Southwest's Expansion Gets Mayor's Backing, But It's Not A Done Deal Yet
by: Edel Howlin, May 23, 2012 3:05:00 pm
You may hear more of these red and blue airplanes taking off from William P. Hobby Airport now that the deal seems to have been finally ironed out between Southwest Airlines and the City of Houston.
"Southwest Airlines has agreed to pay for all of the expenses associated with building this expansion."
Mayor Annise Parker was happy to deliver the news and an excited crowd in the main Hobby terminal was clearly delighted to receive it. So now we know Southwest Airlines will pay for the entire one hundred million dollar expansion, but what’s in the plan.
Mayor Parker again:
"They’re constructing five gates, they’re only asking for preferential use of four of those gates. That fifth gate will be available to other carriers who choose to fly out of Hobby Airport. And they will have access to the new Federal Immigration and Customs station that they will be constructing as part of this airport."
Southwest CEO Gary Kelly was smiling by Mayor Parker’s side and when it came his turn to speak, he joked about having second thoughts about their plan.
"Mayor, as I was listening to you, you describe all the wonderful things that we’re gonna do for the City of Houston. I was thinking, I probably need to fire myself, because it does sound too good to be true. But that’s the way we do business at Southwest Airlines."
Southwest will have a 25 year lease, but Kelly hopes the airline will make back its initial investment long before that. In the meantime, he believes it’s the customer who will benefit straight out of the gate.
"Houston has suffered from monopoly airfares to Mexico, Central America, the Caribbean and South America long enough. We will bring lower fares; we will bring more competition. It will be more jobs and we’re very, very excited about all of those opportunities."
United Airlines continues to argue that this deal between Southwest and the City of Houston is not a smart one. However Mayor Parker reaffirmed her commitment to both airports by offering a rebate incentive to airlines who wish to use Hobby for international flights.
"The agreement would allow a rebate of airport revenues for every additional passenger that is brought that would not otherwise be serviced by this airport. We want to incent the growth of both airports in the city of Houston that carry commercial passengers."
Tony Chase is Chairman of the Greater Houston Partnership. He believes United will be able to hold it’s own should this deal get the green light.
"They are a fierce competitor in the global airlines market and I believe that they simply competed hard for their place in this market and I’m sure they’ll continue to compete hard."
Whether United will have to ready itself to compete with Southwest’s new international terminal at Hobby will be officially voted on at City Council next week.