June 07, 2006

Why Capitalism And Competition Are Good

Having never flown Southwest--it had not had a presence in Denver--it must be said that I can't personally vouch for the intrinsic quality of the airline itself, but its mere presence the past few months certainly provides another example of the way in which the invisible hand of capitalism and, in this case, competition have improved the Denver market by introducing the "Southwest effect" of lower fares and greater choice in airlines and departure flexibility:
The little airline that revolutionized the industry is expanding its business in Denver.

While some of the so-called legacy airlines such as United, American and Delta are cutting flights and raising fares, Southwest is adding flights and forcing fares down.

Rival airlines call it the "Southwest effect" -- when the airline comes to a city, targets destinations popular with local travelers and draws in passengers from other airlines with low fares that other airlines may be forced to match.


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