Southwest Airlines announced Thursday it will expand service to the Colorado Springs Airport, ending decades of courting by city officials to bring the nation's largest carrier to southern Colorado.
The Dallas-based airline said it would start flying to Colorado Springs in the first half of next year, but didn't say how many flights it would offer to what destinations, nor the exact start date or fares, which it said would be "announced soon." Southwest has served Denver International Airport since 2006 and has grown into DIA's second-largest airline after United, offering 263 daily flights to 70 cities and employing more than 4,300 people. The carrier, the nation's largest by passengers carried, also plans to begin seasonal weekend service to Montrose and Hayden in December.
“As we bring Colorado Springs into the Southwest network, it will give travelers across the country more access to experience the region’s top destinations, education and training facilities, and provide new air service for travelers who have long-desired easy access to our expansive network,” Jason Van Eaton, Southwest’s senior vice president of real estate and government affairs and executive ambassador to Colorado, said in a news release. “We look forward to bringing our value, customer-friendly policies and our world famous hospitality to the Pikes Peak Region as we expand our footprint across the state.”
Colorado Springs officials have tried many times over the years to lure Southwest here, even offering millions of dollars in financial help in 2004 to pay for airport upgrades to accommodate the low-fare giant. Former Mayor Lionel Rivera made attracting Southwest or another low-fare carrier a big part of his 2003 mayoral campaign, leading to the 2004 effort. However, Southwest never arrived, until now.
The announcement came as Southwest announced it lost $1.2 billion in the third quarter as travel has only rebounded slightly since the COVID-19 pandemic. The airline said it is still filling just above half of the seats on its flights during September and that travel demand remains "fragile." Southwest also announced it would add Jackson, Miss., and Savannah, Ga., to its schedule in the first half of the year.
Southwest CEO Gary Kelly said in the earnings release that Southwest is "leveraging additional airports in cornerstone cities where our customer base is large, along with adding easier access to popular leisure-oriented destinations from across our domestic-focused network." He called all three cities and other recent additions "low-risk opportunities we can provide customers now, all the while better positioning Southwest as travel demand rebounds."
Colorado Springs Mayor John Suthers welcomed Southwest's long-awaited arrival.
"Southwest (coming to Colorado Springs) is something we've been hoping for a long time," Suthers said. "This is a big step for Colorado Springs, an indicator that this is a city that is attracting the attention of a big and successful airline. There will be competition that will result in more favorable fares and people will have to elect to take advantage of the convenience, even if it means making a stop to go to New York or Boston."
While Colorado Springs officials have been courting Southwest for a long time, the final phase happened quickly. Southwest executives sought a two-day visit to Colorado Springs, which happened Sept. 30-Oct. 1 to review the city's airport and related facilities and the overall community, Suthers said. One airline executive, who had visited the city 13 years ago, told Suthers that Colorado Springs is now "a different city" than it was during his first visit.
Southwest had told the city in recent years, including meetings just after Suthers was elected in 2015, that the city was low on its list of possible destinations because contracts with its unionized workers limited the amount of part-time workers the airline could use, Suthers said. Those contracts have since been changed, which he said was a key factor in making Colorado Springs more attractive since most of its local workforce would be part time.
Southwest's arrival comes at low point for the Colorado Springs Airport and the entire aviation industry with air travel declining sharply during the pandemic before slowly recovering. Passenger numbers at the local airport fell in April to a low of 3,656, down nearly 94% from a year earlier, before recovering in August to 32,692, still down 58% from August 2019. Passenger numbers are expected to finish the year at 361,000 — which would be the lowest annual total since 1982. Airlines have responded by suspending service to several destinations, including Atlanta and Los Angeles, and reducing flights to the remaining cities.
But the COVID-19 pandemic also played a big role in bringing Southwest to Colorado Springs, said Mike Boyd, an Evergreen-based aviation industry consultant who has worked for the local airport in the past. The pandemic has cut air travel sharply, leaving the airline with many idled aircraft and a surplus of workers that it is still paying. As a result, Southwest is looking for new destinations as a source of revenue.
Southwest "can go to Colorado Springs and fill up airplanes without losing a single passenger in Denver. Before COVID, they were operating (there) at 90% capacity; now they are not. These flights will fill very quickly," Boyd said. "They are doing things they said they wouldn't do six months ago. Before COVID, they had a shortage of airplanes. There has been a marked material change in the past six months. Colorado Springs was way down the list (of potential Southwest destinations), but thanks to COVID they are no longer way down on the list."
Boyd said he doubted any of the four airlines serving Colorado Springs — American, Delta, Frontier and United — would leave as a result of Southwest's arrival. He believes American, Delta and United could instead more quickly add back flights cut during the early months of the pandemic, and will reduce fares on Colorado Springs flights to remain competitive. He expects Southwest to sell at least 80% of its seats in Colorado Springs and believes some passengers will still drive to Denver for international flights and less popular nonstop destinations.
Kelly, the Southwest CEO, told employees in an Oct. 8 video message that the carrier is looking to generate additional revenue by adding cities to its route map as part of its strategy to recover from the pandemic. That strategy also includes another round of federal aid and cost-cutting by reducing the pay of non-union employees by 10% on Jan. 1 and seeking a similar cut from its union workforce. The airline lost $915 million in the second quarter.
"It's an opportunity to put idle aircraft to work, and aircraft are costly assets, so if we can use them incrementally to build business in new markets with little or no new cost, we must pursue every opportunity," Kelly said in the video message. "With travel down, it is not just an opportunity but a mandate to seek new places where we can bring in more business by adding relevant service and generating new customers."
The video was made the same day Southwest announced plans for seasonal service to Montrose and Kelly said that and flights to three other destinations beginning in November and December "are just the beginning."
"We are looking at more places to put people and planes to work as quickly as we can," he said. Kelly added that Southwest has "dozens" of new opportunities for growth with its fleet of Boeing 737 aircraft and will pursue those opportunities "aggressively but not recklessly."
"In every case, these opportunities must meet our cash flow thresholds," he said.
Rivera, the former mayor, said he thought the city had landed Southwest 15 years ago, but the airline ended up in Denver instead because the carrier changed its strategy of operating from airports on the outskirts of major metro areas to serving major airports like DIA. Five years later, that relationship was cemented when Southwest acquired the bankrupt AirTran Airways, which gave it additional gates at DIA.
"This is awesome and great news. It has taken a while, but being mayor is often like a marathon. You start things like Southwest, the Olympic (and Paralympic) Museum and the Southern Delivery System (water project) and hand them off to the next mayor, or the one after that, for completion. I am happy to congratulate Mayor Suthers and the administration in place now."