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Will SWA bail on San Jose?

lowecur

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This could be the next fly in the ointment for another SWA city. SWA has not signed on to the new Master Development Plan. Current pax costs are set to almost double from $4.33 per pax to a promissed max of $8.50. The airport would like SWA to sign onto it's "IT Gate Share" solution to maximize efficiency of underused gates at off hours but SWA said they need to have proprietary use to maximize their business model. SWA would like to move out of their present location into the new expansion facility but don't look for the city to offer it to them without signing a long term lease that includes Master Development Plan and IT Gate Share. The airport mgt may keep gates at the current 32 in lieu of 40 as business is still 15% below pre 9/11 levels. SWA is still nervous that the projected pax cost of over $12.73. may raise it's ugly head, and if no Federal Grant money is received it will go to $17.

Interesting that D/FW costs are $6.40 per pax and D/FW has even offered to build SWA a proprietary terminal that is closer to runways to cut taxing time.

http://msnbc.msn.com/id/8371041/
 

J3CubCapt

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Well, if SJC intends to waste alot of money on the new terminal, such as Art etc. I think we may not sign on. Funny how AA pulled alot of their flights out of SJC so that we are now the largest operator. Now the airport wants SWA to pay the for the whole thing, then AA will come back without having to pay their fare share.

J3
 

canyonblue

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J3CubCapt said:
Well, if SJC intends to waste alot of money on the new terminal, such as Art etc. I think we may not sign on. Funny how AA pulled alot of their flights out of SJC so that we are now the largest operator. Now the airport wants SWA to pay the for the whole thing, then AA will come back without having to pay their fare share.

J3
Exactly.
 

AAflyer

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J3CubCapt said:
Well, if SJC intends to waste alot of money on the new terminal, such as Art etc. I think we may not sign on. Funny how AA pulled alot of their flights out of SJC so that we are now the largest operator. Now the airport wants SWA to pay the for the whole thing, then AA will come back without having to pay their fare share.

J3
Now if SWA pulled that stunt, it would be a smart business move. Kudos for SWA, but since AA is pulling this game "HOW DARE THE EVIL EMPIRE DO THAT".

AA
 

lowecur

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J3CubCapt said:
Well, if SJC intends to waste alot of money on the new terminal, such as Art etc. I think we may not sign on. Funny how AA pulled alot of their flights out of SJC so that we are now the largest operator. Now the airport wants SWA to pay the for the whole thing, then AA will come back without having to pay their fare share.

J3
You could say the same about Nashville and RDU as AMR changed their business model and abandoned the mini-hub. Did these moves hurt those cities? Well obviously not as SWA and other carriers stepped in to p/u the slack. I think AMR continued to carry the mortgages on those bldgs until the airport authorities purchased them. Nashville and RDU because of their strong economies would do much better than San Jose after the internet bubble. If SWA decided to pull out of Mineta it would probably be a disaster for the area because of the grandious expansion.
 

canyonblue

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AAflyer said:
Now if SWA pulled that stunt, it would be a smart business move. Kudos for SWA, but since AA is pulling this game "HOW DARE THE EVIL EMPIRE DO THAT".

AA
Different story. AA promised the world, at least the got Japan, to SJC then dumped the airport on them. SWA just keeps chugging along, giving what we need and needing what we give.
 

GuppyPuppy

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lowecur said:
This could be the next fly in the ointment for another SWA city. SWA has not signed on to the new Master Development Plan. Current pax costs are set to almost double from $4.33 per pax to a promissed max of $8.50. The airport would like SWA to sign onto it's "IT Gate Share" solution to maximize efficiency of underused gates at off hours but SWA said they need to have proprietary use to maximize their business model. SWA would like to move out of their present location into the new expansion facility but don't look for the city to offer it to them without signing a long term lease that includes Master Development Plan and IT Gate Share. The airport mgt may keep gates at the current 32 in lieu of 40 as business is still 15% below pre 9/11 levels. SWA is still nervous that the projected pax cost of over $12.73. may raise it's ugly head, and if no Federal Grant money is received it will go to $17.

