Southwest Airlines Move Could Mean Growth at Seattle's Boeing Field

Controversial move could mean need to expand terminals at Boeing, even as Seattle Int'l expands terminals

SEATTLE -- Southwest Airlines Co. began flying to Seattle-Tacoma International Airport in 1993, ushering in the "Southwest effect" of lower fares as rival airlines slashed prices in response to the new threat.

Southwest has cited increasing fees as a reason to possibly abandon Seattle-Tacoma International Airport. The airline began flying there in 1993.

Now the Dallas-based carrier is having the other kind of Southwest effect on Seattle -- the controversial kind.

It's considering moving its operations to smaller Boeing Field to lower its costs, leaving Sea-Tac behind.

Southwest's penchant for secondary airports such as Boeing Field and Dallas' Love Field has helped the airline keep its costs relatively low. But lately, the airline has grown more insistent on its small-airport preference, thrusting big cities into serious debates about regional infrastructure plans and competition.

"Same story, different airport," said airline consultant Robert Mann.

Boeing Field, officially known as King County International Airport, lies about six miles south of downtown Seattle, right next to Interstate 5. It handles more than 800 takeoffs and landings a day, including corporate jets, shippers such as UPS and Boeing 737s being delivered to customers.

Last week, a couple of colorful Southwest jets sat parked on the airfield, waiting to be picked up.

Boeing Field is, in many ways, the quintessential Southwest airport -- close to downtown and small enough to handle short spans between takeoffs and landings.

"We have very quick turns, about 25 minutes between touchdown and when the wheels go up," said Southwest spokeswoman Marilee McInnis.

"Smaller, close-in, secondary airports tend to lend themselves better to our business model."

Southwest says it's studying the idea of moving to Boeing Field and hasn't committed to it. Boeing Field airport director Robert Burke said he expects the airline to make a proposal in the next few weeks.

The potential move has been controversial in Seattle, partially because it would increase air traffic near residential areas. Sea-Tac has protested the idea, saying passenger air traffic from Boeing Field doesn't fit the region's transportation plans. Sea-Tac is building a third runway to accommodate growth, the airport noted.

Some of the funding for that runway and other major Sea-Tac improvements comes from airline fees. Southwest has cited those increasing fees as a reason to abandon the airport.

Southwest has long had a soft spot for secondary airports. Instead of flying into the major airports in Boston, New York and Washington, it opted for airports in Manchester, N.H., Islip, N.Y., and Baltimore.

But Southwest also flies into some major airports, including Sea-Tac, where it makes up about 8 percent of the airport's average 1,000 takeoffs and landings each day.

Under chief executive Gary Kelly, who took over in 2004, Southwest has begun seriously rethinking its operations. Southwest shares have stayed mired in the midteens since 2002, and Mr. Kelly wants to cut costs to lift the stock, analysts said. Shares closed Wednesday at $13.96, down 9 cents.

Southwest's labor costs have also steadily increased, said Alan Sbarra, an aviation consultant. "He can offset that by continuing to lower non-personnel operating costs," he said.

In Dallas, Southwest is battling restrictions that limit it from flying long-distance routes from Love Field, stirring up a major political fight against Dallas/Fort Worth International Airport and American Airlines Inc.

In San Jose, Calif., Southwest hinted it would leave the airport if costs got too high, so the airport scaled back its expansion plans.

Sea-Tac is spending $4.2 billion on its expansion and renovation, including the new runway, concourses, transit, security and parking.

Airline fees fund some of those capital expenditures, and per-passenger fees are on the rise at Sea-Tac. The airport expects the average cost per passenger to climb above $15 per airline in 2009 from about $10 to $11 today.

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