Southwest Airlines (SWA) and United Airlines (UA) squared off Tuesday in front of the Houston City Council over whether SWA should be allowed to launch international service from Houston Hobby (HOU) in 2015.
SWA, which carries more domestic US passengers than any other airline, last month announced plans to launch the first-ever SWA-branded international flights from HOU by mid-decade. HOU is a domestic-only airport; all of the city’s international flights operate to/from Houston Intercontinental (IAH), a hub dominated by UA in the aftermath of the UA-Continental Airlines merger. Both airports are owned by the City of Houston.
UA is pushing back hard against allowing SWA to launch flights to Mexico, the Caribbean, and Central and South America from HOU, claiming the service “will drain passengers from … IAH, resulting in a net loss of 3,700 jobs and $295 million in gross regional product annually in the Houston region.”
But SWA, which is advocating for construction of a new five-gate, $100 million international facility at HOU to be paid for by ticket fees, said the expansion “would open up new low-cost international travel competition to the area,” adding in an online statement, “It won’t cost the City of Houston a dime, but it will bring in more than $1 billion of additional revenue annually. It will also create thousands of new jobs and help continue to grow the Houston economy. The downside? There isn’t one—unless you’re Chicago-based United Continental Airlines and want to maintain a stranglehold on the international air service from Houston.”
SWA already has a formidable domestic presence at HOU.
UA commissioned Massachusetts Institute of Technology International Center for Air Transportation research engineer William Swelbar and University of Houston economics professor Barton Smith to study opening up HOU to international flights. UA said its study shows that a study done by the Houston Airport System (HAS) in support of adding international flights at HOU “used flawed assumptions to reach unrealistic conclusions that the proposal would be good for Houston.”
Smith said, “Competition is always good, but there is already plenty of competition at [IAH] where it can take advantage of the enormous economies of scale associated with a large hub. Diminishing the volume of connecting flights through [IAH] could be very damaging. The HAS study finding that Southwest Airlines’ proposal would actually increase trips through [IAH] is just sheer nonsense.”
Article Source : ATW Daily News
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