Interesting that D/FW costs are $6.40 per pax and D/FW has even offered to build SWA a proprietary terminal that is closer to runways to cut taxing time.

http://msnbc.msn.com/id/8371041/
Good. Leave SJC. Where would SWA go to pick up the slack? Salinas??? Besides OAK and SFO there are no viable alternatives to SJC for most in the San Jose area.

San Jose is the 3rd largest city in California (yes bigger than San Francisco). If SWA were to ever leave (highly unlikely) then another carrier would quickly come in to fill the void.

GP
 

lowecur

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GuppyPuppy said:
Good. Leave SJC. Where would SWA go to pick up the slack? Salinas??? Besides OAK and SFO there are no viable alternatives to SJC for most in the San Jose area.

San Jose is the 3rd largest city in California (yes bigger than San Francisco). If SWA were to ever leave (highly unlikely) then another carrier would quickly come in to fill the void.

GP
Don't ever say never there GP. The airport is down 15% since 9/11, and if the pax cost jump to $12 (triple what they are now), you may see more than SWA bailing. Believe it or not, there are still some pax that go to OAK and SFO and drive the 27mi to San Jose.
 

J3CubCapt

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lowecur said:
You could say the same about Nashville and RDU as AMR changed their business model and abandoned the mini-hub. Did these moves hurt those cities? Well obviously not as SWA and other carriers stepped in to p/u the slack. I think AMR continued to carry the mortgages on those bldgs until the airport authorities purchased them. Nashville and RDU because of their strong economies would do much better than San Jose after the internet bubble. If SWA decided to pull out of Mineta it would probably be a disaster for the area because of the grandious expansion.
Lowecur,

I personally lived through both RDU and BNA's decline. The difference in both cases is SWA came in a "Saved" those abandoned airports. SWA saw an opportunity to make a smart business move, as we do well.

J3
 

HalinTexas

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Interesting that D/FW costs are $6.40 per pax and D/FW has even offered to build SWA a proprietary terminal that is closer to runways to cut taxing time.
Source?

I'm calling you on this one. There is about to be so much empty space at DFW once the new Int'l terminal opens and the airport authority is whining about the lack of use. I doubt they can afford softer toilet paper.

The only thing I've read is money offered to move SWA into DFW. It won't be enough to cover the losses incurred by moving, and it didn't cover the whole operation.

If SJC raises the costs to a point that SWA can't be competitive, they will bail. SFO is not nearly the size operation it once was, and with new terminal space opened up and a wounded UAL, they could move back in until it gets crowded again.
 

LUVChild

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lowecur said:
D/FW has even offered to build SWA a proprietary terminal that is closer to runways to cut taxing time.

http://msnbc.msn.com/id/8371041/
Lowecur, could you quote your source for this little tidbit of information? I'm with Hal on this one...at no point do I remember DFW offering to build us a new terminal. And I can't see why they would, when their main argument is that they already have all this free space from the gates that Delta vacated.

In fact, I remember at one point reading an article (heck, it may have been posted here) that outlined the fine print to DFW's little $22 million dollar "free rent" offer to Southwest. To put it lightly, it wasn't as sweet of deal as it seemed, in that we would have been required to put a heavy number of flights in there within a year, on routes that weren't already served by other carriers at the airport. So in other words, it would have set us up to fail from the very beginning.
 

LUVChild

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Ah, here it is...thanks to another poster on another site for finding this and quoting the source:

From the Wright Chat conducted by the Dallas Morning News on June 9th:
"The free rent offer by D/FW includes several stipulations. The biggest one has to do with the level of service that a new, or expanding airline would provide. To receive the $22 million in free rent (plus other benefits such as ground equipment and marketing assistance), a carrier would have to commit to taking over 22 gates and offer a certain minimum of flights. At a minimum, a carrier would have to take over 10 gates within the first year. There are also some expectations that the carrier would devote much of the service to markets not already being served. Aviation industry consultants have said that the minimum 10 gates would be high for any carrier to take on over the course of the year."


