Posted on Tue, Oct. 28, 2003
Southwest to start Philadelphia flights
By Bob Fernandez and Tom Belden
Inquirer Staff Writers
In a surprise move, Southwest Airlines - the nation's largest discount air carrier - is expected to announce today that it will begin scheduled service at Philadelphia International Airport in May, according to top airport officials.
The entry by Southwest, with initially about 40 daily flights, almost guarantees that airline passengers long in the grip of high fares in Philadelphia will see a sharp fall in the price of flights to cities Southwest serves.
The move also will likely threaten financially ailing US Airways by drawing business from it and forcing it to lower some fares. The airline, one of the region's largest employers, with 5,500 workers, provides service to 58 percent of the passenger traffic here.
City Aviation Director Charles J. Isdell, 53, called the addition of Southwest the biggest change in the airport "in my lifetime," and said it likely would lead to vastly more people in the region flying.
Southwest's fares often attract people who otherwise might drive to their destination or not travel at all, experts say. When Southwest started service from Baltimore a decade ago, for example, passenger traffic went up by 300 percent to 800 percent on routes that had only non-discount service before.
A low-fare strategy has made Southwest - somewhat of a Wal-Mart of the skies - the second-largest airline in the nation, behind Delta, in number of passengers carried and the fifth-largest measured by annual revenue.
City officials plan to hold a news conference today at the airport, where Southwest chairman Herbert D. Kelleher is scheduled to announce Southwest's plans. The airline, however, is not expected to disclose today the routes it will initially fly. Those details are likely to be released in December, airport officials said yesterday.
The announcement is being made in the last days of a contentious mayoral race, and is likely to be touted as an example of Mayor Street's efforts to expand the city's economy. He is in a close reelection campaign against Republican Sam Katz, who has criticized Street as lacking an ability to schmooze with businessmen and bring companies to the city.
Southwest would not comment yesterday on its plans for Philadelphia.
An aggressive push by Southwest into Philadelphia is likely to spell hardship for US Airways, an airline with strong market positions on the East Coast but high costs. US Airways' operating costs per passenger mile flown are 60 percent higher than Southwest's. US Airways also has reported huge financial losses since the Sept. 11, 2001, terrorist attacks, and has eliminated almost one-third of its workforce nationwide.
"We are always concerned about US Airways in terms of their viability," Isdell said. But "even if we did not want [Southwest] to come in, to protect US Airways, we have no legal right to stop them."
Southwest's move comes as a surprise for two reasons.
The airline usually does not try to compete in airports that are entrenched hubs of other major carriers, as Philadelphia's is.
In addition, Kelleher had downplayed the likelihood of the airline coming to Philadelphia in an interview with The Inquirer seven months ago. He said that the airport was congested and that such an addition could throw a wrench in its on-time performance, a source of pride with the airline.
Philadelphia, like many other cities, had made repeated overtures to Southwest, imploring it to start service. But this summer, the Dallas-based company began talking secretly with Philadelphia officials after gates became available in Terminal E, and those negotiations moved quickly, Isdell said yesterday.
Southwest initially will use four gates at the end of Terminal E that had been leased to American Airlines, Isdell said. American relinquished the rights to those gates in 2002, he said. "That's almost a windfall of gate capacity we didn't know we were going to have," he said.
Southwest normally uses each of its airport gates for eight to 10 flights a day, airport chief of staff Jeff Shull said. He said there was a potential to expand the number of gates available to Southwest if the airline needed them.
Using Terminal E will enable Southwest to land one of its 737 jets, unload, board new passengers, and taxi out for takeoff, all in about 30 minutes - its standard flight turnaround at most airports. Terminal E offers the ability to accomplish that because its is near the east end of the airport, where jets usually start their takeoff roll.
Southwest, which started as a Texas intrastate airline in 1971, is highly respected in the airline business because it has perfected a way to keep operating costs low. It uses only one kind of plane, the Boeing 737, which keeps maintenance and crew-training costs down. It serves no meals and has no reserved seats, which are among the reasons it can land and take off again as quickly as it does.
About 80 percent of Southwest's employees are unionized, but it has labor contracts that make them more productive than workers at many other airlines. Ticket agents, for instance, may also load bags. Flight attendants clean aircraft cabins between trips, while other major carriers have other employees or contractors do it.
Kelleher, a native of Haddon Heights and a lawyer by training, said in the interview in April that he considered the foundation of Southwest to be treating employees and customers alike with respect.
"It's the people's airline, you might say," Kelleher said. "That's why we use the signature line 'a symbol of freedom.' We wanted all our people to know that every day... they were doing something that was very important to society, enabling people to fly who otherwise couldn't afford to fly, or fly more often then they otherwise could."
