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"Colorado Springs Municipal Airport woos Southwest Airlines to fill gaping hole left in WestPac wake"

Sunday, February 18, 2001

Ticket to ride
Springs airport woos Southwest Airlines to fill gaping hole left in WestPac
By Heather Draper and John Accola
The Denver (CO) Rocky Mountain News

COLORADO SPRINGS -- Colorado Springs Municipal Airport's latest addition --
a 525-foot-long, glass-enclosed carpeted walkway -- is really a bridge to

Built at a cost of $2 million, the just-completed passenger "connector"
links the main terminal to a modern, four-gate satellite terminal that has
been sitting empty since Western Pacific ceased operations in 1997.

Airport officials acknowledge the bridge and the mothballed East Unit
Terminal currently have little use. But they're optimistic that soon will
change with a stepped-up campaign to bring more airline service to
Colorado's second-busiest -- and arguably most underused -- commercial

Bracing for projected passenger growth of more than 3 percent a year and an
anticipated population boom in southern Colorado, airport officials say
they've lobbied 15 to 20 airlines about adding passenger service in the

"I think it would be easier to tell you who we haven't talked with," said
Colorado Springs Municipal Airport Aviation Director Gary W. Green, citing
talks with Southwest Airlines, U.S. Airways, Vanguard and Alaska Air as

Speculation is rife among industry analysts and even airline employees that
Dallas-based Southwest Airlines will be the east terminal's new tenant.

"I think there'll be an announcement from Southwest about Colorado Springs
in the next two to three months," said Randy Petersen, president and CEO of
Frequent Flyer Services in Colorado Springs.

Petersen said he was told Southwest is posting internal notices seeking
employees interested in living in the Springs.

But Southwest dismissed the talk as rumors.

"We are no closer to serving Colorado Springs than we have ever been," said
Southwest spokeswoman Kristin Nelson. "I don't think it's in our short-term

City officials say they've been courting the low-fare, no-frills carrier for
several months, but have gotten no word from Southwest about its intentions.

"Southwest sees the Springs as a ball sitting next to the corner pocket that
they can knock in at any time," said Robert "Rocky" Scott, president of the
Greater Colorado Springs Economic Development Corp. "And we're in the
positioning mode, meaning we're ready when Southwest or anyone else steps

Love affair with Southwest

Colorado Springs may be ready for Southwest, but the carrier is in no hurry
to reveal its plans.

Southwest can afford to be picky. Because of its focus on low fares,
customer service and on-time reliability, the carrier has become the
nation's fair-haired child at a time when many U.S. airlines are merely

Southwest's average one-way airfare is about $85 and the average passenger
trip length is 663 miles. The carrier has been ranked No. 1 in fewest
customer complaints for the last nine years, according to the U.S.
Department of Transportation.

Fortune magazine this month named Southwest its Most Admired U.S. Airline
for the fifth consecutive year and the airline was No. 4 on the magazine's
Ten Most Admired Companies list.

The Southwest love affair knows no bounds. Last year, 148 cities approached
the carrier to start service in their communities.

"Each year, more than 100 cities vie for our service. Our approach is very
opportunistic; we don't have a five-year plan," Southwest's Nelson said. "We
have just a general set of guidelines and our primary criteria are
communities where the marketplace is overpriced and underserved."

She said most of Southwest's expansion efforts now are focused on the East
Coast. The carrier recently added Buffalo, Albany, Hartford, Raleigh-Durham
and Long Island to its schedule.

Airline analyst Mike Boyd, president of The Boyd Group in Evergreen, has
been working with the city of Colorado Springs trying to woo Southwest.

The Springs airport would seem to fill a Rocky Mountain void in Southwest's
route map. Southwest already flies out of Salt Lake City, Las Vegas,
Phoenix, Albuquerque, Kansas City and even smaller cities such as Boise,
Idaho, and Omaha.

Boyd says Colorado Springs would fit into the company's strategy to avoid
congested hub airports such as DIA; still he doesn't see them coming to the
Springs in the near future.

"I meet with Southwest four or five times a year. I think they'll come here
someday ... the airport is ready-made for them," Boyd said. "But right now
they can make more money adding flights to Buffalo than they can flying out
of Colorado Springs."

Western Pacific boom and bust

The 7-year-old Colorado Springs Municipal Airport was the nation's
fastest-growing airport during Western Pacific's heyday in the mid-1990s.
The airport boarded 2.4 million passengers in 1996, which was about double
the airport's capacity, director Green said.

"WestPac just buried us in people," Green said. "We had people driving down
here from Cheyenne to fly out of the Springs. We were so far behind the
power curve it was pitiful."

People also were flocking from Denver and Boulder to take advantage of
cheaper fares out of Colorado Springs.

The airport dealt with the unprecedented growth by expanding the main
terminal's baggage claim area and adding security checkpoints, said airport
spokeswoman Mary Collins. But it soon became apparent that WestPac needed
more room, so the airline spent nearly $4 million to build a satellite

When WestPac collapsed in 1997, Colorado Springs became the nation's
"fastest-shrinking" airport, said Green. About 1.2 million passengers
boarded at the Springs airport last year.

But WestPac's boom and bust wasn't all bad for the city, he said.

The airport emerged from the shadow of Denver International Airport during
WestPac's run, Green said. And the city was able to buy a $4 million
terminal for $115,000 in 1998 -- the year WestPac filed for Chapter 11
bankruptcy -- which nearly doubled the airport's capacity, he said.

"It's positioned us well for future growth," Green said. "You have to have
the space available for an airline to come in or to expand -- you can't sell
it if it's not there."

Competing with Denver

Getting new service is highly competitive, Green said, so any airline
considering Colorado has to "investigate thoroughly" United Airlines' grip
on the market.

"United is a force to be reckoned with," he said. The world's largest
airline controls 70 percent of the market at DIA and about 30 percent of the
Colorado Springs market.

But unlike DIA's dependence on United Airlines to survive, the Springs
airport is served by eight carriers: United; American Airlines, with 22
percent of the market; Delta, 22 percent; America West, 8 percent; and TWA,
Northwest, Continental and Mesa making up the remaining 19 percent.

The airlines' cost per passenger at the Colorado Springs Municipal Airport
is $5.93, compared with $13.49 per passenger at DIA -- a fact that doesn't
go unnoticed by low-fare carriers, said Springs' spokeswoman Collins.

"Airlines that have really low fares, the last thing they need is high
enplanement fees," she said.

Green said the airlines operating in Colorado Springs now "are all doing
well and reporting high yields. We're on the cusp of some big things. The
reality is, somebody who came and duplicated what WestPac did -- with some
adjustments -- would probably be successful."

A new low-fare carrier in Colorado Springs would draw passengers away from
DIA -- a key to a new entrant's survival, analysts say.

A no-frills airline also likely would take a bite of Denver-based Frontier
Airlines' market.

Frontier President Sam Addoms said the speculation that Southwest is coming
to Colorado Springs "is one of the top 10 rumors I hear, but there are at
least nine others."

Addoms said Southwest officials likely won't disclose their plans until they
sign on the dotted line.

"No airline will ever tell anyone where they go next -- if they did the
competition would act before they even arrive," he said.

But Addoms acknowledged Southwest's entry into the Springs would change the
competitive landscape, even at DIA.

"They are a formidable carrier, irrespective of where they locate," Addoms
said. "It wouldn't make any difference if you were asking me or any other

Attached Photo:

Gary W. Green, Colorado Springs Municipal Airport aviation director, stands
in the new bridge connecting the main and east terminals. The bridge is part
of a campaign to bring more airline service to the city.


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