Southwest Considers Moving HQ To PHX

EyeInTheSky

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Dec 2, 2003
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Southwest considers move to Valley by Mike Sunnucks, The Business Journal of Phoenix

7:00 p.m. ET Feb. 26, 2006 Southwest Airlines Co. is in discussions with Phoenix officials, including Mayor Phil Gordon, regarding a move of major operations to Arizona from the company's Dallas base.

Southwest has approximately 5,500 workers at Dallas' Love Field Airport, including its corporate headquarters, maintenance operations, flight simulators and training centers.

Officials at the low-cost airline still are upset with federal flight restrictions related to Love Field and threatened late last year to move their headquarters and other operations out of North Texas to another major commercial center such as Houston, Baltimore, Las Vegas, Chicago or Phoenix if those rules are not changed. Those markets all are major hubs for Southwest.

Southwest executives have met with city officials, managers at Phoenix Sky Harbor International Airport and economic developers regarding a possible move to Phoenix. That includes a conference call and face-to-face meeting with Gordon, said city of Phoenix spokesman Scott Phelps.

Phelps said discussions include a possible headquarters move and relocation of other Southwest divisions from Dallas to Phoenix.

Such a move would be a huge economic victory for Phoenix, a region that long has been short on big corporate names. It also could be a substantial win for Gordon, a moderate Democrat who has pushed an aggressive economic development agenda for the city since taking office.

Southwest already has major flight and other operations in Phoenix and more than 4,200 workers in the Valley.

SWA and Tempe-based US Airways Group Inc. are the largest two carriers at Sky Harbor and Las Vegas' McCarran international airports. Southwest has large maintenance operations in Phoenix as well as a customer service center.

Phelps said Gordon talks to Southwest Chief Executive Gary Kelly on a routine basis throughout the year, but recent meetings included discussions of possible relocation of operations to Phoenix.

"We always are in conversations with Southwest Airlines to expand their operations at Sky Harbor," said Phelps. "With Southwest having the largest single operation at Sky Harbor, we talk with them constantly."

Southwest spokeswoman Paula Berg said she is not familiar with meetings regarding Arizona, and she said there is a lot of speculation regarding the airline's possible move.

The Greater Phoenix Economic Council, the region's main business attraction arm, declined to comment on a possible Southwest relocation to Phoenix.

"We can't make any comments on the record about Southwest," said Janet LaBar, spokeswoman for GPEC.

Southwest has more than 31,000 employees companywide and has been the most financially stable and successful airline in the turbulent times since the Sept. 11, 2001, terrorist strikes. It has turned a profit despite high fuel prices, increased airline taxes and security fees and a highly competitive industry landscape.

But Southwest wants to repeal the Wright Amendment so it can begin offering long-haul service out of Love Field in Dallas.

The Wright Amendment is a federal rule that limits flights from Dallas' Love Field Airport to short-haul trips to a handful of states bordering or near Texas.

Last year, Southwest spokeswoman Whitney Eichinger said without the changes, SWA may have to relocate its base out of Dallas.

Southwest officials, including executives such as Kelly, also argue that lifting the Wright restrictions would boost competition to Western cities and help lower fares in Texas and other markets, including Phoenix.

Arizona Sen. John McCain, who has fought to lift airport restrictions in New York and Washington, D.C., also wants to repeal the Wright Amendment.

American Airlines and Dallas/Fort Worth International Airport oppose Southwest's efforts, preferring the discount airline fly out of DFW Airport instead.

The move would be a big win for Sky Harbor, which is embarking on major growth and has been embroiled in a row over high travel costs incurred by some city of Phoenix employees.

If Southwest moves more jobs and operations to Phoenix, that would put even more competitive pressure on US Airways, which counts SWA as one of its rivals. It also would give Phoenix more business cache nationally. The region enjoys strong job growth but is not home to well-known corporate headquarters -- with exceptions being Phoenix-based PetSmart, US Air and Dial Corp.
 

hp_fa

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Feb 19, 2004
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Southwest considers move to Valley by Mike Sunnucks, The Business Journal of Phoenix

...

Officials at the low-cost airline still are upset with federal flight restrictions related to Love Field and threatened late last year to move their headquarters and other operations out of North Texas to another major commercial center such as Houston, Baltimore, Las Vegas, Chicago or Phoenix if those rules are not changed. Those markets all are major hubs for Southwest.


...

IMO, Southwest is not going anywhere and the whole reason this issue is even being discussed is that one paragraph. Call it a hissy fit from WN. I do not believe they are doing anything more then pressuring themselves into the repeal of the Wright Amendment.