Sorry, but after reading this, DFW doesn't suddenly seem so generous. So sorry, Lowecur, but I'm not buying the arguments. DFW may be telling the media about all the great incentives they're offering to Southwest, but what they're not saying is that there are so many "quid pro quo" statements attached as to make it unrealistic (and for Southwest, unprofitable).

The truth of the matter is that DFW wants another carrier to come in there and help absorb the costs of their new terminals, but they don't want another carrier that will pose a serious threat to AA.

So the question is, Lowecur, why on earth would you expect Southwest to make such a blatantly self-destructive business decision? And that's not overstating it, I assure you. With all the stipulations that DFW placed on us moving there, we'd be set up to fail before we even boarded our first DFW customer.

 

lowecur

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HalinTexas said:
Source?

I'm calling you on this one. There is about to be so much empty space at DFW once the new Int'l terminal opens and the airport authority is whining about the lack of use. I doubt they can afford softer toilet paper.

The only thing I've read is money offered to move SWA into DFW. It won't be enough to cover the losses incurred by moving, and it didn't cover the whole operation.

If SJC raises the costs to a point that SWA can't be competitive, they will bail. SFO is not nearly the size operation it once was, and with new terminal space opened up and a wounded UAL, they could move back in until it gets crowded again.
You're calling me on this one!



You, are calling me?


:D :D :D :D

When are you people going to learn? This was probably the greatest article written for retention of the Wrong Amendment. Read em an weep:

D/FW officials say they're willing to do just about anything to lure the nation's top low-fare carrier to fill space left when Delta Air Lines Inc. cut its schedule by 90 percent in January.

That includes building a custom terminal and parking facility close enough to any of D/FW's seven runways to help Southwest be as efficient as possible, said Kevin Cox, the airport's chief operating officer.

"We'll build them whatever they want," he said. "We will literally put them on a taxiway where they're a hop, skip and a jump to a runway.

"We are as serious as a heart attack; we want Southwest Airlines to come here," he added.


http://www.dallasnews.com/sharedcontent/dws/bus/stories/060905dnbuswright.12c0ebf7a.html
 

LUVChild

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Gotta disagree, Lowecur. Actually, that article provides several great reasons why Southwest SHOULDN'T go to DFW. Herb and Gary outlined them clearly.

Yes, they say they'll build us a new terminal, but at what cost?

Read the fine print before you sign on our behalf.
 

lowecur

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LUVChild said:
Gotta disagree, Lowecur. Actually, that article provides several great reasons why Southwest SHOULDN'T go to DFW. Herb and Gary outlined them clearly.

Yes, they say they'll build us a new terminal, but at what cost?

Read the fine print before you sign on our behalf.
Weak!

I show you what you and HT said was BS, and you still come up with excuses. Everybody has their price, and Gary and Herb are great negotiators, so what would you say if it ever happens?.............I can hear it now: "It was such a great deal, how could we turn it down.....you'd have to be nuts. It's what we had planned all along":D

Look Feral Child, I don't really care what SWA does. I predicted a compromise where over a 10 year period you get a few new cities per year. It may happen or it may not.....or a deal may be worked out at D/FW.
 
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lowecur

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J3CubCapt said:
Lowecur,

I personally lived through both RDU and BNA's decline. The difference in both cases is SWA came in a "Saved" those abandoned airports. SWA saw an opportunity to make a smart business move, as we do well.

J3
What a bunch of crap. Airports survive based on demand, and all of the existing capacity would have been picked up by the other legacy's back then. The SW affect certainly helped with dynamic growth over and above that capacity, but the airports would have survived just fine because both cities saw huge economic growth in the last 15 years.
 

