MIAMI— Southwest’s CEO Gary Kelly has repeatedly dubbed 2015 as the “year of Houston.” He wasn’t kidding.
On Thursday, Southwest Airlines officially unveiled its new five-gate international terminal in Houston. The airline launched six new international routes from the facility, with two more set to debut in November. After all are inaugurated, Southwest will offer service to a total of nine international destinations from Houston, with flights to Aruba commencing earlier this year.
The destinations gaining Southwest service today include Mexico City, Puerto Vallarta, Cancun, Cabo San Lucas, San Jose (Costa Rica), and Belize City. In November, Southwest will usher in flights from Hobby to Liberia (Costa Rica) and Montego Bay as well.
Southwest’s expansion boldly leaves an international footprint at William P. Hobby Airport (HOU) and signifies traffic abroad coming into greater focus for Southwest. Houston represents just one of the three cities Southwest designated as “international gateways,” with Fort Lauderdale and Baltimore/Washington also preparing to shoulder much of Southwest’s international growth in the coming years.
The party started early this morning for Southwest. Flight 305 to Cancun took center stage, marking the first one out of the new terminal building. A scheduled 8:10 am departure, boarding began slightly earlier than usual at 7:30 am to sufficiently allow for the festivities. CEO Gary Kelly and Houston mayor Annise Parker helped with the boarding process, taking tickets from passengers as they headed onboard.
Doors closed at 7:56 am, allowing the highly celebrated flight to depart on-time. Fire trucks were standing by to give the plane, coated in the airline’s new “Heart” livery, a ceremonial water salute as it taxied toward the runway.
The same plane served as the terminal’s first international arrival, with Flight 306 making the return trip from Cancun, pulling in about fifteen minutes earlier than its scheduled 1:35 pm arrival time.
A news conference honoring the launch began shortly after 8:00 am. Bob Montgomery, Southwest’s VP of Airport Affairs, took the microphone first. Motioning out the window to the water salute, he boasted that “this is how Houston celebrates an aircraft leaving.”
“Hobby has been freed,” he exclaimed, kicking off the event.
Montgomery continued to speak to Southwest’s historically strong presence in the city, naming the airline Houston’s “hometown carrier” with Southwest having offered service from Hobby since its first day of operations over forty years ago. He believes Southwest’s mission of providing “friendly, reliable, and efficient” service will continue to benefit the area greatly, especially now as the airline begins flying over international waters.
CEO Gary Kelly stepped up to the podium next, drawing loud applause from the crowd. “Well, what do you think,” he asked, drawing favorable cheers from the audience.
Kelly highlighted two major obstacles that Southwest and the city faced in launching international service. Firstly, he pinpointed obtaining a building permit as a hurdle to clear. However, he went on to say the city of Houston “knew it had a problem and that competition was lacking” when international fares from Chicago, another hub city for United, outpriced international fares from Houston. Thus, Houston was eager to work with Southwest, ultimately resulting in bolstered international competition from Hobby. Many of Southwest’s employees sported shirts reading “Houston, you have an option,” highlighting the competition fostered by the airline’s international moves.
Secondly, he identified obtaining “customs and border protection officers” as new territory through which Southwest had to navigate. Prior to the airline’s recent additions, Hobby supported no international flights whatsoever, so Southwest needed to prepare carefully for the particular nuances of flying abroad.
Kelly concluded by noting that Southwest’s growth reflects its fundamental goal of providing affordable service and broadening its reach to more customers: “We go in, we lower fares, and it makes flying affordable,” Kelly said of the airline’s approach. “We don’t get to do this everyday,” referring to the surrounding festivities, “but this is what we do.”
“It’s all about transfarency,” he proclaimed, touting Southwest’s newest marketing slogan, and joked as the only problem was that “[he didn’t] get to be on that flight to Cancun.”
Mario Diaz, Houston’s airport director, addressed the audience next, perhaps receiving the most thunderous applause. Diaz oversees both of the area’s most significant airports, George Bush Intercontinental Airport (IAH) and Hobby. He expressed that much skepticism surrounded the project from the start: “A lot of people who looked at this facility said ‘you’re not going to make it,’ But we made it,” he proclaimed.
According to Diaz, the introduction of international service from Hobby marks a big and necessary step for the city of Houston at-large. He emphasized the need to connect “this culturally diverse city with the world.”
Houston’s mayor Annise Parker was next in line. She cited some difficulty from the federal government during the process, which “[she wasn’t] quite sure was ready for our international passengers.” Furthermore, pushback from “another airline” injected some tension, she briefly added. While she left the airline’s identity unnamed, United Airlines, which maintains a prominent hub at George Bush Intercontinental Airport (IAH) across town, vocally opposed allowing Southwest to fly internationally from Hobby on numerous occasions.
While the first international flight out of the facility was bound for Cancun, a traditionally-leisure oriented destination, she believes that the expansion captures well the interests of both “the leisure traveler and the business traveler.” Flights to Mexico City, for instance, connect Houston with a key business market south of the border. She described working with Southwest, which the city knew would “negotiate in good faith,” as a “good partnership.”
Other speakers at the news conference included Gene Green, a Congressional representative from Texas’s 29th district, and Gil Kerlikowske, on behalf of the U.S. Customs and Border Protection.
Gary Kelly wrapped up the news conference by presenting Mayor Annise Parker with an enlarged ceremonial passport, celebrating the freeing of Houston Hobby.
The effect of the new terminal on Hobby as well as the broader Houston area should be huge. A study commissioned by the Houston Airport System estimates the facility will impact the region in an economically material way. The international expansion should add approximately 10,000 jobs and inject about $1.6 billion annually into the area, reinforcing the local economy. The study also expects the terminal to bring an additional 1.6 million fliers annually to the area, increasing passenger traffic through Houston.
Southwest entirely financed the project, which it happily announced last week clocked in at about $10 million under budget. Due to its investments in the terminal and its status as the airport’s primary tenant, Southwest will maintain exclusive access to four of the five gates, with the last one open to common use.
With Southwest’s growth, the stars are shining a bit more brightly in the Lone Star State these days. What started as a modest link along Southwest’s original intrastate triangle has grown into one of Southwest’s largest cities operationally and an asset to the city of Houston. No doubt, it’s a big day in Houston.
And as Southwest Flight 305 lifted off from Hobby, international traffic can now officially say hello to Houston.