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Alaska Airlines opposes SW move to Boeing Field
Thursday June 23, 11:01 am ET
If Southwest Airlines moves its Seattle operations to Boeing Field from Sea-Tac, Alaska Airlines may consider breaking off some flights from Sea-Tac and moving those to Boeing Field as well.
Alaska Air Group (NYSE: ALK - News) officials estimate that a move to King County International Airport by rival Southwest Airlines will add an extra $11 million in annual costs for Alaska Airlines, to pay an increased share of the various Sea-Tac International Airport improvement projects.
"We're very opposed to having to take on that extra cost burden," said Joe Sprague, vice president of government and public affairs for Alaska Airlines. "They (Southwest Airlines) would have a significant cost advantage."
With Southwest Airlines moving roughly 3,800 passengers a day out of Sea-Tac, or about 1.4 million a year, this differential alone could improve Southwest's financial load by nearly $10 per passenger.
But at the same time Southwest's costs would be expected to fall at King County International Airport, more commonly known as Boeing Field, as it escapes the higher per-passenger fees that are currently in place at Sea-Tac.
Southwest spokesman Ed Steward said per-passenger fees his company pays average $5 per passenger, across the U.S. system.
The savings at Boeing Field might add up to "a tremendous amount of money...millions and millions," Steward said, although he added that the airline can't be more specific until it knows what the capital costs there will be.
The implications of higher costs for Alaska, when it's already struggling to turn a profit and to compete against the likes of Southwest, are a key reason why Alaska executives sent a letter to the King County Council Wednesday, asking them to refrain from investing money in Southwest's proposed move to Boeing Field.
"We're asking them to reject any efforts to bring this about," Sprague said. While under FAA rules any airline is allowed to move to an airport like Boeing Field, Sprague argues that lack of active engagement from county government "is certainly going to slow the momentum."
Port of Seattle Commission president Bob Edwards contends that Southwest only pays $7 per per-passenger now, and will only be paying a bit more than $11 per per-passenger when the third runway opens.
He argues that allowing Southwest to move to Boeing Field will increase costs through the regional transportation system, and will force local authorities to duplicate the $500 million the port already has spent on noise mitigation in the area around Sea-Tac. He projects that flights out of Boeing Field could grow to triple Southwest's current volumes, as other carriers -- including possibly Alaska -- also move to Boeing Field to compete.
He said Alaska has a relatively high percentage of flights that originate here, instead of being connecting flights, and those might be appropriate for shifting to Boeing Field.
Currently Alaska Airlines handles about 150 departures from Sea-Tac daily, or 4.5 million to 5 million passengers annually, said Alaska spokeswoman Amanda Tobin.
Thursday June 23, 11:01 am ET
If Southwest Airlines moves its Seattle operations to Boeing Field from Sea-Tac, Alaska Airlines may consider breaking off some flights from Sea-Tac and moving those to Boeing Field as well.
Alaska Air Group (NYSE: ALK - News) officials estimate that a move to King County International Airport by rival Southwest Airlines will add an extra $11 million in annual costs for Alaska Airlines, to pay an increased share of the various Sea-Tac International Airport improvement projects.
"We're very opposed to having to take on that extra cost burden," said Joe Sprague, vice president of government and public affairs for Alaska Airlines. "They (Southwest Airlines) would have a significant cost advantage."
With Southwest Airlines moving roughly 3,800 passengers a day out of Sea-Tac, or about 1.4 million a year, this differential alone could improve Southwest's financial load by nearly $10 per passenger.
But at the same time Southwest's costs would be expected to fall at King County International Airport, more commonly known as Boeing Field, as it escapes the higher per-passenger fees that are currently in place at Sea-Tac.
Southwest spokesman Ed Steward said per-passenger fees his company pays average $5 per passenger, across the U.S. system.
The savings at Boeing Field might add up to "a tremendous amount of money...millions and millions," Steward said, although he added that the airline can't be more specific until it knows what the capital costs there will be.
The implications of higher costs for Alaska, when it's already struggling to turn a profit and to compete against the likes of Southwest, are a key reason why Alaska executives sent a letter to the King County Council Wednesday, asking them to refrain from investing money in Southwest's proposed move to Boeing Field.
"We're asking them to reject any efforts to bring this about," Sprague said. While under FAA rules any airline is allowed to move to an airport like Boeing Field, Sprague argues that lack of active engagement from county government "is certainly going to slow the momentum."
Port of Seattle Commission president Bob Edwards contends that Southwest only pays $7 per per-passenger now, and will only be paying a bit more than $11 per per-passenger when the third runway opens.
He argues that allowing Southwest to move to Boeing Field will increase costs through the regional transportation system, and will force local authorities to duplicate the $500 million the port already has spent on noise mitigation in the area around Sea-Tac. He projects that flights out of Boeing Field could grow to triple Southwest's current volumes, as other carriers -- including possibly Alaska -- also move to Boeing Field to compete.
He said Alaska has a relatively high percentage of flights that originate here, instead of being connecting flights, and those might be appropriate for shifting to Boeing Field.
Currently Alaska Airlines handles about 150 departures from Sea-Tac daily, or 4.5 million to 5 million passengers annually, said Alaska spokeswoman Amanda Tobin.
