Wn Considers Leaving Sea

[KCFlyer]

Their fuel hedges are running out shortly and they are starting to realize that they need to save money where they can. They soon will be having the problems the other carriers are having. The employee costs with the increase in fuel will be giving them fits, but they should have a few buck put away for a rainy day.

[post="281365"][/post]​

Their fuel hedges are thru 2009 I believe. But why do y'all think that they are just sitting around, high fiving about fuel hedges and doing nothing more? I believe one reason that they are still profitable is because they were living the good times like they were bad times...and constantly looking for ways to keep costs down. Why would that have changed just because of fuel hedges which, by the way, they have been doing for years?

 

[luver41]

[

Their fuel hedges are running out shortly and they are starting to realize that they need to save money where they can.

From 1st quarter 2005 earnings release; http://www.southwest.com/investor_relation...y_earnings.html



"We are 83 percent hedged for second quarter 2005 with crude oil prices capped at $26 per barrel. Based on current market conditions, we expect our jet fuel costs per gallon for second quarter 2005 to exceed first quarter 2005's 90.3 cents. We remain 85 percent hedged for second half 2005 at $26 per barrel; 65 percent in 2006 at $32 per barrel; over 45 percent in 2007 at $31 per barrel; 30 percent in 2008 at $33 per barrel; and over 25 percent in 2009 at $35 per barrel."

 

[WNrforlife]

These tree-huggers should have thought of the noice before they moved next to the airport. They better prepare themselves, because Southwest is moving in whether they like it or not!


Thursday, July 14, 2005

By JENNIFER LANGSTON
SEATTLE POST-INTELLIGENCER REPORTER

During the Sunday sermon at Georgetown Gospel Chapel, the Rev. Leroy Hedman stops in midsentence when planes from Boeing Field rattle the rafters of his church.

His lavish gardens -- offering tomatoes, squash, corn, peas and pumpkins to residents lacking food -- were first planted to memorialize a church member murdered under the freeway. In a residential area sandwiched between Superfund cleanup sites, raised garden beds keep vegetable roots away from soil polluted by heavy metals.

Those urban and industrial stressors have kept Georgetown affordable -- attracting artists, anarchists, entrepreneurs, musicians, immigrants and young families who have infused the neighborhood with new energy.

But a proposal that could bring Southwest Airlines to Boeing Field, whose runway dead-ends into the neighborhood, could kill the fragile quality of life that residents have worked so hard to restore, Hedman said.

King County recently announced it had entered into negotiations with the low-fare airline, which has been unhappy over rising costs at Sea-Tac Airport.

The potential move has also angered homeowners in Magnolia, Beacon Hill and other communities who've spent a decade pushing to reduce noise from planes at Boeing Field, formally known as King County International Airport. Some West Seattleites are leery of a proposed flight path that could bring air traffic closer to their shores.

In Georgetown -- where residents have fought crack houses, prostitution, sex offender housing, truck traffic and a proposed city of Seattle dump -- adding at least 80 daily jet flights to Boeing Field feels like a personal insult.

"We've had a lot of issues here but the quality of our air and our sound is something we can't do anything about. For Southwest Airlines to dump on us is unconscionable," said Hedman, 57, who has led his congregation for two decades.

"This is Georgetown -- you have to fight for survival down here one way or another."

King County Executive Ron Sims, whose office is obligated to consider whether Southwest can be accommodated and sees possible financial benefits, said the county has gone to great lengths to address noise issues under Boeing Field flight paths.

The airport has worked with pilots to minimize noise on takeoffs and landings, implemented quiet hours and developed alternative approaches that shift flights away from residential areas to Elliott Bay.

The Federal Aviation Administration just approved plans to install double-pane windows, insulation and other soundproofing improvements in up to 1,800 eligible homes close to Boeing Field. Because of federal funding limits, it could take at least a decade to reach everyone entitled to the assistance.

Southwest, which now serves 2.2 million passengers a year out of Sea-Tac, could bring additional revenue to the county-owned airport, which lost money two years ago and has struggled to pay for maintenance and repairs.

Sims said the goal is to keep the airport self-supporting, so taxpayers don't have to bail it out.

Southwest, expected to submit a formal proposal this summer to move to Boeing Field, would have to fund a larger passenger terminal, parking garage and most other improvements, King County officials say.

