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Fight over international flights at Hobby Airport heads to City Hall

Monday, May 14, 2012

New developments in the ongoing battle over whether Houston should be home to not one, but two international airports.

City Hall was packed Tuesday with people on both sides of the issue, and Southwest Airlines made an offer on how to pay for the expansion at Hobby Airport.

That offer by Southwest is that the airline would pay for a customs facility at Hobby if City Council agrees to the deal. For now, there is no deal on the table, but both sides are lining up their forces, as witnessed by the crowds at Tuesday's presentation.

In airline terms, it was a cramped cabin in City Council chambers, full of executives and airline workers from Southwest and United Airlines; so many that two overflow rooms were required.

Hobby is where Southwest Airlines first operated in Houston 32 years ago. It wants Hobby to launch its first international operations in the next few years, but it needs the city to build five new gates and a $100 million customs facility to do it.

"There are any variety of ways that we can finance this $100 million project. If we can reach an agreement with you, I'll pay for the $100 million project," said Gary Kelly, Southwest Airlines Chairman.

Higher passenger fees on the flights to Mexico and South America would help pay for that.

Southwest claims the expansion would create more direct jobs at Hobby, have a trickle effect on support businesses in the area; but less than what a Houston Airport System study claims.

Southwest also claims it would make international fares more competitive. But United argues it would cost more jobs than it would create, saying that Houston doesn't need a second international airport, just Bush International Airport.

"So we all vigorously compete with each other there, and we would invited them to come use the facility that has already been built for that purpose at Intercontinental that the rest of us use," said John Gebo, VP of Finance for United Airlines.

The city airport system is backing the Hobby expansion, and so apparently are some city council members, judging by the tone toward United.

"Why'd you buy Continental Airlines anyway? Why'd you do it?" asked City Council Member Andrew Burks.

United says it might cancel $700 million in improvements to Terminal B at IAH and it might drop some service from Houston.

Earlier Tuesday

Community meetings are giving the public the chance to weigh in on the plan and what it would truly mean for residents, as well as Southwest Airlines and United Airlines. The fight between the two airlines has led to a standing-room-only crowd during today's public debate.

Whether council members think the expansion is good or bad, City Attorney David Feldman says Houston may not have a choice in the matter.

Speaking to a packed crowd of airline employees, the city attorney gave a legal opinion saying that due to funding the city receives from the FAA it is essentially obligated to accommodate any reasonable plan from Southwest for its proposed $100 million expansion to Hobby Airport.

The city could reject a proposal for Hobby to have those international flights if the airport lacks the capacity to accommodate international flights, if there were to be noise, environmental concerns or a threat to public safety. Groups have been canvassing the area near Hobby trying to inform residents about the project.

"Ten thousand jobs, which sounds like a good idea for the city, if they are 10,000 good-paying jobs," said Communications Coordinator Durrel Douglas with Texas Organized Project. "The people who live and work around Hobby want to make sure that if 10,000 jobs are coming to Hobby, that they are going to hire locally and that they are not going to implant people from outside of Texas in order to fill these jobs."

The international terminals at Hobby would be funded by city revenue bonds. The money would come from a $1.50 fee tacked onto tickets.

United disagrees and claims the deal places an undue burden on the city. According to United, the Hobby project would mean the loss of 3,700 jobs at Bush Intercontinental Airport and $300 million each year.

A Houston Airport System study favored the expansion saying it would create more than 10,000 jobs and put $1.6 billion into the local economy every year. Opinions also differ about the potential impact on passengers.

"It would divide the amount of FIS workers that we have because the government only funds so many for Houston, but about having to divide the resources between two airports and delays," said Patty Higgenbottom, United Flight Coordinator

"I think their benefit is lower fares and I think again we have a 40 year history; it's a mutually beneficial for everybody," said Southwest Airline spokesperson Paul Flannigan.

Bottom line is that the city attorney says the city would be wise to negotiate a deal now because if the city declines and the FAA gives approval for this international terminal, the terms could be less desirable for the city later on.

Presentations from Southwest and United are going on today at City Hall, and there will be public comments as well.

There are two more public meetings scheduled:

Doubletree Hotel JFK
Wednesday, May 9, 2012
6pm to 8pm
15747 JFK Boulevard
Houston, TX 77032
Presentation by Aviation Director Mario Diaz
Public Comment

Marriott Houston South at Hobby Airport
Tuesday, May 15, 2012
6pm to 8pm
9100 Gulf Freeway
Houston, TX 77017
Presentation by Aviation Director Mario Diaz
Public Comment

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Tags:
hobby airport, bush intercontinental airport, southwest airlines, united airlines, local
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