=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/c/a/2004/06/05/BUGEI7166K= 1.DTL --------------------------------------------------------------------- Saturday, June 5, 2004 (SF Chronicle) Oakland-Southwest love fest/Airport starts ambitious construction program s= erving low-cost carrier David Armstrong, Chronicle Staff Writer Back in 1988, Oakland International Airport was a sleepy little bayside operation that handled 3.8 million passengers a year. A year later, Southwest Airlines, the rambunctious, fast-growing low-fare carrier from Texas, arrived on the scene and began flying out of Oakland. Today, lifted by Southwest, which accounts for 60 percent of the passengers and flights at Oakland, the airport handles some 14 million passengers a year. As a consequence, it has embarked on an ambitious construction phase designed at least in part to please Southwest, by far its most important tenant over the past 15 years. Oakland International, the Bay Area's second-largest airport, is remaking and expanding Terminal 2, which will be largely occupied by Southwest. The project started last month and is expected to be completed by the fall of 2006. It will result in five more gates for Southwest, which employs 2,500 people at Oakland airport and uses Oakland as a prime West Coast hub. "On the West Coast, Oakland is right up there with L.A. for Southwest," said Ron Kuhlmann, a vice president at Unysis R2A Transportation Management Consultants. "Southwest has, with the exception of United at San Francisco International, captured the coastal route between the Bay Area and Southern California. What they've done is established themselves as a viable alternative (to the big legacy carriers and SFO)." Nationally, Southwest continues to expand, rolling out more nonstop, transcontinental flights to supplement its mainstay short hops in regional markets. Last month, Southwest initiated service in Philadelphia, the nation's fifth-largest city, where airline analysts expect it to challenge struggling US Airways, which emerged from Chapter 11 bankruptcy protection last year and is still losing money. Southwest now serves 60 cities in 30 states and remains by far the nation's largest low-fare carrier. "In business they always say, 'Don't let more than 20 percent of your business be with one customer,' " said Oakland airport spokeswoman Cyndy Johnson. "But in aviation, that doesn't appear to be the case. Is there risk in hitching yourself to any one customer? Sure. But I think we have picked a good customer." Southwest is circumspect about its plans for Oakland. Spokeswoman Whitney Eichinger said only that Oakland International remains central to Southwest's growth strategy, adding that the carrier has no immediate plans to add to its 122 daily departures from Oakland. Nevertheless, Oakland airport, which handles 204 daily departures by all airlines combined, including large carriers such as United and Delta Air Lines and stylish low-fare newcomer JetBlue, believes Southwest may want to expand there in the longer term. If and when that happens, the airport intends to be ready, Johnson said. "We are completely renovating Terminal 2," she said. It will include new waiting areas, new rest rooms, a centralized food and retail court and expanded ticketing, security and baggage operations as well as "additional stations and offices for Southwest," she said. The changes are designed to help Oakland International catch up with itself. The days of parking across from the terminal less than an hour before takeoff and calmly strolling into ticketing are long gone, thanks to increased security and increased traffic. Indeed, with the rapid growth in Oakland's airline traffic have come longer lines and fewer parking spaces, to the consternation of passengers. The airport is dealing with that problem. It plans to build a seven-leve= l, 6,000-space parking garage near its two terminals. Construction is scheduled to start in early January, with completion in 2007. The price tag for both the terminal remake and the new garage is $500 million. In the interim, private parking operators are expanding their operations, encouraged by Oakland airport's continuing growth. On May 25, Parking Co. of America Airports opened a 2,400-space lot on Pardee Drive near Hegenberger Road and offered free parking (with a minimum 12- hour stay) through Aug. 31. The operator wanted to do something dramatic to introduce the lot, said publicist Jack Lyness, who estimated the loss of parking revenue to the privately held firm, which operates at airports nationwide, at $2 million. Next year, however, the company expects to generate handsome revenue from the Oakland lot, where parking will cost travelers $8.99 a day, comparable to other private lots near the airport. The parking company is working with Southwest to promote its operation in Oakland, where it has operated since the mid-1990s. When passengers book a Southwest flight out of Oakland, Southwest tells them about the free-for-now lot. The first day Southwest began publicizing the new lot, all 2,400 parking spaces quickly filled up, prompting the company to use overflow parking to handle 2,800 cars, Lyness said. The parking lot opeartor pays a fee to Oakland every time one of its shuttle buses between the lot and air terminals rolls onto airport property, he said. Meanwhile, construction at Terminal 2 is moving at a brisk pace. Much of the work is being done at night to avoid disrupting Southwest's operations and inconveniencing travelers, Johnson said. "We have been working with them on the plans," Johnson said of Southwest, the nation's fifth-largest carrier by revenue, which has remained profitable during the economic downturn, the Iraq war and the post-Sept. 11 age of anxiety. Southwest, the role model for a flock of other low-fare airlines such as JetBlue, ATA, America West, Frontier and Air Tran, helped make Oakland the only one of the Bay Area's three major airports to increase its passenger numbers last year. While SFO and Mineta San Jose International Airport slumped in 2003, the number of passengers at Oakland rose 7.1 percent to 13.5 million from 12.6 million in 2002. Oakland airport expands -- The $110 million renovation of Terminal 2 will add five gates, a centralized food court, retail shopping area, and expanded ticketing and baggage handling facilities. -- A 6,000-space parking garage will be completed in 2007. -- A 60,000-square-foot administrative building for the Port of Oakland Aviation Division is planned. Source: Port of Oakland E-mail David Armstrong at davidarmstrong@sfchronicle. com. -------------= --------------------------------------------------------- Copyright 2004 SF Chronicle