Second Houston International Airport?

[Trae]

I really don't think United has much of an argument here (it'd be different if the corporate HQ was still here). There is nothing they can do to stop Southwest. With the amount of gates and flights that Southwest plans to operate daily, it shouldn't hurt the international businesses at IAH much. With growth in the Houston region, United is still going to have to go through expansion plans at IAH anyway. This will only create cheaper airfare to Latin America and the Caribbean for Houston area travelers. I'm all for it. For screwing with Houston and moving both the corporate AND operational HQ to Chicago, the terrible service they have brought to IAH, as well as the higher airfare prices, United deserves this piece of karma. Even the Mayor down in Houston has commented on the "service" of United.

A proposal by Southwest Airlines to offer international flights from Hobby Airport has triggered an intense lobbying duel with United Airlines, which still wields considerable local clout as the successor to Houston-based Continental.

If it gets city approval, Southwest says it would spend an estimated $75 million to $100 million to build a new international terminal equipped with full-scale Customs facilities, as well as to improve the aging airport's domestic terminals. Southwest flights would depart from the new terminal to destinations such as Cancun and the Caribbean.

But United has already broken ground on what may become another international terminal, a $700 million investment piled on top of an additional billion it has pumped into Bush Intercontinental Airport since the late 1990s.

United says this town isn't big enough for both projects.

While the city awaits two consultants' reports, expected next week, on the pros and cons of Hobby going international, both airlines have dispatched emissaries to City Hall. The outcome of their lobbying battle will determine whether Houston becomes the sixth among the nation's 10 largest cities to have two full-scale, international airports.

Mayor Annise Parker and the Houston Airport System director, Mario Diaz, have not publicly picked a side. They say only that they're obligated to listen to Southwest's pitch.
"The airport is not in the position of choosing winners and losers," Diaz said. "We're in a position of laying down a level playing field."

In letters to airport officials in the past week, United has argued that the deal would damage the economy by diluting international traffic at Bush - traffic United depends on to fill overseas flights, many of which originate elsewhere. Those flights create jobs and boost trade by making Houston accessible from spots across the globe, United said in a letter to Parker.

Increased competition

Southwest argues that its plan would create jobs and decrease airfares because United - which dominates local flights to Latin America - would face more competition.

"More passengers will fly to IAH because fares will be lower and that will stimulate demand at both airports," said Ron Ricks, executive vice president for Southwest.

More: http://www.chron.com/news/houston-texas/article/War-between-United-Southwest-looms-over-Houston-3414923.php#page-1

[plinko]

The outcome of their lobbying battle will determine whether Houston becomes the sixth among the nation's 10 largest cities to have two full-scale, international airports.

I had to think about the 5 others and figured I would list them (I get 6)...any others?

JFK/EWR/LGA
MIA/FLL
MCO/SFB
SFO/OAK/SJC
LAX/SNA (SNA only offers service to YVR and seasonal service to YYC on Westjet)
ORD/MDW

Wait till Southwest applies for international service from Love Field. That ought to start a sh*tstorm.

[dimondpark]

I had to think about the 5 others and figured I would list them (I get 6)...any others?

JFK/EWR/LGA
MIA/FLL
MCO/SFB
SFO/OAK/SJC
LAX/SNA (SNA only offers service to YVR and seasonal service to YYC on Westjet)
ORD/MDW

Wait till Southwest applies for international service from Love Field. That ought to start a sh*tstorm.

What about Dulles, BWI and Reagan National?

[Rail Claimore]

Why the hell is UA so scared of WN in a market like Houston? FL has been flying international out of ATL for years and DL couldn't care less. It basically screams that UA is a weak airline.

[plinko]

What about Dulles, BWI and Reagan National?

Doh! I knew I forgot one.

[Kngkyle]

Why the hell is UA so scared of WN in a market like Houston? FL has been flying international out of ATL for years and DL couldn't care less. It basically screams that UA is a weak airline.

They're not, but it's good business to make it as difficult as possible for Southwest.

[atlwarrior]

What about Dulles, BWI and Reagan National?

International
airports

[Trae]

They're not, but it's good business to make it as difficult as possible for Southwest.

