ANALYSIS: Southwest continues prepping for international expansion

Washington DC
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Southwest Airlines is moving forward with a plan to add international flights to potential destinations north and south of the US from some of its primary airports, including William P. Hobby airport in Houston and possibly Baltimore/Washington airport.

The airline's chief financial officer Tammy Romo says on 13 June that the Dallas-based carrier hopes to roll out a new reservation system capable of handling international bookings in 2014, a step that will be followed by the launch of new international flights that year or in 2015.

Romo made the comments at the Deutsche Bank Global Industrials and Basic Materials Conference.

Southwest currently flies only domestic routes and flights to the US territory of Puerto Rico, but its subsidiary AirTran Airways serves nine international destinations in Mexico and the Caribbean, according to AirTran's website.

Although AirTran has an international reservations system, Southwest must develop its own system in advance of assuming international AirTran flying or launching new routes, Southwest tells Flightglobal.

"We anticipating wrapping that up in 2014," Southwest says. "That would then allow us to begin selling and operating internationally."

AirTran Airways international routes as of June 2013. Innovata Flightmaps Analytics

Though the airline says no firm decisions have been made about where to fly internationally, it adds that Southwest will initially assume AirTran's international flying and launch new service to "near international destinations".

Some routes could be to destinations as far south as the "northern rim of South America" and to Canada, the airline says.

Although Southwest says that its Boeing 737-700 aircraft and, particularly, the 737-800, are well suited for such routes, it says there is "work to be done" to ensure that its aircraft are ready for longer overwater flights.

"We have been updating our fleet to have that capability," it says.

Some new international service will depart from Houston Hobby, where the airline is constructing a new five-gate international concourse and US customs facility, part of a $156 million project expected to be completed in 2015.

Houston Hobby currently lacks facilities to handle international flights.

Baltimore/Washington (BWI), Southwest's fourth largest hub with 181 daily departures, is also "certainly in play", Southwest says.

"Once we bring international service into Southwest, [BWI] would be a natural point where we would be able to add international service," the airline says.

Paul Wiedefeld, BWI's executive director, says the airport is analyzing gate capacity and international capabilities in preparation for potential new Southwest international flights.

"Southwest is moving more toward the international part of their portfolio," Wiedefeld tells Flightglobal. "Given that we are such a large part of their operation on the East Coast, we are in positive to support them."

Southwest and AirTran account for roughly 70% of traffic at BWI, and AirTran has recently added a number of flights from the airport to international destinations, including those in the Dominican Republic, Aruba, Jamaica, Bermuda, Nassau and Cancun.

Southwest declines to discuss other international launching points other than to say they likely include "some of its largest airports".

The carrier's other top airports by capacity include Chicago Midway International, Las Vegas McCarran International, Phoenix Sky Harbor International and Denver International.

Southwest reported $159 million in operating revenue attributed to AirTran's international service in 2012. The company's total operating revenue that year was $17.08 billion, according to its 2012 annual securities filing.