There is one other collateral issue that doesn't get discussed much because it is a local Arizona issue and that is the issue of the City of Tempe and its running dispute with Sky Harbor Airport. In short, Tempe chronically complains about the noise from the airport despite the airport having been there since the 1920's and Tempe has knowingly allowed residential development to occur into the known flight paths from Sky Harbor. On top of that, Tempe is (as we all know) the HQ for US Airways and had been the headquarters for America West for around 20 years. Add that, plus all the economic benefit Tempe has reaped from having that airport in close proximity to ASU, Motorola, Intel, etc., and you can see why I am so chronically disgusted at the City of Tempe.

Anyway, I can't see WN moving anywhere.
 

bofie

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Mar 22, 2004
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What would it mean for Usairways and PHX?

It would mean that there would actually be a low cost carrier HQd in PHX.

But it ain't gonna happen. Just a bluff to worry the burghers in Dallas.
 

jimntx

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Jun 28, 2003
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Well, there is also the issue that it just came to light that the City of Dallas Aviation Department has been subsidizing SWA flights at DAL by charging only 35 cents/lb landing fees. The fees at DFW are something like $4.94/lb.

The City Council just hiked the landing fees to a whole 55 cents/lb. Of course, SWA spin on this is that the City Council hiked the fees 57% in one huge jump. A minority of the Council wanted to hike fees to $1.40/lb which was the average nationwide for airports of similar size and flight frequency. SWA said they would move immediately if fees were raised that far.
 

PhxMama

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Oct 29, 2005
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Well, there is also the issue that it just came to light that the City of Dallas Aviation Department has been subsidizing SWA flights at DAL by charging only 35 cents/lb landing fees. The fees at DFW are something like $4.94/lb.

The City Council just hiked the landing fees to a whole 55 cents/lb. Of course, SWA spin on this is that the City Council hiked the fees 57% in one huge jump. A minority of the Council wanted to hike fees to $1.40/lb which was the average nationwide for airports of similar size and flight frequency. SWA said they would move immediately if fees were raised that far.
Let them move! I cant imagine where their building would be located that wouldn't involve alot of $$$$ having to be spendt.
 

deltawatch

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Aug 20, 2002
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Why don't they consider PHL. Southwest luv's PHL. They should make a major commitment to the city and the people that live there, move all 5000 Dallas employees to this key Southwest market.
 
Never going to happen. And the people in DAL know that they're bluffing, so they haven't blinked. It's the people in PHX/HOU/MDW/etc that are delusional, thining they have a chance and getting all excited.

"We always are in conversations with Southwest Airlines to expand their operations at Sky Harbor," said Phelps. "With Southwest having the largest single operation at Sky Harbor, we talk with them constantly."

Largest "single" operation. That's some nice spin. HP + Mesa (and now + US) are bigger.
 

mrman

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Sep 10, 2002
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Let them move! I cant imagine where their building would be located that wouldn't involve alot of $$$$ having to be spendt.

Wn wouldn't pay for the move and the infrastructure, the city would in return for the ability to tax for property tax purposes the WN fleet (soon to be over 500 aircraft) + maintenance hangers, and employees through increased property taxes on housing

Why don't they consider PHL. Southwest luv's PHL. They should make a major commitment to the city and the people that live there, move all 5000 Dallas employees to this key Southwest market.

No new business are moving to PHL. PHL is a dieing city. PHL has taxed themselves out of the market. Very few cities have personal income taxes + state taxes. If you want to see the effect, just drive up Broad Street and see the war zone.
 

rjh

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Aug 22, 2005
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If WN were to move their HQ to PHX, I seriously doubt it would have much of an impact on US. The only thing that would happen is the possibility of losing some good employees to WN. But--they already have a huge presence, so it's not like they would increase their flight schedule here just because HQ is located here as well.

I would welcome them moving here . .2 major airlines being based here would be a great advantage to the city & the metro area.
 

careerfurloughee

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Apr 7, 2004
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If you want to watch SWA backpedal start talking about closing Love field. Wasn't that really what the Wright Amendment intended in the first place? Commercial traffic moving to DFW?
 
Not to stir the pot but if you actually read the articles it was the city of PHX that came to SWA and they proposed we move HDQ's to PHX not SWA soliciting bids..

And as for the landing fees at DAL vs DFW, that is a whole different ball of wax. The Federal Government if I understand it correctly; states that airports can only charge landing fees that cover expenses and puts money in the bank for future needs of the airport. And that money CAN NOT be diverted into other city accounts.

So DFW is a bigger airport and has higher costs so the landing fees are higher.

And for what its worth, before 9/11 the DAL airport actually had a surplus of funds.. Its because of the increased security transit times and me pull down of flights by SWA because its easier to drive for some folks now due to security, the airport is now running a little short.

When the Wright Amendment goes away, you will see DAL making money hand over fist as SWA will be able to fly more profitable routes and carry more passengers.