24-May-2012 9:43 AM

Southwest to cover all costs related to USD100m international expansion at Houston Hobby

US' Houston Mayor Annise Parker announced (23-May-2012) her support for international service at Houston Hobby Airport and released details of a proposed agreement under which Southwest Airlines will cover all costs related to the USD100 million expansion. The Memorandum of Agreement (MOA) requires Southwest to design and build the five new gates and customs facility to the City’s specifications. When finished, the City will own the improvements debt free. In return for its investment, Southwest will have preferential scheduling rights and pay no rent for its use of four of the five new international gates, and will also pay no rent for its use of the customs facility. The fifth additional gate and the customs facility will be available for use by all other airlines at Hobby, but unlike Southwest, the other airlines will pay rent. The addition of international service at Hobby will mean approximately 20 more departures daily, which is still far below the historical record-setting activity levels of 1997. Southwest intends to utilise new Boeing 737 aircraft for the services. As an additional incentive for airlines who agree to a long-term lease at Hobby, the agreement allows a rebate of airport revenues for every additional passenger they bring to the airport above the base passenger levels in the year price to the start of international service, with a cap of USD3.9 million annually. This is based solely on an anticipated increase in concession sales inside the airport from additional passenger growth. The proposed MOA is subject to approval by Houston City Council and Southwest Airlines management. City Council consideration is expected on 30-May-2012. Construction is planned for the spring of 2013. In the interim, the City will work closely with the carrier and Washington to obtain the necessary federal approvals as well as a commitment for an adequate number of customs and border patrol agents at the airport. [more - original PR] [more - original PR II]

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