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Oct. 22, 2005
Copyright © Las Vegas Review-Journal


Will Southwest land in Las Vegas?

Airline execs say move possible without repeal of law limiting flights




Click image for enlargement.



Passengers wait to board a Southwest Airlines plane Wednesday at the C Gates at McCarran International Airport. Southwest has 201 daily flights from McCarran.
Photo by John Gurzinski.

Las Vegas would seem to have a good shot at becoming the new home for Southwest Airlines if the airline decides to move its headquarters from Dallas Love Field, but McCarran International Airport has no plans to actively pursue the airline, officials said this week.

Southwest Airlines raised the possibility of leaving Dallas on Tuesday when it sharpened its stance on relocating if it can't win repeal of the Wright Amendment.

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"There could be a time, if we continue to have a modicum of success, that it would be a bit odd for us to have our headquarters at one of the smallest posts in our system," said Colleen Barrett, Southwest's president.

The 26-year-old Wright Amendment -- which limits commercial service from Love Field to Texas and nearby states -- could force the airline to relocate its operational hub and thousands of employees to an airport where it does more brisk business.

And no airport claims more of Southwest's business than McCarran. The Las Vegas airport is Southwest's No. 1 port, with 201 daily departures, said airline spokeswoman Beth Harbin. Officials at McCarran say the airline operates 36 percent of all flights into and out of McCarran.

Helane Becker, an airline analyst with the Benchmark Co. in New York, said the volume of flights Southwest has at McCarran means the airport has a shot at wooing Southwest's headquarters should the company decide to leave Dallas.

"Depending on the tax incentives a city came up with, Southwest would go to a market where they had a lot of operations," Becker said. An airport looking to land an airline's headquarters could improve its chances by offering benefits that include lower landing fees, lower terminal rates and space for on-site corporate offices, Becker added.

But Rosemary Vassiliadis, deputy director of the Clark County Department of Aviation, said department officials would not be willing to offer lower operating fees at McCarran to attract any airline's headquarters. At just less than $5 per passenger, Vassiliadis said, McCarran's fees are already in the bottom third among all airports; the national average is around $6 per passenger. Plus, the concessions would be unfair to other airlines, she said.

"We don't discriminate amongst our carriers. We offer a turnkey operation to everybody," she said. "We are 100 percent full, and we don't need to entice anybody to come. Offering different rates to different airlines would not be the proper thing to do."

If Southwest expressed interest in moving to Southern Nevada, Vassiliadis said, officials at the department of aviation would follow the same process they apply to any airline that wants to expand service or lease space at McCarran: "We would sit down with them to see what they need and what we have available. We would look at what the flight expansion would be, and if it were a headquarters operation, we would need to see whether they wanted offices on-site."

Airport officials would not actively pursue Southwest, though.

"What we care about at the airport would be the actual number of flights. If they wanted to move jobs here, that's wonderful for the community, but we would have to concentrate on the efficiency of flight operations," she said.

Harbin said Las Vegas has provided sustained growth for Southwest.

"Las Vegas has been a wonderful market for Southwest in that there is so much interest in Las Vegas as a destination from any point in the country," she said. "It seems like any service we put into Las Vegas is gobbled up almost immediately. From a business standpoint and a customer standpoint, Las Vegas has certainly been successful."

Should it move to McCarran, Southwest could quickly become a major employer in Southern Nevada. Harbin said the company employs about 5,500 workers at its Dallas headquarters.

However, Harbin discounted the near-term possibility of a move. Southwest has been based in Dallas for 34 years, she said, even though Love Field has been a small destination for the airline. The company has invested heavily there in building flight training centers, data hubs and maintenance training locations, and many of its employees are long-time Dallas residents who might be loath to move.

"It's not an easy task to just pull up those stakes," Harbin said. "It's something we would have to give much more thought to before it would even become a glimmer of reality."

Southwest Chief Executive Gary Kelly moved Thursday to squash any rumors that the airline has plans to move its headquarters, despite comments earlier in the week by Chairman Herb Kelleher and Barrett.

"It's not that we're out there promoting this idea, but the question gets asked would we move our corporate headquarters," Kelly said. "Arguably there's a scenario that it just doesn't make sense to have Dallas as our headquarters, but there is absolutely no effort under way, any thought under way, to move our corporate headquarters at all."

On Sunday The New York Times quoted Kelleher as saying "we may have to begin casting about for a place that's more efficient to operate."

Kelly has noted in the past, also, that Dallas "wouldn't even make the first cut" if it was selecting a headquarters for the first time now because of the flights restrictions.

American Airlines and Dallas-Fort Worth International Airport oppose Southwest's effort to expand in Dallas.

Southwest has rejected offers to move to DFW Airport, saying it couldn't be as efficient at the bigger airport or compete against American and sister American Eagle, which operate about 800 daily flights at DFW.

Wright is relevant to where Southwest locates its headquarters in part because the law makes bringing staffers together for meetings from the carrier's far-flung operations more difficult.

Because they must switch planes to get to Dallas from either coast, managers may need to clear three days off their calendars for a single day-long meeting.

"It is logical to think that if you can't get your people in here for training and meetings, that we might need to look at another location," Southwest spokeswoman Ginger Hardage said.

The Associated Press and Knight Ridder Newspapers contributed to this story.




• The Wright Amendment limits commercial service from Dallas Love Field to Texas and nearby states.

• McCarran International Airport is Southwest's No. 1 port, with 201 daily departures. Airport officials say the airline operates 36 percent of all flights into and out of McCarran.

• Other top ports for Southwest include Phoenix's Sky Harbor International Airport, with 196 daily departures, and Chicago's Midway International Airport, with 192 daily departures.
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