The airline has also agreed that in favorable weather it would fly a new over-water approach that aims to keep noise away from Magnolia and West Seattle. The new route is available only to planes with Global Positioning Systems, but so far has generated few complaints, officials say.

Critics point out that it's the FAA, not pilots, that controls which approach is used. That promise also wouldn't offer relief to close-in neighborhoods such as Georgetown, South Park and Beacon Hill.

Sims said that despite the positive transformation in Georgetown -- with fixed-up bungalows that have baby pools, kayaks or art projects on the front porch -- it's impossible to sugarcoat the fact that it's been next to Boeing Field for 77 years.

"It's a very unique neighborhood and a special neighborhood, but it's still a neighborhood in the middle of an industrial area at the foot of an airport," he said. "We've done everything we can to deal with the noise issues as aggressively as we can."


Gentrifying Georgetown

Mark Cooper, who bought his turn-of-the-century Georgetown home last year, relishes noise. The 38-year-old software instructor collects sound, recording skipping needles or dripping faucets that he weaves into compositions.

Sitting on his front porch, he hears the dribbly whine of a single-engine plane and can't complain. Pulsating helicopter rotors roll around pleasantly in his brain.

But when a hulking UPS cargo jet descends several hundred feet above the neighborhood, even he can't find anything to like about the noise.

"That sounds like a hole being punched in the sky and all the air's being sucked out," he said.

Georgetown is hardly the place for people requiring peace and quiet. Many relish it precisely because you can hammer on metal or hold band practice at odd hours. Only 2 percent of the largely industrial neighborhood is zoned for single-family homes.

Those who bought here say they were willing to deal with known problems, such as drug dealing and an apartment building catering to sex offenders. They listened to the existing airport noise and decided that was OK -- even the occasional ear-shattering military jet. With a population hovering under 1,500, Georgetown residents have built a neighborhood with a feisty and intensely creative sense of place, where people gather in the park to watch home movies or Fat Albert cartoons projected on the side of a house.

Metal sculptures line planting strips, and homes are as likely to be decorated with pirate flags or gas masks as rosebushes. In defiance of the concrete surroundings that have spewed pollution, lush flower gardens with pesticide-free ladybug signs abound.

Many say turning Boeing Field into a secondary passenger airport -- with Southwest looking to expand and competitors such as Alaska Airlines now threatening to move flights as well -- wasn't something anybody imagined when they decided to invest here.

Introducing more disruption or becoming a mini Sea-Tac could drive away the kind of people who've worked hard to make Georgetown a better place, anxious residents say.

"We're like little plants trying to grow in sidewalk cracks," said Megan Davis, 32, who works for a non-profit gardening program for homeless youth and moved to Georgetown five years ago. "Now there's going to be more stress fighting this."

Southwest spokeswoman Marilee McInnis said the airline is sensitive to neighborhood noise concerns and because of that uses quieter Boeing 737 jets.

McInnis lives under the flight path at Love Field, the airline's home base in Dallas. The planes that rattle her windows or stop phone conversations in their tracks don't belong to Southwest, she said.

The company famous for offering low fares has said that rising fees at Sea-Tac -- which will fund major terminal improvements and a third runway -- have forced Southwest to consider a cheaper home.

But Cooper questions why residents should be subjected to more noise and a homegrown airline like Alaska should suffer, just so an aggressive, out-of-state company that already reaps substantial profits can improve its bottom line.

"This is an effort to build a genuine community here and what you have is the losers and drug dealers being replaced by people who care about their homes and their kids and each other," he said. "That's what makes a town great -- not that you can get a $90 air fare to Portland."


'Better neighbors'

Larry Phillips, chairman of the King County Council that would ultimately have to approve a lease with Southwest, shares a high degree of skepticism about the proposed move.

He wants to know how many millions of dollars it would take to upgrade roads, freeways and facilities at Boeing Field. Phillips also questions whether that's necessary, given the billions the region is investing to renovate and extend light rail to Sea-Tac.

The Magnolia resident has also spent a frustrating decade trying to get Boeing Field officials and the FAA to develop another flight path over unpopulated Elliott Bay. It could be used by a wider variety of planes than the current GPS route, and would provide relief to sleep-deprived residents in Magnolia.

