"Southwest saves at Sea-Tac"

Thursday, October 13, 2005

Southwest saves at Sea-Tac 
BY JOHN GILLIE
The Tacoma (WA) News Tribune


Though Southwest Airlines has complained that rising costs threaten its
profitability at Sea-Tac Airport, new figures show the low-cost carrier pays
substantially less per passenger boarded there than the average airline.

Southwest, whose proposed move from Sea-Tac to Boeing Field was shot down
Tuesday by King County Executive Ron Sims, pays the airport $8.60 per
boarding passenger in fees and rent. That compares with an $11.36 average
per passenger cost for other airlines using the airport, new statistics from
the airport show.

Sea-Tac Director Mark Reis said all airlines pay the same landing fees and
per-square-foot terminal rents, but Southwest's fast turnarounds and other
efficiencies allow it to process more passengers through its gates than
other airlines.

The Dallas-based airline said its proposal to move its 38 flights from
Sea-Tac to Boeing Field was motivated by the high costs at the region's sole
major commercial airport. Southwest CEO Gary Kelly said Sea-Tac is the most
expensive per passenger of the 60 airports Southwest serves.

Average airport costs per passenger nationwide are $5 for Southwest, Kelly
said.

But Reis said costs are Sea-Tac are below those of such major airports as
Boston, New York LaGuardia, Washington National and Dulles, San Francisco,
Miami, Newark Liberty and New York John F. Kennedy. Southwest serves none of
those airports.

Southwest avoids most major city airports, preferring to serve secondary
airports nearby. 

For instance, it serves the Boston market through Providence, R.I., the New
York market through Long Island Islip and the San Francisco Bay Area through
Oakland and San Jose, not San Francisco International Airport.

Southwest spokeswoman Whitney Eichinger said the airline didn't have a
projection for what its costs would have been at Boeing Field, but they
would have been substantially less than what it pays at Sea-Tac and less
than its $5 per passenger system average.

Sims ruled out the move to King County-owned Boeing Field because of
concerns about noise, the airport's inadequate road access to serve millions
of passengers and the lack of sufficient land to accommodate both Southwest
and Alaska airlines, which had sought to build new terminals at the field.

Alaska fought Southwest's proposal, but countered with its own to meet the
competition.

Sea-Tac Airport projections show costs per passenger will rise on average at
Sea-Tac to $14.15 in 2009, the year Southwest had projected it would make
the move to Boeing Field. If Southwest doesn't increase its capacity at
Sea-Tac more than the normal growth rate, its cost per passenger at Sea-Tac
in 2009 will be $10.82, a $3.33 advantage over the average paid by other
carriers.

If the low-cost carrier increased its Sea-Tac schedule from the present 38
flights a day to the 85 daily flights it had projected at Boeing Field, the
carrier's 2009 costs would be $8.91 per passenger, $5.24 less than the
Sea-Tac average, the airport said.

Southwest's Kelly said the airline was initially alarmed about Sea-Tac costs
when a July 2003 projection showed the costs per emplanement in 2009 would
be as much as $25.09.

The airport has worked for the last two years to bring that figure down to
the present estimate of $14.15 per passenger. Reis said the airport cut
staffing by 10 percent and trimmed several projects out of its capital
budget, including:

 . A general-aviation area relocation.

 . A modernization of the cargo area.

 . Improvements to the access roads to the airport from the south. 

Just this year, the airport was able to change the way it financed its $4.2
billion in improvements including a $1.2 billion third runway and a new A
concourse and central terminal remodeling project.

Sea-Tac also has improved its income from airport vendors and parking and
from federal funds.

A significant factor in cutting the per passenger costs, too, was an upturn
in the number of passengers the airport handles, he said. That number took a
dive after the Sept. 11, 2001, terrorist attacks but since has revived to
exceed pre-Sept. 11 levels. With more passengers served, the fixed costs of
expansion and operation are spread over a greater number of passengers.

Had Southwest been allowed to move and Alaska had followed it with several
dozen flights, the costs per passenger in 2009 for the carriers remaining at
Sea-Tac would have risen to $21.33 per passenger in 2009, the airport
projected.


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