United is definitely scared. Now they are going to have to lower their prices ay IAH, instead of charging high prices, making IAH one of the most expensive airports in America.. I hope the city let's the Texas company do whatever it wants.

[ColDayMan]

International
airports

Dulles & BWI are international.

[Kingofthehill]

And Reagan has non-stop service to Montréal, Toronto, Halifax, Ottawa, Nassau, and Bermuda. I believe these destinations all have preclearance, though.

[Tom In Chicago]

For screwing with Houston and moving both the corporate AND operational HQ to Chicago, the terrible service they have brought to IAH, as well as the higher airfare prices, United deserves this piece of karma. Even the Mayor down in Houston has commented on the "service" of United.

Is this fact or just anecdotal? I've been flying through Houston every month for over a year now and my experience is that service has been excellent. . . what higher airfare prices are you referring to? United almost always beats Southwest for the destinations I'm flying. . . perhaps it's because I'm flying in and out of ORD but I'm always comparing prices and United is almost always as cheap or within a few dollars of the other big carriers. . .

. . .

[yaga]

Is this fact or just anecdotal? I've been flying through Houston every month for over a year now and my experience is that service has been excellent. . . what higher airfare prices are you referring to? United almost always beats Southwest for the destinations I'm flying. . . perhaps it's because I'm flying in and out of ORD but I'm always comparing prices and United is almost always as cheap or within a few dollars of the other big carriers. . .

. . .

Service is subjective but here are two recent articles in the Houston Chronicle about less than stellar service at IAH since the merger became official.

Mayor Parker's flight delays came at bad time for airline
Copyright 2012 Houston Chronicle.
By Chris Moran and Kiah Collier
Updated 09:17 p.m., Monday, March 19, 2012

Talk about a bad time to keep the mayor waiting at an airport.

United Airlines is trying to block a proposal by Southwest Airlines to begin international flights out of Hobby Airport. But while United's lobbying team was pressing its case at City Hall last week, the airline delayed Mayor Annise Parker on her departing and returning flight from San Francisco....

http://www.chron.com/default/article/Mayor-Parker-s-flight-delays-came-at-bad-time-for-3419254.php



Travelers report crowds, delays at United terminal
Copyright 2012 Houston Chronicle
By Carol Christian and Kiah Collier
Updated 10:07 p.m., Saturday, March 10, 2012

Travelers Saturday reported frustration with long lines and delays at United Airlines, which is in the process of merging with Continental Airlines.

Louise Joy, an Austin resident flying from Houston to Honduras for a family vacation, said confusion at George Bush Intercontinental Airport Saturday morning was the worst she'd seen in 10 years of flying on the first day of spring break.

Her family arrived at 8 a.m. Saturday, well ahead of their scheduled 10:30 a.m. flight. They found hundreds of people waiting to get inside the terminal, she said.

After half an hour, they were still outside the terminal, she said. They made it to the departure gate on time because they had pre-printed boarding passes, but five other relatives they met up with at the airport did not.

"This is an absolute nightmare," Joy said, from inside the plane, waiting to take off. "We had such expectations for United, but this is probably going down as one of the worst (situations) they've ever had."....

http://www.chron.com/default/article/Travelers-report-crowds-delays-at-United-terminal-3397108.php

[glowrock]

Is this fact or just anecdotal? I've been flying through Houston every month for over a year now and my experience is that service has been excellent. . . what higher airfare prices are you referring to? United almost always beats Southwest for the destinations I'm flying. . . perhaps it's because I'm flying in and out of ORD but I'm always comparing prices and United is almost always as cheap or within a few dollars of the other big carriers. . .

. . .

I've flown in and out of Houston fairly often for a number of years now, and really, nothing's changed recently at IAH. The airport still sucks (at least Terminals A-B-C, D & E are really nice!), and it's still kind of a mish-mash of expansions over the decades. That being said, I haven't noticed any real price differences recently, and service on United is the same as on Continental, which means bad. Same for Southwest, same for Frontier, USAir, Delta, etc... etc... Let's face it, flying domestically SUCKS, but it's sucked for many years now! :yes:

Much of the attacks on United from Houstonians is simply because Continental is no longer officially based there, that's all.

