The United States’ largest domestic airline has its sites set south of the border just now. Southwest’s so-far fledgling international operations get a major boost October 15 with the opening of a new Latin American gateway at Houston Hobby Airport. Couple this with a the planned 2017 debut of a similar set-up at Fort Lauderdale, Florida and you get the distinct impression Southwest doesn’t intend to just dabble in the international arena. It means business.
On any given day, one out of four U.S. flyers boards a Southwest 737 (the carrier is the world’s largest operator of seven-threes). Ninety-eight percent of those passengers are bound for domestic destinations, just 2 percent international.
While that ratio won’t radically change in the near term look for Southwest to ramp up international competition in the coming months and years. Southwest Chairman, President and CEO Gary Kelly told reporters gathered in Houston for a preview of the airline’s new US$146-million international terminal that the carrier is looking at 50 possible new destinations in North, Central and South America.
This past summer, Southwest fielded as many as 100 international departures per day. It was able to do this because of the plug-and-play international expertise of fellow low-coast carrier AirTran, with whom Southwest recently merged.
“We didn’t know how to do international services,” says Southwest Vice President of Airport Operations Bob Montgomery. “We had to be able to figure out how to enter the international marketplace. Here was a ready-made solution. As we merged with AirTran, they had the people that knew how to do it,” this by having flown Latin America and Caribbean operations for a few years.
The Houston Hobby (HOU) gateway opens with seven daily international flights to six destinations: Belize City, Belize; Cancún, Los Cabos, Mexico City and Puerto Vallarta in Mexico and San José, Costa Rica. This will be followed up fast with the opening of runs to Montego Bay, Jamaica and Liberia, Costa Rica.
The new HOU set-up is a five-gate affair from which Southwest can comfortably launch at least 20 international flights per day from Hobby, perhaps more. There’s room to expand the terminal by another seven gates. That could mean something in the neighborhood of 48 international flights each day.
Houston Bush Intercontinental Airport-hubbed United Airlines already lofts significant Latin American service from its IAH megahub, especially to Mexico. Initially, former United CEO Jeff Smisek objected to Hobby going international, contending the project put in doubt United’s own expansion plans at Bush. Still, this past May the United broke ground on a new 265,000-sqaure-foot terminal at IAH.
Longer Reach, More Competition
The rash of mergers that befell the U.S. airline industry over the past decade makes any new competition welcome. By the end of 2015 Southwest chief Gary Kelly says the low-cost carrier will serve a dozen destinations throughout Latin America and the Caribbean from a dozen U.S. gateway cities.
Initially, Southwest’s reach will be limited by the aircraft it can deploy on its international runs. Boeing data show the current 737-800 has a nonstop reach of some 2,935 nautical miles; the 737 MAX 8 that will come on line in 2017 in Southwest colors can fly 400 to 500 miles farther. That opens up a slew of new South and Central American cities for the airline.
Southwest’s Latin leanings are grabbing all the headlines now, but the carrier also has Canadian aspirations. How about Europe? “Not in my lifetime at Southwest,” an executive told this reporter.
For now, carrying Southwest’s colors south and north of the border is what’s in the competitive cards. Passengers in search of saving some money will be watching closely to see what destinations hold the winning hands.