"Ten years ago, we said, 'You need to be better neighbors to the communities you serve.' I don't think they're capable of it," he said. "We keep giving them alternatives and they keep sitting on their hands."

King County airport officials say that alternative flight path will be tested later this year to determine if frequencies interfere with the commonly used approach over Magnolia. That's been in existence for more than 50 years and, according to officials, offers more precise guidance, particularly important when visibility is poor.

The proposed flight path has caused controversy in Alki and Pigeon Point, where some residents object to planes flying closer to their homes and the Duwamish greenbelt.

Pete Spalding, chairman of the Pigeon Point Neighborhood Council, said West Seattle's battle is somewhat unrelated to a potential move by Southwest, since that's years away and the airline could potentially use a different Elliott Bay approach.

"One issue is Southwest looking for a cheaper place to land and the other is Magnolia trying to push noise onto somebody else," he said. "But they obviously forgot to do their homework because we're going to fight this tooth and nail."

Phillips and other proponents of the alternative Elliott Bay route say they're not interested in making the problem worse for other neighborhoods.

They believe noise data collected during test flights will show no effect on West Seattle.

Dan Labriola, a naturopath and pilot who's also been working on Boeing Field noise issues for a decade, said the announcement that the county was talking to Southwest felt like a huge betrayal to him.

He wishes he could take credit for lighting up his bedroom at night, but sadly, it's the cargo jets taking off from Boeing Field in the wee morning.

Even if Southwest and every other major passenger carrier agrees to use an Elliott Bay route, they'd still have to fly over Magnolia in the worst weather, he said.

"If you add several hundred flights a day even for those few days, it would be like parking under the approach to LaGuardia," he said. "It would just be non-stop noise."

 

[whlinder]

http://seattletimes.nwsource.com/html/loca...outhwest21.html

Proposing to build a terminal. Doesn't really say who will pay for it.

 

[tug_slug]

http://seattletimes.nwsource.com/html/loca...outhwest21.html

Proposing to build a terminal. Doesn't really say who will pay for it.

[post="283080"][/post]​

Sounds like Southwest is going to pay for it.

Southwest Airlines proposed building a $130 million terminal and parking garage at Boeing Field in Seattle, calling it "a nice, big, shiny, new, expensive gift" to the county that would boost employment, provide lower fares and even help sell Boeing jets.

"We're going to buy a lot of new Boeing 737s, and we're going to fly them to a building we built and gave to you," Ricks said.

 

[corl737]

It's apparent that SWA has it's game plan in mind and has now laid it's cards on the table. Giving a 4-year lead time serves to make this announcement a no joke, we're not bluffing shot across the Port of Seattle's bow that they are serious about moving. It also gives SEA-TAC officials a chance to come up with a cost reduction plan of their own that would be palatable enough to let SWA stay there.

These are indeed interesting times in the airline and airport business.

 

[ngneer]

This is from the press release:

Southwest Airlines Releases Economic Proposal to Serve King County International Airport
SEATTLE, July 21 /PRNewswire-FirstCall/ -- Southwest Airlines (NYSE: LUV) today released its economic proposal, detailing the $130 million capital investment Southwest Airlines will make at King County International Airport. Southwest is proposing to construct facilities in order to move its airport operation to King County International Airport, from Seattle-Tacoma International Airport, where ever-increasing costs have become an obstacle to growth. To view the entire proposal, click on this link: http://www.southwest.com/about_swa/press/k...ty_proposal.pdf

Southwest will use its own financial resources for the approximately $130 million improvement of King County International Airport (KCIA). Southwest Airlines proposes to build an eight-gate commercial airport facility, which will include parking garage, passenger concessions, rental car provisions, special accommodations for cruise traffic and buses, and the necessary facilities for Southwest's flight operations, including gates, office space, baggage claim, and baggage screening.

If approved by King County, Southwest's operations would start at KCIA in 2009 with 60 daily flights, and plan to grow to 85 flights. Under the terms of the proposal, Southwest will own, manage, maintain, and operate the terminal. Southwest will pay King County landing fees and land rental rates stipulated by the County. After the 50-year agreement expires, ownership of the entire facility will transfer to King County.

It looks to me pretty similar to what they've been doing at ISP, except more needs to be done at KCIA (a parking garage, new ticketing and baggage claim in addition to the eight gates). I guess things must have worked out well at ISP so they're willing to do it again, once more with feeling.

