http://www.dallasnews.com/sharedcontent/dws/bus/stories/100104dnbussouth west.56b78.html =20 =20 Southwest may consider D/FW Airport=20 Gates to be vacated by Delta in February could entice carrier 06:22 AM CDT on Friday, October 1, 2004=20 By ERIC TORBENSON and SUZANNE MARTA / The Dallas Morning News=20 Southwest Airlines Co., which for years steadfastly avoided service from sprawling Dallas/Fort Worth International Airport, may be softening its stance.=20 The discounter's chief executive said Thursday that executives are closely watching how D/FW fills gates soon to be left vacant by Delta Air Lines Inc.=20 "It is definitely a situation that we are monitoring," Gary Kelly, who was named Southwest's CEO in July, said in an interview.=20 "It remains true that we don't want to serve this region from D/FW for a variety of reasons. We want to continue to serve the Dallas-Fort Worth region from Love Field, and nothing has changed there in terms of our desires."=20 However, Mr. Kelly said, the airline could take a fresh look at D/FW Airport because of the opportunity presented by Delta's decision to pull its hub.=20 The move will put thousands of passengers up for grabs starting in February.=20 Now D/FW's No. 2 carrier, Delta will probably keep only about 4 of its 19 exclusive-rights jet gates in Terminal E, freeing up the rest, airport officials said.=20 "The airline landscape is changing, and it's something we're going to continue to monitor," Mr. Kelly said. "We're watching closely to see what service is added and by whom."=20 With big airlines teetering on bankruptcy or even - in the case of twice-bankrupt US Airways Inc. - near shutdown and liquidation, Southwest is poised to pounce on new markets throughout the country.=20 At D/FW, Southwest wouldn't be encumbered by the Wright and Shelby amendments that limit how far its planes can fly from Love Field. Analysts say Southwest could easily fill dozens of flights to top cities on either coast if it added D/FW service.=20 Considering that Southwest's fight to fly from Love Field went all the way to the U.S. Supreme Court, any move to launch service from D/FW would reshape the North Texas travel landscape.=20 Some observers predict Southwest's colors could soon fly at the airport, which is one of the world's busiest.=20 "I wouldn't be that surprised if Southwest did," said Robert Mann, an airline consultant. "The markets out of D/FW are the kind that interest Southwest. It's not as if there's not any revenue there for them - there's plenty."=20 Ray Neidl, an analyst for Caylon Securities USA Inc., agreed it could happen. At D/FW, "there's a real void that's opened there that they could step into."=20 Southwest has always had the option to fly from D/FW. But the airport has disadvantages.=20 Planes take a long time to taxi from gates to runways, which could crimp Southwest's ability to turn flights around quickly, a key to its profitable operating model.=20 D/FW officials say their arms are open to the world's most successful discount airline.=20 "We would very much like to have Southwest Airlines out at D/FW Airport, not in place of Love Field, but as a complement," said chief operating officer Kevin Cox.=20 Delta's plan to cut more than 90 percent of its daily flights at D/FW creates a marketing opportunity that the airport hasn't had for more than two decades, when Braniff International went bankrupt.=20 The airport's marketing head, Joe Lopano, keeps a Beanie Baby-style plane bearing a Southwest logo on his credenza as a reminder to someday lure the carrier to his airport.=20 Other carriers=20 AirTran Airways Inc., which now serves five cities from D/FW, could expand into the open gates. The discounter, based in Orlando, Fla., has 100 planes on order. AirTran officials, who have said they're pleased with their D/FW results, didn't return calls for comment.=20 Denver-based Frontier Airlines Inc. is also likely to look closely at more service. Spokesman Joe Hodas said the carrier is "aggressively evaluating the landscape" for more opportunities but doesn't plan to add more flights to its Denver-to-D/FW service at the moment.=20 Fort Worth-based American Airlines Inc., which operates its largest and most profitable hub at D/FW, said it's ready for anything.=20 "Customers have seen us lower our costs in recent years so that we can compete aggressively with any carrier in any market," said American spokesman Tim Wagner. "Honestly, we already compete with ... [low-cost carriers] in the North Texas market and almost every other market in which we operate."=20 Also on the radar=20 Southwest has shown it can be nimble, as it was in 1991 when Midway Airlines went out of business at Chicago's Midway Airport. Southwest snapped up eight gates and quickly expanded its role there; it's now that airport's top carrier and a considerable thorn in the sides of other carriers at larger O'Hare International.=20 With the prospect of a fierce battle if it entered D/FW, Southwest may first look to less-competitive markets, consultants said.=20 If US Airways fails, opening up as many as 118 gates at Philadelphia's airport virtually overnight, it would present Southwest with a golden opportunity to get a stranglehold on the nation's No. 4 air market, measured in potential passengers.=20 "We're interested in more gates at Philadelphia, and there's no secret to that," Mr. Kelly said. As the most successful launch city in Southwest's history, Philadelphia remains a big part of the carrier's plans no matter what happens to US Airways, he said.=20 Officials from Philadelphia wouldn't speculate on what would happen if US Airways were to downsize or liquidate, but they have "ongoing conversations with airlines that operate there and those who might want to expand there," said spokesman Mark Pesce.=20 The Philadelphia airport took back two of the carrier's gates this week and could lease them to Southwest, which has reached capacity at its four gates since starting service in May.=20 The airport also has four gates under construction, scheduled for completion by the end of 2005.=20 Southwest's ability to jump into new markets has typical constraints, one of the biggest being aircraft. The airline adds 29 planes next year and would likely go to the used 737 market if it needed more planes, especially in the first half of 2005, Mr. Kelly said.=20 "In this environment, we would get some very good deals," he said. "We are fortunate in that we've got a good amount of cash on hand and a very strong balance sheet."=20 Of all the low-cost, low-fare carriers, most observers like Southwest's position.=20 "Southwest is the best-positioned carrier to take advantage of any weakness out there in the marketplace," said Ron Kuhlmann of Unisys R2A Transportation Management Consultants. Southwest's easiest path to profits lies in the Northeast, he said.=20 "If you're Southwest, you're going to go to where the biggest opportunities are, and where there's going to be less competitive response," he said.=20 Mr. Kelly said his new management team continues to develop scenarios and gird the carrier for anything.=20 "Nobody knows what the future holds," he said. "We're excited in that we're well-prepared."=20 =20