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•"1
$OUTH~EST
AIRLINES
CO.
8gbMootgomery
VicePresfdent-AIrportAffairs
P.o.
Ilox
30011
Dalias
1
&l!B576236-10.11
214-71j2-431l5
FaClimlle:214-792..0108(1
E·mall:iXll1.mooCijOll1Elry@WI1co.!:?m
March1,2012Mr.MarioDiaz
-.-----..--:;:-;---;--:;-;<-:---;0--..----.-.------------.-..--..---.-----.---..--..-------..-..--.--------..-.-.
DirectorofAviation
City
of
Houston
16930JohnF.KennedyBlvd.Houston,TX77032DearMr.Diaz,OnbehalfofSouthwest
Airlines,
wewouldliketoformallyrequesttheHoustonAirportSystemtoevaluate
thefeasibility
oftheconstructionofa3-5gateFederalInspectionStation
C'FISI1)
atHouston
Hobby
Airporttoenableflyingtoandfrominternationaldestinations
in
North,CentralandSouthAmerica.As
part
ofthisevaluation.wewelcometheopportunity
to
discussfundingalternatives
with
thegoal
in
mindtomaintainthelowcoststructurewehavehathworkedsohardtomaintainat
Hobby,
.Lastly,asanintegralpartofthefunctionalityofsuchafacility.weseektodetermineajointplanbetweenHASandSouthwesttosolicittheappropriatefederalagenciestosufficientlystaffthisfacility
to
processtheCustomersuponcompletion.Sincerely,
'~f1~
obMontgomery
VicePresident-
Ai
fairs
RECElVED
~AR12012
 
SOUTHWESTAIRUNESCO•
BobMontijomery
•VicePresIdent
AirportAffaire
Love
Fjeld
P.O.Box:JS611
Dallas.TX75235·1611(214)792·4365
bob.montgomary@wncQ.cQm
.
...
,
March13,2012
Mr.
Matio
Diaz
City
of
Houston
DirectorofAviation
P.O.Box60106Houston,TX77032
DearMr.Diazr,
The
expansion
ofinternationalcommercialairserviceprovided'acrosstheHoustonAirportsSystemisacriticalissueforHouston'sfuture.
'Webelieve
that
theembraceofinternational
service
atbothHoustonAirports,i.e.,HoustonIntercontinental
(IAR)
and
HoustonHobby(HOU),will
providesignificant
economic
andcompetitivebenefitstothe
flying
publicandto~e
City
ofHouston.TheopponentofthisInternationalevolutioninHoustonisUnitedAirlines.Asummaryof
their
argumentsprovidedinvariousforums'againsttheevolutioncontainstheirviews
that:
1.ThecreationofInternationalcapabilitiesatHOUwillreverse
Aviation
Policyofover40years,andunderminespreviousinvestmentsinIAH
by
thethen-existentContinentalAirlines.2.Hobbyexpansionwilloverwhelm
Customs
andBorderProtectionservicesandcauseadegradationofcapacity
and
servicesatIAH.,,3.Internationalexpansion
by
evolvingbothairports
is
inconsistent
with
strategiesembraced
by
othercommunities,namelyDallas.
4.ExpansionwillhurtHoustoneconomically.
5.DiversificationwillhurtUnitedspecifically,,6.AnyonecanofferinternationalservicefromIAH.ThereisnoneedforHOU
Customsfacilities.
SouthwestAirlineshasadifferentview.ExpandedandevolvedInternational,serviceofferssubstantialbenefits
for
theCityofHouston,manyofwhicharevoiced
in
thefollowingrebuttalofUnitedAirlines'complaints.
Complaint1:ThecreationofInternationalcapabilitiesat
Hobby
Airport
will
reverse
Aviation
Policy
ofover40years,andunderminesprevious
investments
in
lABby
ContinentalAirlines.
SouthwesthasservedHoustonsinceourinception
in
1971.Wehaveenteredintovariousairportagreementsandparticipated
in
thedesignandfundingsignificantairport
 
"
Mr.
MarioDiaz
Page2improvementsat
bothHOUandIAH.
In
all
that
time
wehavenever
beenawareofanyInternationalPolicyotherthanthatstated
in
HAS'
currentstrategic
mission:
togrow
internationalservice.
Weare
unawareof
any
restriction,limitation,or
representation
by
theHoustonAirportSystemor
by
the
CityofHoustontofocusinternationalservicesat
IAH~Further,weareunaware
of
any
restriction,limitation,or
representation
in
anycontractualagreementbetweentheCityandairlinesservingHouston,
nor
in
any
bondordinancethatwouldleadonetoconclude
that
Houston
hasanypolicyatalltofocus
internationalservice
at
IAH.Thesecondpartofthisarguinent
IS
thatexpansionundenninesprevious,
investments
ill
IAH
by
the
formerContinentalAirlines.Acceptanceofthisargumentwouldleadone
to
close
HOD
altogether,asthesameargumentmustholdtrueofdomestic
service.The
facts
are
thatinternationalservicecomprisesonly21.5%ofthetotalactivityat
JAB,
whichequalsapproximately:thetotaldomestictrafficatHOU.Gatecapacity
being
studiedatHOUisfives
gates
for
international
servicecompared
with
JAR'scurrentinternationalcapacityof35gates.Thisissmallthreat
indeed.Additionally,
UA
operates
inbothTerminalDandTerminal
E.
They
are
considering
constructionof
a
new
TerminalB
International
facility.The
Continental
Airlinesinvestmentwaslimited
toTenninal
E.
which
comprisesonly
about
2/3
ofthe'intemationalgatecapacity.Damagecouldnotoccur
unless
newandcompetingcapacitycaused
a33%decrease
in
existing
IAH
internationalservice.
Giventhe
factthat
low
farecompetition
willstimulatethemarket
and
thereby
increase
demand
atIAR(a
reaction
that
theU.S.Department
of
Transportationhaslongrecognizedasthe"SouthwestBffect"),thisisunlikelytooccur.Statedanotherway,activityali
five
newgates
atHOU
cannotpossiblyeliminatethedemandfor12gatesatIAH.'
Complaint2:ROUexpansionwilloverwhelmCustoms
andBorderProtectionservices
and
cause
adegradation
ofcapacity
andservicesatIAlL
Customsand
Border
Protection(CBP)serviceisnotalimitedorafixedservice.ExpansionatHOUneednotaffect
lAH,
especially
as
"theyhave
a
pre-existinglevel
of
service.
Itis
the
duty
of
theU.S,Government,throughCBP,to
support
internationalcommerce.Thisservicewillprovidebenefits
to
the
City
of
Houston
in
excessof$1,billionannually.StaffingaHOUCPBwill
require
about20agents.Itisunlikely
that
the
City
ofHoustonwouldallowsucha
small
problemtostiflesuchalargebenefit.Furthermore,CBPstaffingisallocatedthroughtheagency'sstaffingmodel
and
thusresourceswillbeprovideddepending
on
thedemandforservices.
An
analogoussituationis-presentedthroughthestaffingneedsofTransportationSecurityAdministration
(TSA).
Forthepasttenyears,Southwest
has
expandedintomanynewmarketsandaddednewfacilitiestotheairportsweserve.YetTSAhascontinuedtostaffourcheckpoints,regardlessofthebudgetrestraints
imposed
on
theagency
orarbitrarycaps
onTSAstaffing.Finally,
designandconstruction
of
any
HOUFederal
Inspection
Service
willprecludeinitiationofinternationalserviceuntil2015.Thisleavesampletimeforthe
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