Aaron (Glowrock)

[Rail Claimore]

I've flown in and out of Houston fairly often for a number of years now, and really, nothing's changed recently at IAH. The airport still sucks (at least Terminals A-B-C, D & E are really nice!), and it's still kind of a mish-mash of expansions over the decades. That being said, I haven't noticed any real price differences recently, and service on United is the same as on Continental, which means bad. Same for Southwest, same for Frontier, USAir, Delta, etc... etc... Let's face it, flying domestically SUCKS, but it's sucked for many years now! :yes:

Much of the attacks on United from Houstonians is simply because Continental is no longer officially based there, that's all.

Aaron (Glowrock)

No US airline has service of a consistent quality that can match some Euro and Asian carriers, but certain airlines seem to have a propensity for bad service. In my experience, this has always been with US and UA.

[N830MH]

What about Dulles, BWI and Reagan National?

Actually, DCA is a perimeter rule. Only IAD & BWI will fly international flights. DCA does not have CBP facility. Only BWI & IAD does have CBP facility.

[N830MH]

And Reagan has non-stop service to Montréal, Toronto, Halifax, Ottawa, Nassau, and Bermuda. I believe these destinations all have preclearance, though.

Right, they do have US preclearance from Canada, Bermuda & The Bahamas, too. DCA does not have CBP facility.

[Trae]

Is this fact or just anecdotal? I've been flying through Houston every month for over a year now and my experience is that service has been excellent. . . what higher airfare prices are you referring to? United almost always beats Southwest for the destinations I'm flying. . . perhaps it's because I'm flying in and out of ORD but I'm always comparing prices and United is almost always as cheap or within a few dollars of the other big carriers. . .

. . .

The bad service has been explained, but IAH is one of the most expensive airports to fly out of. It's cheaper to take a trip from Latin America out of Newark, than it is at IAH, fot example, which is suppose to be their "Latin American gateway". Southwest beats any legacy carrier. I cant find a cheaper United ticket than what i would pay using Southwest.

[OhioGuy]

No US airline has service of a consistent quality that can match some Euro and Asian carriers, but certain airlines seem to have a propensity for bad service. In my experience, this has always been with US and UA.

I've always had good service with United. Rarely have I dealt with flight delays and I don't think I've ever missed a connection. And I flew upwards of 40,000 miles in 2010 and approximately 22,000 miles last year, exclusively on Star Alliance flights (United, Continental, and US Airways).

I wonder what time Mayor Parker arrived at SFO for her return flight to Houston? Since the airlines have rules you need to be checked-in at least 45 minutes prior to departure, I can't blame them for moving her family back to the next available flight. The airlines have to know how many people are flying to determine how much to fuel the plane. If people aren't checking in until less than 45 minutes before departure, that can create delays for the airline.

And as for her delays going to SFO, I wouldn't be surprised if they were weather-related. The airport has some of the strictest weather rules out there. Since they use dual runways and must land side-by-side in order to hit the max arrival capacity for SFO, pilots must maintain visuals at a higher altitude than most airports. For example, scattered clouds below ~3200 feet can lead to major arrival delays while at most airports this wouldn't cause the slightest problem. Usually an actual ceiling (broken or overcast skies) below 1000 feet is the threshold for potential flight delays at most airports, but SFO is a special case. United has a team of very knowledgeable meteorologists who do their best to forecast ceilings (and wind patterns) every day at SFO. In fact, they're tasked with forecasting the clearing down to the half hour in some cases so that an increase in the arrival rate can be scheduled at that time. I'm very familiar with this as I used to forecast the weather at SFO for United.

[Kingofthehill]

IMO, the one domestic airline that manages to rise above the fray is Virgin America. Brand new Airbus a319/320s, leather seats, mood lighting, extensive IFE, onboard outlets, fun, easygoing staff, cool terminal and lobby areas, etc. They really are as good as it gets when it comes to domestic travel. American/United/US Scareways/etc have dated on-board products and offerings, stupid nickel and dime fees for the smallest of amenities, and old, grumpy, menopausal staff. Not to mention aging, unrenovated jets, and small, cramped regional jets on long-ish routes:

[bunt_q]

Hey, I am all for Houston screwing with United however they can. Because there's another United hub an hour and a half north of there in Denver more than willing to pick up some of that international traffic (with an expansion already underway).

