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Council is skeptical of Hobby International

Not so clear skies for expanding Hobby Airport into an international terminal.

A consultant’s study that forecasts an economic boon for Houston if Hobby is made into an international airport came under fire from city council members Monday as “biased” and “custom-made just to satisfy the demand of Southwest” Airlines, which is asking the city for permission to build a $100 million Customs facility and five-gate expansion at Hobby.

In a three-hour grilling of Houston Airports Director Mario Diaz, council members complained that the numbers in the study strained credulity, that they were kept in the dark about Southwest’s pitch for at least eight months, that airport officials have been condescending and that council and others should have been asked for input before Diaz recommended approval of the Hobby expansion.

According to the study, an international Hobby would lead to the creation of 10,000 jobs and inject $1.6 billion annually into the Houston area economy, as well as lower air fares. Comments from the general public have been overwhelmingly in support of Southwest’s plan to start flying to Mexico and the Caribbean.

The study is here; it and other supporting documents can be found here. I’ve skimmed the study but have not given it a full read yet.

“What may be the largest issue perhaps of the century, you all have blown it in my view,” Councilman C.O. Bradford told Diaz. “This rollout simply has been a complete disaster. I mean lack of transparency, arbitrary time lines, total disregard, disrespect for council. It’s just unconscionable.”

Councilman Al Hoang said, “I feel that this report is already biased, it’s already custom-made just to satisfy the demand of Southwest.”

[...]

Councilman Andrew Burks questioned the numbers in the report and singled out a projected fare of $133 to Bogota.

“You can’t even fly from Houston to Lubbock on Southwest for $133,” Burks said. “I really want to just throw this proposal out the window because, right now, when I see numbers that can’t match, it just don’t work for me.”

I can’t address Council members’ complaints that they have been disrespected, but from what I have seen of the study it seems pretty sensible to me. The case for international flights at Hobby is straightforward. There’s currently almost no competition for the market to Mexico and the rest of Latin America. Hobby is well suited to provide low cost carrier flights to that market, and Houston is about as ideal a population center for those flights as you could want. Several other cities have more than one international terminal, and recent history shows that not only can that work, the original carrier winds up increasing service as well. (See also page 18 of the study.) Unlike United, Southwest has other options for its international gateway if Houston passes; Orange County’s John Wayne Airport has a new Federal Inspection Service and would be a good alternative for Southwest.

Like I’ve said, I’m not the expert on this in the family – I’m working on getting her to contribute to this topic once more. I can’t speak to the specific objections Council members have raised. Perhaps the topline numbers – ten thousand jobs! $1.5 billion in economic activity! – are overstated. But honestly, does anyone believe that Houston fliers would not benefit from the increased competition? I don’t get it. I hope this was just Council doing its due diligence and not rejecting out of hand what looks like a good deal to me.

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12 Comments

  1. robert says:

    The reason nothing good ever gets done in this city…. just look at the mentality of City Council. They make me laugh they are pathetic and small minded… not to mention waiting greedily for a nice job/donation from United next go around!

  2. Jj says:

    One thing caught my eye, and so I looked onto it:

    The airport director’s report and recommendation cites Chicago as having two international airports and got expanded service as a result. While not the best source possible, Wikipedia lists the following airlines that have  international flights out of Midway in Chicago:  
     VivaAerobus: Monterrey
     Volaris: Guadalajara, Mexico City, Morelia, Zacatecas
     
    Two airlines and 5 cities in Mexico? And thus Chicago is one of 4 “successful” models that Houston needs to follow?  This is not exactly persuasive to me.  It makes me think that the airport director is exaggerating in order to bolster his argument/recommendation.  And that’s what people with weak/wrong positions do.

    Not knowing much else, that makes me wonder what is going on here.

  3. OffTheFitz says:

    Jj,

    Chicago is an excellent example to foster with the size and proportion of Houston. With two almost identical airports within both cities, Chicago thus qualifies as a successful model even coupled with the fact that Southwest only fly internationally to Mexico anyhow.

  4. Temple Houston says:

    I would be more impressed if some councilmembers other than Bradford, Hoang and Burks (Green also?) had spoken against the report. What happened to that weirdo from District A? Am I to understand that she didn’t speak against the report also? I guess United forgot to tell her that Southwest will be flying black helicopters out of Hobby to the border.

  5. Jj says:

    OffTheFitz –

    My point was that the Chicago Midway international flying appears to be of almost no consequence. I don’t know if that is due to City regulation or why. But to point out how much better off Chicago is as a result of flights to 5 Mexican cities and say “we need to do that” just makes no sense to me. The Airport director is essentially saying that he wants SW to fly out of Hobby to Calgary, Vancouver, Toronto, East Moose and Quebec City, and somehow that will make all the difference in the world.

  6. robert says:

    The demographics and fares from Houston to CA, SA, Carib and Mexico are a bit different.

    I agree with Temple Houston, Look at the members opposed or upset… I’d be curious if any of them ever flew these routes.

    And to address CM Burkes question about not believing the fare to Bogota…. just take a look in FLL at what Spirit and Jetblue fly these routes for… I believe they will do it from Houston as well, perhaps not ALL flts ALL the time, but it would be offered.

  7. Steven says:

    I get the impression that the Council members speaking up the loudest are just hoping to parlay their “concerns” into campaign contributions by either airline. This is nothing new nor should it surprise anyone.

  8. Mainstream says:

    As a frequent flyer, I would welcome other choices to the Caribbean and to Central America. During the price wars in Europe I had friends who found $20 flights from Spain to Germany, and I would not be surprised to see cheap flights pop up certain weekends to Bogota from Hobby. I hope my council members will support expanding international flight to Hobby.

  9. Scott Schilling says:

    Airtran (as Southwest subsidiary) begins service to Cancun from Midway this summer. Also Cancun and Mexico City from San Antonio. Just saying.

  10. [...] reaction at least it’s not clear how much of it has carried over. Of course, if you go by Council’s reaction you get a different picture; Mayor Parker, on the other hand, is more in line with public [...]

  11. Crazy otto says:

    I am late on this but regardless of the benefit to SW, the contributions to council members etc.. don’t forget who will be paying for the $100 million plus in upgrades to Hobby (that would be the Taxpayers). the Airport system has spent millions at IAH upgrading the international terminals and as a taxpayer I would like to see a proper utilization of the facilities we have already. SW has nothing to lose.. if this plan fails. The Mexican, Central American, and South American market is not an easy one to make money in.. especially for a carrier like SW. They will not only have US carriers to worry about but also foreign flag carriers that will not play nice when attacked by SW….

  12. Ross says:

    Crazy Otto, SW is paying the $100 million, not taxpayers. Who cares if it fails, it’s SW’s money.

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