The problem for WN is nearly every route they could serve already has 2-3 airlines on it. I'd agree with them setting up shop with BWI/MDW/PHX/DEN/MCO/LAS in the first few years and seeing how things play out. Had they beaten F9 and/or G4 to the punch, they might've had more room to grow. LGA won't happen because of slots; they want to start CMH-LGA but can't for that reason. For as big a station as it is, CMH only has seasonal HOU service.
I was about to post a similar sentiment. I wonder if WN is kicking themselves for not committing to CVG earlier? Had they made the move earlier, I could see CVG having DEN, LAS, Florida routes and others on WN. Now, they are in the same boat as DL. They are adding (or would be adding in the case of WN) routes as a reaction to what others are already doing. In other words they are in a position of chasing other carriers off to establish themselves rather than bringing something new to the table.
So where could WN go? Maybe DAL. Maybe STL (but I wonder if there is sufficient traffic to justify such a route). BOS? That would be interesting but you are going head to head with DL. Is Delta expensive on that route? It seems all the other cities being bandied about have service on those routes (including OAK). I just don’t see CVG as being able to support multiple carriers to the same destination. I wish we could but it’s not reality.
WN is definitely late in the game, but I don't know that they have to chase other carriers off the route. I am not so sure all the routes are too crowded though. The best example is probably, CVG-DEN, which had three carriers on it. G4 subsequently announced the route, which was pretty baffling (CVG is still G4's only regular link to DEN). However, they have done extremely well on the route with over 90% loads, even with DL continuously adding more seats on the route.
Right now, with some exceptions (which I will discuss below), every route from CVG has multiple carriers and fares far below the national average. As a result, carriers are adding lots of seats to meet demand and increase profits. This is a stark change from when DL purposely suppressed capacity to sell less tickets, but at a higher price. Of routes were becoming unprofitable, the carriers would be subtracting flights, not adding. The seat volumes for 2018 are already up over 2017 by 16%, that is over 1.2 million new seats for 2018. It does not sound like CVG is at a mature passenger level yet.
The routes with little to no competition right now are JFK, BOS, MKE, MCI, XNA, STL, BNA, MSY, SAN, SEA, SAT, PIT, and BDL. There are some routes like CVG-BDL/XNA which serve a niche business market. Then you have DL's monopoly routes such as CVG-BOS/MKE/MCI/STL/BNA/SEA. I frankly can't see WN entering any of them. A common one to bring up is BOS, which DL chargers insanely high fares, but they also put an immense amount of seats on the route (2xB738, 2xCR9 at peak). If WN were to try to enter with its large aircraft, I think DL would flood the route with 4xB738 and drive WN out. The only carrier I see having a chance is B6 because of their smaller aircraft size and loyalty in BOS to take the BOS-CVG traffic, while DL could take the CVG-BOS traffic. The rest of the routes have too low PDEW for WN and I have no doubt we will be seeing DL on some (if not all) of these routes in the near future: MSY/SAN/SAT/PIT. Domestically, CVG already has nonstop service to every corner of the US, MEM/PDX are really the only two holes left, and I could see DL picking up both (or perhaps F9 to PDX).
As for WN expansion, I think they need to reduce MDW/BWI and add 1x/day to DEN/LAS/PHX/TPA/MCO. It is not a lot, but it is all I can see them adding at the moment. Yes these routes are crowded, but when current carriers are getting over 90% loads on these routes, there is still room for more flights.
CVG's pax are rapidly growing but we are just catching up to IND/CLE/PIT, which I think are all going to join the 10 million ranks in the next few years. PIT/CLE should just edge out CVG, which I think will narrowly surpass IND for 2018. A fact that is not often reported by CVG is that local traffic is growing, but it is still below the peak from the late 90's (pre 9/11). Since the region has grown and more people are going to be able to fly due to income increases, I think we are not yet at the ceiling for growth.