By the way, I'm not sure what Houston is complaining about. That's one of the airports I prefer to connect through if I have to. It's certainly nicer than most, and I've never had any trouble with United. They're a thousand times more pleasant than Southwest's buses with wings.

[k1052]

IMO, the one domestic airline that manages to rise above the fray is Virgin America. Brand new Airbus a319/320s, leather seats, mood lighting, extensive IFE, onboard outlets, fun, easygoing staff, cool terminal and lobby areas, etc. They really are as good as it gets when it comes to domestic travel. American/United/US Scareways/etc have dated on-board products and offerings, stupid nickel and dime fees for the smallest of amenities, and old, grumpy, menopausal staff. Not to mention aging, unrenovated jets, and small, cramped regional jets on long-ish routes:

I'll agree with this. My travel from ORD to SFO and LAX has picked up in recent years and I always flew American. Once Virgin started service I haven't been back on AA on these routes as the pricing has almost always been better and the flight experience/cabin crew is far superior.

As for United....if they had the last plane out of hell I wouldn't get on it.

[glowrock]

No US airline has service of a consistent quality that can match some Euro and Asian carriers, but certain airlines seem to have a propensity for bad service. In my experience, this has always been with US and UA.

I don't know, Rail Claimore. I've flown on pretty much all the domestic carriers (United/US Air/Northwest/Southwest/Continental/American/America West/Frontier/Delta/AirTran/etc...), and I have yet to notice a large difference between any of them. They pretty much ALL suck. It seems to be more of an airport issue than an airline issue in many situations, though. Some airports are simply more prone to cancellations and long delays than others. :(

Aaron (Glowrock)

[Trae]

Hey, I am all for Houston screwing with United however they can. Because there's another United hub an hour and a half north of there in Denver more than willing to pick up some of that international traffic (with an expansion already underway).

By the way, I'm not sure what Houston is complaining about. That's one of the airports I prefer to connect through if I have to. It's certainly nicer than most, and I've never had any trouble with United. They're a thousand times more pleasant than Southwest's buses with wings.

Is Denver really a better location for United to route their connections for Latin American flights, too? I don't think Denver's location is better than Houston's. Besides, United has already screwed with Houston by taking both the headquarters and operational headquarters away (couldn't even leave one). They are already locked into the billion dollar plus investment at IAH, that started with Continental. There is no way they are going to abandon it, and they are clearly bluffing. Other airlines would gladly come in and take the market share in a growing metro both economically and population wise. United basically wants to continue their monopoly, which is what people in Houston are complaining about (they increased ticket prices after the merger at IAH). I'm not even sure that if Continental was still HQ'ed here, if the city would not still consider what Southwest is proposing.

[Trae]

The Greater Houston Partnership is getting behind Southwest. Huge blow to United:

The Greater Houston Partnership is backing a plan to expand Hobby Airport that would allow for international flights.

The Partnership’s Business Issues Committee voted unanimously to support the plan to add five gates and a Customs facility to the airport. Southwest Airlines is pushing the plan so it can start flying to Mexico and the Caribbean. The Partnership’s board of directors is expected to adopt a resolution in support of Hobby expansion by the end of next week. “This is a critically important issue for Houston. We want two vibrant airports and the benefits that go along with it: more jobs, more travelers and a competitive advantage for our city,” said Tony Chase, chairman of the Partnership. United Airlines, which dominates the Latin American market from its base at Bush Intercontinental Airport, has fought the proposal. Company officials and consultants have argued that dividing the city’s international air traffic will cost jobs and routes.

A city consultant’s study concluded that the Hobby plan will create 10,000 jobs and inject $1.6 billion into the local economy. Having the most prominent voice in the Houston business community behind the Hobby plan is another blow to United, which merged with Houston hometown airline Continental in 2010. In pressing its case, United has been drawing on the good will and trust Continental generated as an active corporate citizen for decades. The Partnership’s immediate past board chairman is Larry Kellner, who was CEO of Continental from 2004 to 2009. The Partnership’s airports task force is chaired by Michelle Baden, United’s managing director for international and state affairs and a registered lobbyist for the airline at City Hall.

