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Minneapolis lures Southwest with data and fish

Minneapolis airport chief Jeff Hamiel claims no special knowledge for luring Southwest Airlines to his town, but loads of data and a walleye dinner seem to have done the trick.
/ Source: The Associated Press

Minneapolis airport chief Jeff Hamiel claims no special knowledge for luring Southwest Airlines to his town, but loads of data and a walleye dinner seem to have done the trick.

Predicting where Southwest will go next has always been a mix of art and science, and it has gotten tougher now that the most sought-after airline plans to fly less next year.

Airport executive directors like Hamiel are under pressure to land Southwest because businesses and residents want its low fares in their town. Hamiel made almost yearly pilgrimages to visit Southwest for at least 17 years. He generally went to Dallas expecting to meet with two Southwest executives for an hour. He almost always got more than two, for a lot longer.

"They were nice, they were professional, they were courteous, and they said 'No service in the forseeable future,'" he said.

In recent years Southwest scouts came to the Twin Cities to check out the control tower operations, taxi times, road travel times, even snowplowing operations.

In March Southwest told Hamiel they would be shrinking. He took that as a sign that Southwest wasn't coming anytime soon.

In September three people from Southwest's advance team quietly came to town to talk with Hamiel and Bill Wren, who runs the airport commission's efforts to lure new airlines to Minneapolis.

Hamiel said they spent money on feeding data to Southwest on the Twin Cities and the airport, but not on the kinds of colorful promotions Southwest seems to attract from other airports. Hamiel figures they spent maybe $400 on food during Southwest's last two visits, including walleye dinners.

"I don't think that's what swung the deal," he joked.

"They're being wined and dined and recruited by every city in the country, who all want that Southwest tail on the ramp," he said. "We only approached them when we had some new information," Hamiel added. "If you're a high-pressure salesman, that doesn't work with Southwest."

Southwest would rather see an airport with nearby parking than overdone lobbies, said Ron Ricks, executive vice president for corporate services at Southwest.

"Having a parking garage clad in Italian marble, or maybe very, very expensive works of art in the terminal — those are nice things to have, but customers don't care about it, and they raise costs," he said.

Southwest, he said, prefers "airports that understand if they're going to spend money, they need to spend money on things that people want, that customers desire, and that the airlines need."

Southwest once shied away from other airlines' big hubs, preferring to fly to secondary airports like Chicago Midway, or smaller cities. But in what could be a setback for airports in small cities, Southwest has been adding service in big hubs like Denver and Minneapolis while cutting flights overall. And on Wednesday the carrier said it will pay $7.5 million for landing slots at New York's LaGuardia Airport — its first entry at one of the big three New York-area airports.

"They've become very opportunistic," said Jon Ash, president of InterVISTAS-ga2, a consulting firm that helps airports woo new air service.

Ash said he believes most of Southwest's criteria haven't really changed. The carrier still looks for airports where it can draw from a large, wealthier-than-average surrounding population of travelers. And Southwest still likes to enter markets where it believes fares are higher than justified.

Minneapolis was the headquarters hub for Northwest Airlines until Northwest was swallowed by Delta Air Lines Inc. last month. Northwest had a reputation for fierce defense of its "fortress" hubs, routinely matching fares and offering a better schedule on the route offered by an interloper airline. Southwest stayed out of Minneapolis altogether, and flew just 4 percent of the flights out of Northwest's largest hub in Detroit. Fares here are widely perceived as being higher than other markets.

Credit Suisse analyst Daniel McKenzie said he believes Minneapolis is not a market Southwest would have looked at five years ago, but it is today.

"Senior management teams at low-cost carriers have historically avoided going into Northwest markets, because from their perspective Northwest is almost quasi-psychopathic" about responding, he said.

Delta appears set to follow Northwest's old playbook in defending Minneapolis, boosting the schedule to 10 flights a day to Chicago, versus Southwest's eight. Delta also matched Southwest's prices.

Pete Houghton, Southwest's director of properties, said American Airlines fights just as hard as Northwest in its hubs.

"We expect it. It's healthy competition. It's good for the consumer," he said.

There was a time when airport directors would send Southwest chairman Herb Kelleher his favorite bourbon to lure the discounter to their town.

"Southwest is not a growing airline. They're redeploying assets," said Michael Boyd, who works as a consultant to airports. "We warn our clients the days when you can take a bottle of Wild Turkey and send it to Herb Kelleher are over."

Boyd also said cities that seek Southwest should be careful what they wish for. Twelve years ago he helped Jackson, Miss., land Southwest, which added service to Orlando, Fla., Houston, and Chicago, he said.

But in less than three months TWA pulled out. Boyd said United tried to match Southwest's fares but couldn't.

"Jackson had access to two global airlines, which they lost," he said.

Travelers who mostly fly domestically might never notice the difference, Boyd said. But anyone who wants to fly internationally will.

He said Southwest can no longer stick to the smaller communities like Jackson. He believes we'll see Southwest initiate more airline fights like the ones in Minneapolis and Denver, a United Airlines hub where Southwest has grown rapidly to take market share from United and discounter Frontier.

"All the low-hanging fruit is gone, they have to go into places like Denver and claw for market share," Boyd said.