Southwest to start Philadelphia flights
By Bob Fernandez and Tom Belden
Inquirer Staff Writers
In a surprise move, Southwest Airlines - the nation's largest discount air carrier - is expected to announce today that it will begin scheduled service at Philadelphia International Airport in May, according to top airport officials.
The entry by Southwest, with initially about 40 daily flights, almost guarantees that airline passengers long in the grip of high fares in Philadelphia will see a sharp fall in the price of flights to cities Southwest serves.
The move also will likely threaten financially ailing US Airways by drawing business from it and forcing it to lower some fares. The airline, one of the region's largest employers, with 5,500 workers, provides service to 58 percent of the passenger traffic here.
City Aviation Director Charles J. Isdell, 53, called the addition of Southwest the biggest change in the airport "in my lifetime," and said it likely would lead to vastly more people in the region flying.
Southwest's fares often attract people who otherwise might drive to their destination or not travel at all, experts say. When Southwest started service from Baltimore a decade ago, for example, passenger traffic went up by 300 percent to 800 percent on routes that had only non-discount service before.
A low-fare strategy has made Southwest - somewhat of a Wal-Mart of the skies - the second-largest airline in the nation, behind Delta, in number of passengers carried and the fifth-largest measured by annual revenue.
City officials plan to hold a news conference today at the airport, where Southwest chairman Herbert D. Kelleher is scheduled to announce Southwest's plans. The airline, however, is not expected to disclose today the routes it will initially fly. Those details are likely to be released in December, airport officials said yesterday.
The announcement is being made in the last days of a contentious mayoral race, and is likely to be touted as an example of Mayor Street's efforts to expand the city's economy. He is in a close reelection campaign against Republican Sam Katz, who has criticized Street as lacking an ability to schmooze with businessmen and bring companies to the city.
Southwest would not comment yesterday on its plans for Philadelphia.
An aggressive push by Southwest into Philadelphia is likely to spell hardship for US Airways, an airline with strong market positions on the East Coast but high costs. US Airways' operating costs per passenger mile flown are 60 percent higher than Southwest's. US Airways also has reported huge financial losses since the Sept. 11, 2001, terrorist attacks, and has eliminated almost one-third of its workforce nationwide.
"We are always concerned about US Airways in terms of their viability," Isdell said. But "even if we did not want [Southwest] to come in, to protect US Airways, we have no legal right to stop them."
Southwest's move comes as a surprise for two reasons.
The airline usually does not try to compete in airports that are entrenched hubs of other major carriers, as Philadelphia's is.
In addition, Kelleher had downplayed the likelihood of the airline coming to Philadelphia in an interview with The Inquirer seven months ago. He said that the airport was congested and that such an addition could throw a wrench in its on-time performance, a source of pride with the airline.
Philadelphia, like many other cities, had made repeated overtures to Southwest, imploring it to start service. But this summer, the Dallas-based company began talking secretly with Philadelphia officials after gates became available in Terminal E, and those negotiations moved quickly, Isdell said yesterday.
Southwest initially will use four gates at the end of Terminal E that had been leased to American Airlines, Isdell said. American relinquished the rights to those gates in 2002, he said. "That's almost a windfall of gate capacity we didn't know we were going to have," he said.
Southwest normally uses each of its airport gates for eight to 10 flights a day, airport chief of staff Jeff Shull said. He said there was a potential to expand the number of gates available to Southwest if the airline needed them.
Using Terminal E will enable Southwest to land one of its 737 jets, unload, board new passengers, and taxi out for takeoff, all in about 30 minutes - its standard flight turnaround at most airports. Terminal E offers the ability to accomplish that because its is near the east end of the airport, where jets usually start their takeoff roll.
Southwest, which started as a Texas intrastate airline in 1971, is highly respected in the airline business because it has perfected a way to keep operating costs low. It uses only one kind of plane, the Boeing 737, which keeps maintenance and crew-training costs down. It serves no meals and has no reserved seats, which are among the reasons it can land and take off again as quickly as it does.
About 80 percent of Southwest's employees are unionized, but it has labor contracts that make them more productive than workers at many other airlines. Ticket agents, for instance, may also load bags. Flight attendants clean aircraft cabins between trips, while other major carriers have other employees or contractors do it.
Kelleher, a native of Haddon Heights and a lawyer by training, said in the interview in April that he considered the foundation of Southwest to be treating employees and customers alike with respect.
"It's the people's airline, you might say," Kelleher said. "That's why we use the signature line 'a symbol of freedom.' We wanted all our people to know that every day... they were doing something that was very important to society, enabling people to fly who otherwise couldn't afford to fly, or fly more often then they otherwise could."