But the Partnership still backed the Southwest position.

“GHP has carefully deliberated on how increased competition changes the landscape within airport systems, having reviewed and analyzed extensive data and listened intently to representatives from the Houston Airport System, city of Houston, United and Southwest,” said Jeff Moseley, president and CEO of the Partnership. “We intend to keep working with all airlines and parties to protect and grow our region’s airports.”

City Council is scheduled to vote next month on the Hobby expansion plan.
http://blog.chron.com/houstonpolitics/2012/05/greater-houston-partnership-supports-hobby-expansion/

Southwest continues to play the "we are a Texas company" angle when lobbying for the Hobby expansion and it is no doubt working.

FORTUNE -- United Continental Holdings is learning the hard way that it isn't wise to mess with Texas. The recently merged airline's decision to choose Chicago as its corporate headquarters over Continental's hometown of Houston appears to have resulted in a big loss of political capital with the city and its airport authority. The move could end up hitting United's bottom line hard as rival Southwest Airlines targets Houston to be its first international hub.

There are a lot of unintended consequences when it comes to merging two companies, especially two major international airlines. When Chicago-based United (UAL) announced its merger with Houston-based Continental at the end of 2010, the decision to move the newly combined airline's headquarters up to Chicago wasn't given much thought. United had struck what it had said was a sweetheart tax and rental deal with Chicago city officials a year earlier to keep the airline's headquarters in the Windy City in the event of a merger with a rival airline. Houston, apparently, never had a chance.

The loss of Houston as Continental's headquarters meant moving most of its major corporate functions to Chicago. Continental's then chief executive, Jeff Smisek, not even a year into the job, became the combined airline's chief executive. Smisek was quick to make the move out of Houston but the mood at Continental's headquarters in downtown Houston was somber, as much of the staff did not want to move to Chicago......

.....But all that intangible political capital was trashed when the airline merged with United. The loss of the Continental name was bad enough for the city, but the loss of the headquarters was a big blow to its ego. While Houston is still United's largest hub with over 17,000 employees living and working in the city, the loss of the C-suite appears to have been an unforgivable sin.

Southwest Airlines (LUV) is hoping to cash in on United throwing away its golden goose. It has brazenly asked Houston's airport authority to pay nearly $100 million to upgrade Hobby to receive international flights. The upgrade would allow Southwest to use Hobby to launch truly competitive international air service to the same locations where Continental has held an almost near-monopoly in non-stop service for years. This would, invariably, force Continental to lower prices on competing routes or to even pull out of some them completely if Southwest is able to put enough pressure on its margins.

This possible Southwest expansion also has larger implications for the airline industry. Southwest inherited international air service to a few destinations south of the border and to the Caribbean when it acquired AirTran in 2010. It has just started to put plans in motion to expand international service - under the Airtran banner, for now - launching routes to Mexico from Orange County, CA and San Antonio, TX. But unlike those locations, Houston is a major hub for Southwest and is seen as a major gateway to Latin America. If Hobby does go international, Southwest will be able to fill its Latin America-bound planes with passengers from any of the 36 domestic destinations it already serves through Hobby.
http://features.blogs.fortune.cnn.com/2012/04/17/united-southwest-houston/

An article from Bloomberg:

Southwest’s plan would create Houston competition for some flights to Latin America, the region where United posts its highest yields, or average fare per mile, according to data compiled by Bloomberg. Latin America produced a bigger gain in first-quarter yields than routes in the U.S. or across the Atlantic and Pacific, United said.
http://www.bloomberg.com/news/2012-05-03/united-fights-southwest-in-texas-to-keep-grip-on-busy-hub.html

And here are some excerpts from United's "study":

United has added more flts to IAH than any of its other hubs since the merger and IAH has grown more since 1996 alone than Hobby has in total current flying.

The comparison to the MIA/FLL situation is invalid because it neglects the fact that AA dismantled its San Juan hub during the same period to increase MIA, and that AA Latin traffic is actually down overall from where it was.

