"Southwest Is Adding Flights to Protect Its Chicago Hub"

Tuesday, November 2, 2004

Southwest Is Adding Flights to Protect Its Chicago Hub
By MICHELINE MAYNARD
The New York (NY) Times


Southwest Airlines said yesterday that it would add 16 flights a day from
Chicago Midway Airport, moving to protect a valuable hub amid the fight
breaking out over the assets of ATA Airlines, the airport's biggest carrier.

Southwest said that beginning in January, it would add the flights to 13
cities that it already served from Midway.

The announcement came a week after ATA filed for bankruptcy protection. At
the same time, ATA said it would sell its operations at Midway and gates at
La Guardia Airport in New York and Reagan National Airport in Washington to
AirTran Airways for $87.6 million. 

Southwest, the nation's sixth-largest airline; ATA, the 10th largest; and
AmericaWest Airlines, which is 12th biggest, are all discount carriers.

Last week, the chief executive of Southwest, Gary Kelly, said the airline
would significantly expand at Midway, its fourth-biggest airport and its
most important hub. Currently, Southwest has 145 flights a day from Midway,
and 2,900 employees. It started service at Midway in 1985 with seven flights
a day.

Southwest said it would add two flights a day from Midway to Orlando and
Fort Lauderdale in Florida, and to Manchester, N.H. It will add one flight a
day to Las Vegas; Raleigh, N.C.; Tampa; Los Angeles; Oakland; Phoenix;
Seattle; Providence, R.I.; Philadelphia; and Columbus, Ohio. The flights
will start in January, February and March, depending on the city.

Southwest also plans to add 29 new Boeing 737's to its fleet next year, one
reason the airline is able to increase its schedules. It said it would
operate the additional flights out of its 19 gates at Midway.

But some analysts say Southwest might make an offer for some of ATA's 14
gates at Midway, so that it could expand even further. Also, America West,
another low-fare carrier, said it might be interested in buying all of ATA,
including its operations at Midway. 

Any deal for ATA's assets would require approval from the United States
Bankruptcy Court, from the City of Chicago and from a federal loan board.
America West and ATA each have outstanding balances on federally backed
loans.

The ratings agency Standard & Poor's said yesterday that it was changing its
outlook for America West from neutral to negative, meaning it could cut the
airline's debt rating if conditions do not improve.

S.& P. cited America West's $47 million third-quarter loss, and said it
expected further losses. S.& P. has a B- rating on America West's debt.


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