Southwest to Resume Flights to S.F.
By Bloomberg News
Southwest Airlines Co., the largest low-fare carrier, will resume flights to San Francisco this fall following a six-year absence, after changes at the city’s airport cut aircraft delays and reduced costs.
San Francisco International Airport has added terminals since Southwest left in 2001, reducing congestion that had cost the airline in widespread delays, Southwest spokeswoman Marilee McInnis said Friday.
Southwest’s profitability is based in part on minimizing the time its planes are on the ground. The Dallas-based airline, which got its start by focusing on small airports with low costs, has turned its attention to larger ones such as Washington Dulles, Philadelphia and Denver in recent years.
“If it doesn’t knock them off their schedule, it’s a rich market and probably worthwhile,” Ray Neidl, a Calyon Securities USA Inc. analyst in New York, said. “If the problems have been fixed, it’s logical for them to go back.”
San Francisco International “has improved operationally and is a more cost-efficient airport, and Southwest is a far larger airline than it was in 2001 and better able to support this type of operation,” Chief Executive Officer Gary Kelly said in a statement.
Southwest, which had 14 flights a day in San Francisco in 2001, will return to the city “in a meaningful way” in early fall, the airline said in the statement, without giving details.
McInnis declined to comment on Southwest’s expected costs in San Francisco, saying talks with airport officials continue.
“It’s well within our affordable range,” she said.
When Southwest returned to Denver last year after a 20-year absence, the airline said its cost to board each passenger there would be about $9. The average cost across the company’s system is about $5, Southwest said.
Southwest’s readiness to take on higher-cost airports is a sign of Kelly’s leadership, Neidl said. Kelly became Southwest’s chief executive officer in 2004 after serving as chief financial officer since 1989.
“He’s willing to do a few things that they weren’t willing to do before,” Neidl said. Southwest is the only major U.S. airline to remain profitable every quarter since the Sept. 11 terrorist attacks. It last had a quarterly loss in 1991.
San Francisco is only the fourth airport Southwest abandoned in its 36-year history. The others are Denver, Houston’s George W. Bush Intercontinental and Beaumont, Texas.
Southwest will probably restart San Francisco service with at least 14 flights and won’t reduce flights at other Bay Area airports, McInnis said. Southwest has 142 daily departures at Oakland International and 77 at San Jose International.
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