Development

Southwest Airlines wants a bigger voice on KCI’s future

Updated: 2013-11-14T16:32:31Z

By KEVIN COLLISON

The Kansas City Star

Southwest Airlines, Kansas City’s biggest airline by far, is jumping into the debate over the future of Kansas City International Airport, saying the current $1.2 billion proposal for a new single terminal would substantially boost its cost of doing business here.

The Dallas-based airline, which operates 40 percent of the flights at KCI, more than double runner-up United Airlines, has joined the Kansas City Area Development Council to raise its local profile, and a top executive was in town this week to talk to business leaders.

“We’re the anchor tenant, so costs are important to us,” Ron Ricks, Southwest executive vice president, said Wednesday. “A new $1.2 billion terminal would triple our costs. That’s a problem.”

Until now, Ricks said, the airlines have not had a voice in planning for the future of KCI. A task force established by Mayor Sly James, however, intends to invite the airlines to the table early this winter and then hold public hearings before making its recommendation in April.

“I think Southwest should have a significant input,” said David Fowler, co-chair of the 24-member mayoral task force. “They’ll be providing a lot of the financial means if anything gets done.

“Within the next month or so, I fully expect we’ll have a discussion with the airlines, answer their questions and gather their input.”

With the federal government pulling back on its funding for airport improvement projects, the cost of any KCI plan will increasingly rely on the airlines through increased landing fees and ticket surcharges.

Southwest estimates it now pays $5.25 per passenger to use KCI, among the lowest costs in the nation. According to the airline, under the single-terminal plan currently envisioned, that would grow to $14.36 to $18.70 per passenger in 2022. The current maximum passenger cost nationally for medium-size airports like KCI is $19.17.

At this point, Ricks said, Southwest thinks the only rationale being offered by airport authorities for the single-terminal proposal is to provide more customer-service amenities.

The airline, which operates an average of 70 flights daily at KCI, believes that the current runway and gate capacities are more than adequate for future air service, and that the airport functions efficiently.

“Customers don’t make a choice of flights based on amenities; it’s more based on choice of flights and cost,” Ricks said. “Our question is how many amenities do you want at what cost?

“A $1.2 billion proposal would be a disincentive for airlines to service Kansas City.… We’re confident we could come up with something for the community at a much lower cost than what’s being presented here.”

The airline executive said Southwest had experience working with cities to improve their airports. The airline has its own design and construction management operation and has partnered with airports in Denver, Philadelphia, Los Angeles, Dallas and Houston on projects.

In the case of Southwest’s home airport, Dallas Love Field, the airline is providing $500 million in upfront cash to build a new city-owned terminal, but it will recoup that money through rental credits in the future. A similar arrangement is being applied for a new international terminal in Houston.

Though Ricks would not go so far as to say Southwest would finance a potential KCI improvement plan, or assist in its planning and execution, he did say the possibility existed.

“I won’t say it’s a model for Kansas City,” he said. “We don’t want to be specific, but we have a team at Southwest that’s good at working with local communities to design, finance and build terminals that work for those communities.”

Southwest has been serving Kansas City since 1982, and Ricks said service had increased incrementally over the years. In the past year, the airline introduced non-stop service to Minneapolis, New Orleans and Boston, and now has a total of 24 non-stop destinations.

In an increasingly important air service issue, Southwest flies only larger jets to KCI as opposed to the smaller regional jets and turboprops used by some airlines. For that reason, while it has 40 percent of the flights, it offers 51 percent of the seats at KCI, 63,900 each week, Ricks said.

About 75 percent of the passengers using Southwest at KCI begin their flights here, with the other 25 percent coming from other locations and making connecting flights here.

Right now, Kansas City’s lower operating cost gives it an advantage over larger hub airports such as Chicago O’Hare and Atlanta Hartsfield when it comes to playing host to connecting flights. Ricks said that could change if costs jump substantially.

“Connecting passengers are really important,” he said. “We wouldn’t be profitable on local passengers alone.”

To reach Kevin Collison, call 816-234-4289 or send email to kcollison@kcstar.com. Follow him on Twitter @kckansascity.

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