 

[corl737]

By offering to fund the entire project themselves they have set the standard for any other airline that wants to tag along to Boeing Field. Does Alaska have the extra $100+ million in cash sitting around to build their own facilities? Doubtful. This is a shrewd method of reducing potential competition. It also shows the community that SWA only wants to be able to operate at the lowest possible costs so they can pass the savings along. Not demanding public funds is a huge display of goodwill.

Also, by being first, the resistance to some airline traffic at BFI is probably at its lowest. Any followers will be "making it worse" and could face stiffer opposition.

 

[Flying Titan]

Corl737 -
I agree w/ everything you said except for the part about being first causing the resistance to be at its lowest. I would imagine that the first carrier to move in would receive the stiffest opposition. Once the door is opened a crack, it's a whole lot easier for others to come along and kick it wide open. Any airlines that follow will have the way cleared for them by SWA, as long as they are willing to meet the same standard set by SWA.

 

[luvn737s]

I think SWA should go in there and build a shiny new terminal. And then the city council can shut them down. A little drywall and windows and you can turn that parking garage into low cost housing.

If SWA wants to be in the terminal-building business, they should mention that to the city of Phoenix or Las Vegas when they want bigger digs.

Kelly should learn that being the 800lb gorilla is a role that doesn't suit SWA.

 

[WNrforlife]

This is going to be a slam dunk. Next on the horizon - addressing the excessive fees at PDX. What airport in the Portland area can we build a new terminal. Somewhere in Vancouver, WA perhaps, or maybe Salem?

 

[corl737]

Kelly should learn that being the 800lb gorilla is a role that doesn't suit SWA.

[post="283165"][/post]​

This is definitely a departure from the traditional "underdog" role. I don't think it out of line, however because like it or not, SWA is the 800 lb gorilla in the low-cost-carrier arena.

The question begs, however, why do you think Kelly's the one driving the change in attitude? While I'm postive he has a lot of input, don't forget that Herb is still Chairman of the Board and has to go along with this too. I think Herb's proven that he's the master of playing whatever role is most effective in a given situation.

The airline industry is poised for a major shake up ... and it's a whole lot better to be the one doing the shaking than getting shook!

(I do like Kelly in a Gorilla suit better than his Halloween "Gene Simmons" costume!)

 

[bwipilot]

For those who haven't been to Islip, the SWA plan looks a lot like what happened there. SWA wanted a new facility, city didn't wan't to pay for it. SWA said, "We'll build it"--and SWA did. It's a beautiful facility built for a reasonable price (that part's a guess but would be surprised otherwise) plus SWA gets to control the building: concessions, layouts, etc. Did a little math, 48 flights per day * 80 pax per plane * $13 per pax * 365 days/year = about $18.2 million per year. That should easily cover the payments on the facility. The project looks like an even better idea if Sea Tac starts charging upwards of $20 per pax.

 

[ngneer]

The figure that I've seen for the total cost of the 8 gate facility at ISP is $71 million. According to SWA, when the final phase is completed (probably next April), the entire facility becomes the property of the Town of Islip. In return, SWA gets essentially free use of it for 25 years and a cut of the concession profits. The Town of Islip gets no cut from the concessions (which has caused some to criticize Islip Town Supervisor Pete MacGowan for giving SWA a "sweetheart deal"). As part of this expansion, the Town of Islip was responsible for adding about 2,500 parking spots.

Prior to SWA coming to ISP, the Town of Islip had done a very nice job expanding the ticketing and baggage claim areas. That expansion was done as part of the deal for SWA to come to ISP.

As bwipilot said, it's a beautiful facility and a much needed improvement. I'll be there again next month with my family when we go away on vacation.

Based on the $71 million for expanding ISP, it sounds like $130 million for expanding Boeing Field sounds about right.

 

[luvn737s]

If I was an airport manager at any WN station, why shouldn't I balk at making improvements for their exclusive use if I know they are willing to pay for it themselves? It's really a no-win for WN if they move and spend their own money, the old airport (SEA, in this case) may succumb to pressure to lower fees for the remaining airlines, thus eliminating the cost advantage of moving.

What's the old saying? Who- and their money is soon parted?