The comparison to ORD/MDW is also invalid since it ignores that Mexicana ceased operation in this period, that carriers were only backfilling, and total Latin traffic is actually down.

Comparison of multi-international airport cities in both Europe and the US show that multi-international airport cities have seen no growth or actually shrunk, while single international airport cities have seen growth.

United would pull 6% of current capacity and 4% of planned capacity as a result of loss of connecting traffic to support routes that Houston O&D doesn't warrant and/or are already unprofitable but supported by overall network. Future planned routes that would not be flown include Asia/Pacific, Transatlantic, and South America. Auckland and China are specifically cited as examples of routes that cannot be supported by Houston O&D alone, and would be harmed by shifting connecitng traffic on network supporting flights.
http://keepiahstrong.com/docs/UnitedStudyMay3.pdf

lmao. United's scare tactics are so easy to see. It is really ridiculous.

[Rail Claimore]

Doesn't matter really. Short of an act of Congress similar to the Wright Amendment, the city can't really get in the way if WN wants to expand at HOU, unless it wants to lose out on federal funds and/or have a legal mess on its hands.

City must consider Southwest plan for Hobby, lawyers say
By Chris Moran
Updated 12:17 a.m., Tuesday, May 8, 2012

...

The city could reject a proposal for Hobby to go global only if the airport did not have the capacity to accommodate international flights, if noise or other environmental concerns could not be overcome or if public safety were threatened, Diaz said. None of those conditions apply in the case of Southwest's plan, Diaz said.

"Southwest Airlines is very aware of its rights to airport access under federal law, having battled for such access time and time again over the past 40 years. We look forward to a full vetting and understanding of these issues," said Paul Flaningan, a Southwest spokesman.

...



http://www.chron.com/news/houston-texas/article/City-must-consider-Southwest-plan-for-Hobby-3540934.php

[Kngkyle]

I really don't see this as having much of an effect on United. United will either just cut some of the routes Southwest starts or dump capacity on them and make them unprofitable for Southwest. I'm pretty sure that United has a cost advantage over Southwest now due to bankruptcy labor concessions. I know when Virgin America started flying 2x daily from Chicago to San Francisco, United responded by going from something like 9 daily flights to 16 daily flights.

Ultimately I'd say United needs Houston more than Houston needs United. The city seems to know this, but should be somewhat cautious not to overdo it because although United won't dehub Houston, United can certainly shift capacity around and perhaps cut some long-haul international routes that Southwest isn't going to make up for.

[Trae]

I really don't see this as having much of an effect on United. United will either just cut some of the routes Southwest starts or dump capacity on them and make them unprofitable for Southwest. I'm pretty sure that United has a cost advantage over Southwest now due to bankruptcy labor concessions. I know when Virgin America started flying 2x daily from Chicago to San Francisco, United responded by going from something like 9 daily flights to 16 daily flights.

Ultimately I'd say United needs Houston more than Houston needs United. The city seems to know this, but should be somewhat cautious not to overdo it because although United won't dehub Houston, United can certainly shift capacity around and perhaps cut some long-haul international routes that Southwest isn't going to make up for.

United isnt dumping anything. Houston is growing too fast and there is too much growth in the energy industry and the Latin American population. If United drops it, some other airline will pick it up. Southwest's new 737 planes are going to have more range anyway.

[Kngkyle]

United isnt dumping anything. Houston is growing too fast and there is too much growth in the energy industry and the Latin American population. If United drops it, some other airline will pick it up. Southwest's new 737 planes are going to have more range anyway.

So far United has cut more than 50 daily flights from Houston, 30 of which were just this week, including service to Paris. They don't take effect for a few months still, but have been loaded into the schedule.

Looks like Smisek wasn't bluffing.

Meanwhile, United announced lots of new flights from other hubs today:
SFO to Taipei and Paris
ORD to Monterry MX, Thunder Bay ON, Nassau, Jackson MS, Anchorage
LAX to Kelowna BC
DEN to Williston
IAD to San Salvador

[GrimReaper]

http://ronenews92fm.files.wordpress.com/2012/05/photo-1-3.jpg