July 22, 2005 in Business

Southwest hopes to leave Sea-Tac

The Spokesman-Review

SEATTLE – Promising more jobs and lower fares, Southwest Airlines on Thursday proposed building its own $130 million terminal at Boeing Field, thereby moving its operations from nearby Seattle-Tacoma International Airport.

The Dallas-based low-cost carrier would own and maintain the planned eight-gate terminal at Boeing Field, officially known as King County Airport.

Southwest currently operates 38 daily flights out of Sea-Tac, but increasing costs there have impeded the carrier’s ability to expand, Gary Kelly, Southwest’s chief executive officer, said Thursday in announcing the proposal at Boeing Field.

Costs at Sea-Tac are the highest among the airline’s 60 service areas, Kelly said. He noted that per-passenger fees have nearly doubled to $10 and are expected to continue rising, while the fees at Boeing Field would be about $5, similar to Southwest’s systemwide average.

Southwest’s lease with Sea-Tac expires at the end of this year. It hopes to begin operations at Boeing Field in 2009.

King County Executive Ron Sims said the offer appears generous and “refreshing,” but said it will be evaluated further before a decision is reached.

“It is my duty to ensure that the very legitimate concerns about noise and traffic are addressed and that we protect the county’s financial position,” Sims said in a statement.

Sea-Tac officials have frowned upon the move, saying Southwest would leave other airlines to pick up its share of the airport’s $4 billion renovation project – including a third runway – that the airlines bargained for.

“If they were to move they would take their passengers with them but leave their costs behind,” said Mark Reis, Sea-Tac director.

Meanwhile, officials with Alaska Airlines and Horizon Air on Thursday sent King County a letter asking for “equal access” to Boeing Field.

The carriers said they would potentially offer 100 daily flights from the airfield if Southwest is allowed to move there.

“We would do whatever it takes to operate the same number of flights at Boeing Field,” said Joe Sprague, a vice president with parent company Alaska Air Group.

Southwest initially would offer 60 daily flights – potentially increasing to 85 – at Boeing Field, which now serves private planes, corporate jets, charters and Boeing Co. planes being prepared for delivery.

The airline would pay for the new terminal on the east side of the airport, adjacent to and south of the existing terminal.

It would include a parking garage, passenger concessions, rental car provisions and special accommodations for cruise traffic and buses.

Under a planned 50-year lease agreement, the carrier also would pay landing fees and land rent to King County, which owns the airfield.

The county would assume ownership of the airport at the end of the lease, Kelly said. He noted that the county would be asked to pay for road improvements, which company consultants have said would be minimal.

Southwest would continue to pay fees and taxes associated with using the airfield, the result of which would generate an estimated $1.6 billion in total economic gain for the region, said Ron Ricks, Southwest’s senior vice president of law, airports and public affairs.

“It’s Christmas in July for King County, Seattle and Puget Sound,” he said, promising that the airline also would buy more Boeing 737s. He didn’t offer specifics on such a purchase.

Sims said the county will plan a public comment period and will conduct an environmental review of the proposal.

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