The fight over international flights from Houston

Marketplace Contributor May 22, 2012

The fight over international flights from Houston

Marketplace Contributor May 22, 2012

Jeremy Hobson: As soon as next week, Southwest Airlines could get clearance to build a brand new international terminal at Houston’s Hobby airport. But United Airlines — which has a huge hub at another Houston Airport — is appealing to city officials
to keep the plan grounded.

From KUHF in Houston, Gail Delaughter reports.

Gail Delaughter: If you want to get an international flight out of Houston, you have to drive about 20 miles to the north to what locals call the “Big Airport,” Bush Intercontinental. Now discount carrier Southwest wants to start flying to Mexico and the Carribean. And to do it, Southwest wants to build an international terminal at Hobby Airport. It’s a smaller facility about 12 miles south of downtown.

United Airlines has launched a huge protest against the move.

John Gebo: In every other example that we look at in this country where you have a split international gateway, that international gateway tends to stagnate or decline.

John Gebo is United’s Sr. Vice President of Financial Planning. The airline did a study that shows the local economy could lose $300 million if international passengers are divided between two airports.

Gebo: Houston has built a very strong connecting hub complex at Intercontinental over the course of the last 40 years. And what that hub complex brings to the city is the ability for airlines, including United, to offer a larger number of flights and a larger number of direct destinations.

The Houston Airport System also did a study. It predicts the local economy would gain about $1.6 billion. Southwest CEO Gary Kelly told a city council committee the airline doesn’t want special treatment. It just wants to do business.

Gary Kelly: We’re not asking for tax credits or abatements. We are in essence merely asking you to negociate with us for an amendment to our use and lease agreement.

So why is United fighting so hard against the plan?

Rice University business professor Doug Schuler says it’s all about competition from an airline that offers cheaper flights. He says United is going to do all it can to try to persuade city officials not to allow the new terminal.

Doug Schuler: They’re going to say, we’re legacy carriers. We the ones who serve all these mid-sized cities and the budget carriers aren’t going to go there.

If officials in the country’s fourth-largest city approve Southwest plans, then Houston would join other major cities that have a second international gateway.

In Houston, I’m Gail Delaughter for Marketplace.

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