed to expand there. The airline’s busiest markets from San Diego, for the record, are Oakland, Las Vegas and Phoenix. The Big Three—American, Delta and United—all fly from San Diego to their hubs, nothing more, nothing less, and with stable y/y schedules. Smaller carriers, however, are providing some intrigue, and none more so than Alaska Airlines. Make no…

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