I'd say that a good chunk of IAH traffic will move to DEN. Southwest protested Den City Council's DIA fee reductions because UAL will get the lion's share of the reductions.
http://www.bizjournals.com/denver/news/2012/05/21/denver-council-oks-united-airlines.html
Denver council OKs United Airlines cost cuts at DIA despite objections from Southwest, Frontier
Denver Business Journal by Ed Sealover, Reporter
Date: Monday, May 21, 2012, 9:12pm MDT - Last Modified: Tuesday, May 29, 2012
Under the deal approved Monday, United's lease payments at DIA would fall by $22 million a year on the condition that it grows its total available seat miles flown from the Denver airport by 4.5 percent by 2016.
The Denver City Council voted unanimously Monday night to lower the cost of United Airlines United Airlines operating at Denver International Airport Denver International Airport, despite protests from competitor airlines, as long as the airline increases its business at DIA over the next four years.
The move came just a week after Councilwoman Debbie Ortega flagged the agreement and questioned whether the deal proposed with United, DIA's largest carrier, was legal.
Both Frontier Airlines and Southwest Airlines, the second- and third-largest carriers at the airport, had asked the council to suspend action on the proposed agreement, arguing that it violated federal law by giving disproportionate economic benefits to one airline.
But on Monday, Ortega was one of several council members who said that, after studying the issue, they believe DIA is in the right because the deal drops costs for all airlines but imposes growth requirements only on United and forces that airline to pay penalties if it doesn't meet them.
And DIA Chief Commercial Officer John Ackerman said that airport leaders have offered to work with Frontier, Southwest and other airlines on similar amendments to their leases if they are needed.
> MORE: United Airlines to launch Denver-Tokyo flights, says report
"It's back to the question of what is being done to ensure a level playing field," Ortega said before backing the deal, addressing her comments specifically to Southwest and Frontier. "There is an opportunity for you all to work with the city. I would encourage you to come forward and ... work with the staff of DIA if you want to see certain things addressed."
United -- a unit of Chicago-based United Continental Holdings Inc. (NYSE: UAL) -- reduced the passenger capacity on its flights 10 percent near the end of 2011 and indicated it needed to reduce its roughly $150 million annual lease with DIA as well.
So, city officials worked out a deal under which United's lease payments would fall by $22 million a year on the condition that it grows its total available seat miles flown from DIA 4.5 percent by 2016.
If not, it must pay $100 million back to the airport.
The deal, which involved DIA using unallocated cash balances to pay off about $100 million in debt for the airport's baggage system and for unused space in the basement of the United-dominated Concourse B, also benefits all other airlines at the facility.
Frontier's lease payments will drop by about $2 million per year and Southwest's by about $1 million annually because of the reduction of debt, Ackerman said.
But in letters written to DIA leaders, both airlines said the greater benefits to United were discriminatory and a violation of federal law.
Several council members repeatedly asked DIA officials Monday if paying off of the debt on the baggage system and Concourse B space would mean that airlines on all concourses would be treated equally now.
Ackerman said it would, because such debt was paid off for Concourse A airlines in 2000 and because Concourse C airlines never incurred the debt in the same way.
"Good job!" Councilman Chris Herndon said in response.
Any airline that feels injured by the deal now has the opportunity to file an action with the Federal Aviation Administration, said Helen Berkman, assistant director for the airport legal services division of the Denver City Attorney's office.
http://www.bizjournals.com/denver/news/2012/05/21/denver-council-oks-united-airlines.html
Denver council OKs United Airlines cost cuts at DIA despite objections from Southwest, Frontier
Denver Business Journal by Ed Sealover, Reporter
Date: Monday, May 21, 2012, 9:12pm MDT - Last Modified: Tuesday, May 29, 2012
Under the deal approved Monday, United's lease payments at DIA would fall by $22 million a year on the condition that it grows its total available seat miles flown from the Denver airport by 4.5 percent by 2016.
The Denver City Council voted unanimously Monday night to lower the cost of United Airlines United Airlines operating at Denver International Airport Denver International Airport, despite protests from competitor airlines, as long as the airline increases its business at DIA over the next four years.
The move came just a week after Councilwoman Debbie Ortega flagged the agreement and questioned whether the deal proposed with United, DIA's largest carrier, was legal.
Both Frontier Airlines and Southwest Airlines, the second- and third-largest carriers at the airport, had asked the council to suspend action on the proposed agreement, arguing that it violated federal law by giving disproportionate economic benefits to one airline.
But on Monday, Ortega was one of several council members who said that, after studying the issue, they believe DIA is in the right because the deal drops costs for all airlines but imposes growth requirements only on United and forces that airline to pay penalties if it doesn't meet them.
And DIA Chief Commercial Officer John Ackerman said that airport leaders have offered to work with Frontier, Southwest and other airlines on similar amendments to their leases if they are needed.
> MORE: United Airlines to launch Denver-Tokyo flights, says report
"It's back to the question of what is being done to ensure a level playing field," Ortega said before backing the deal, addressing her comments specifically to Southwest and Frontier. "There is an opportunity for you all to work with the city. I would encourage you to come forward and ... work with the staff of DIA if you want to see certain things addressed."
United -- a unit of Chicago-based United Continental Holdings Inc. (NYSE: UAL) -- reduced the passenger capacity on its flights 10 percent near the end of 2011 and indicated it needed to reduce its roughly $150 million annual lease with DIA as well.
So, city officials worked out a deal under which United's lease payments would fall by $22 million a year on the condition that it grows its total available seat miles flown from DIA 4.5 percent by 2016.
If not, it must pay $100 million back to the airport.
The deal, which involved DIA using unallocated cash balances to pay off about $100 million in debt for the airport's baggage system and for unused space in the basement of the United-dominated Concourse B, also benefits all other airlines at the facility.
Frontier's lease payments will drop by about $2 million per year and Southwest's by about $1 million annually because of the reduction of debt, Ackerman said.
But in letters written to DIA leaders, both airlines said the greater benefits to United were discriminatory and a violation of federal law.
Several council members repeatedly asked DIA officials Monday if paying off of the debt on the baggage system and Concourse B space would mean that airlines on all concourses would be treated equally now.
Ackerman said it would, because such debt was paid off for Concourse A airlines in 2000 and because Concourse C airlines never incurred the debt in the same way.
"Good job!" Councilman Chris Herndon said in response.
Any airline that feels injured by the deal now has the opportunity to file an action with the Federal Aviation Administration, said Helen Berkman, assistant director for the airport legal services division of the Denver City Attorney's office.
