May 24--Southwest Airlines has revealed a key piece of its international flight strategy, announcing plans to build a five-gate facility at Houston's Hobby Airport.
Houston Mayor Annise Parker and Southwest President and CEO Gary Kelly said an agreement with the city, subject to Houston City Council approval, would enable Southwest to fly to Mexico, the Caribbean and cities in Central and South America.
Southwest, the busiest air carrier at Las Vegas' McCarran International Airport, has 134 daily flights to and from Houston and more than 2,700 employees there.
Southwest currently operates 33 flights a week between Las Vegas and Houston Hobby.
Under Southwest's proposal, the five-gate expansion and a Customs and Border Protection facility would be financed by Southwest at no cost to the City of Houston. No passenger facility charges are required in the agreement, no debt will be issued by the city and no general revenue funds will be tapped for the arrangement. The Associated Press reported that Southwest had committed $100 million for the project.
"There is still much work to do, but I believe our proposal shows that we are committed to bringing international service to Hobby without the city taking on additional debt," Kelly said in an announcement.
Kelly said construction was expected to take a couple of years and Southwest expected to begin international service sometime in 2015.
Southwest said other airlines would be able to use the international gates at Hobby.
The proposal was opposed by Chicago-based United-Continental, which offers international flights from George Bush Houston Intercontinental Airport.
In a separate announcement, Southwest also confirmed that it had reached a tentative agreement with Delta Air Lines and Boeing Capital Corp. to sublease its fleet of 88 Boeing 717 jets currently used by Southwest subsidiary Air Tran Airways.
Under its current plan, Southwest would transfer three of the twin-engine 717 jets per month to Delta beginning in mid-2013, completing the transition by 2015. Southwest plans to keep the size of its fleet constant by replacing the transferred 717s with Boeing 737 jets.
The deal must first be approved by Delta's pilot union.
The airline has indicated it would use the 717 jets to replace its fleet of 50-passenger commuter jets.
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