HalinTexas

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Lowcur, you got me on that one, but that is the ONLY place I've ever seen that mentioned, and I think Cox was talking out of turn.

DFW Airport has no money! I commute out of there, and fly into there with ATA. It's turning into an expensive ghost town. Terminal D, the new int'l terminal is huge and expensive. I don't think DFW could find the money to cheaply build anything that would fit SWA's needs.

Read the rest of the article. It's plain to see how DFW won't work. Throw in an additional 200+ flights per day and you got gridlock. There's not enough incentive for SWA to split or move operations to DFW.

The Dallas/Ft. Worth area can handle two airports, it can't handle less or more expensive service, including further contruction at DFW.
 

lowecur

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HalinTexas said:
Lowcur, you got me on that one, but that is the ONLY place I've ever seen that mentioned, and I think Cox was talking out of turn.

DFW Airport has no money! I commute out of there, and fly into there with ATA. It's turning into an expensive ghost town. Terminal D, the new int'l terminal is huge and expensive. I don't think DFW could find the money to cheaply build anything that would fit SWA's needs.

Read the rest of the article. It's plain to see how DFW won't work. Throw in an additional 200+ flights per day and you got gridlock. There's not enough incentive for SWA to split or move operations to DFW.

The Dallas/Ft. Worth area can handle two airports, it can't handle less or more expensive service, including further contruction at DFW.
They have 22 empty gates since DL left. Other carriers are waiting to see how this plays out before committing anywhere. It is my understanding Jetblue was very close to signing on at DFW till Gary decided to play hardball with the Wrong Amendment.

You don't think DFW could find 1/2 a billion to build a road, parking garage, and new 20 gate terminal for Southwest? It's called a bond issue, and it could very easily happen if SWA agrees to close DAL.
 

FlyBoeingJets

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lowecur said:
They have 22 empty gates since DL left. Other carriers are waiting to see how this plays out before committing anywhere. It is my understanding Jetblue was very close to signing on at DFW till Gary decided to play hardball with the Wrong Amendment.

You don't think DFW could find 1/2 a billion to build a road, parking garage, and new 20 gate terminal for Southwest? It's called a bond issue, and it could very easily happen if SWA agrees to close DAL.
Let me get this straight...

DFW has tons of money to spend on a SWA friendly new terminal and other, yet to be started, infrastructure projects to handle the increased usage from SWA and JetBlue.

But I thought....

DFW is in financial trouble if it can't fill up the new terminal and carriers will be stuck with onerous fees if they can't fill it. How can DFW build ANOTHER expensive terminal, just for SWA or LCCs, that will be cheap to operate from without charging for it? How does building another terminal help offset other costs already threatening operators at DFW now?

I'll tell you. ALL carriers that choose to operate from DFW will be hit with big fees to pay for the international terminal and whatever else DFW decides to bill them for. They just have to figure out a way to get them inside the door. Then the axe will fall.


BTW, a Bond issue has interest payments that come from usage fees. :)
 

FlyBoeingJets

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This argument avoids the fact that we are talking about a company choosing not to punish its customers with the DFW airport experience. It is sprawling, time consuming and expensive for the traveler.

SWA wants its customers to enjoy the Love airport experience. SWA wants its Dallas customers to be able to use an airport in their own town. SWA has spent big bucks on Love to encourage the behavior of a friendly airport.

If we reward poor behavior on the part of DFW we just encourage more of the same. DFW planners, in the '60s, had an Orwellian vision of building an airport to replace all airports. They managed to use Texas politics to force the project down our throats and made BIG money for a precious few doing it. We didn't want to use it then and still don't want to use it now.

Still no acceptable answer to the question, "Why should SWA be forced to foot the bill for unnecessary construction projects at an airport it does not want to operate from?"

And, Lowecur, you want to build another NEW terminal for SWA in response to the over construction and cost problems? What???
 
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