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News Article - January 18, 2007

Southwest Airlines to Post New Routes  
  Southwest Airlines plans to announce as soon as this spring new routes from Philadelphia International Airport, using five additional departure gates in Terminal E that it expects to have by Oct. 15, chief executive officer Gary C. Kelly said yesterday. But Southwest service here also will shrink a bit after March 10, when it stops flying between Philadelphia and Hartford, Conn., according to information on the airline's Web site. The airline, which has 65 flights daily out of Philadelphia, has made no announcement about abandoning the route.

   Southwest will use jets that had been on the Hartford route to add flights between Philadelphia and other existing routes, to Manchester, N.H.; Raleigh-Durham, N.C.; and Tampa and West Palm Beach, Fla., spokeswoman Linda Rutherford said. Southwest has three round-trip flights a day on the Philadelphia-Hartford route, using 130-seat Boeing 737 jets. US Airways Express, the only other carrier with nonstop flights, has eight daily round-trips, most of them using 50-seat regional jets.

   Kelly, speaking to analysts and reporters in a conference call, said Southwest's growth at Philadelphia International "has been throttled to a degree" because it has not been able to lease more than eight gates, four in Terminal D and four in Terminal E. Despite the constraints, Southwest has grown since it started service here in May 2004 to be the No. 2 airline at the airport, with almost 10 percent of the passengers. Southwest has not decided yet what additional cities it will fly to from Philadelphia. Among the candidates are Washington (Dulles Airport); Cleveland; Denver; Kansas City, Mo.; St. Louis; Louisville, Ky.; Birmingham, Ala.; Albany, N.Y.; Buffalo; and Norfolk, Va.

   "We have so many opportunities," Kelly said. "We need to be sure we can execute on a specific date. But assuming we have gates and are ready to go in the fall, you could see an announcement... perhaps this spring." The additional gates Southwest needs were promised late last month, when the airport settled a yearlong dispute between US Airways Group Inc. and city officials. The agreement provides for Delta Air Lines Inc. to move its operations from four gates it now leases in Terminal E to space in Terminal A-East.

   US Airways, the airport's largest carrier, with almost two-thirds of the traffic, had objected to moving Delta, saying that providing gates in A-East for domestic flights could prevent it from increasing its seasonal service between Philadelphia and Europe. The dispute was complicated by US Airways' hostile $10.3 billion takeover bid for Delta, which is opposed by Delta management. But the airport found a way to accommodate US Airways' needs, enabling it to announce Jan. 4 that it would offer nonstop flights this summer to three new cities: Athens, Greece; Brussels, Belgium; and Zurich, Switzerland.

   Because it uses smaller jets than Delta, Southwest will be able to create five gates in Terminal E from what are now four Delta gates, Kelly said. Southwest Airlines Co. and American Airlines, in a reflection of an improving financial performance for the industry, reported 2006 fourth-quarter and full-year profits yesterday. Southwest made money for the 34th year in a row, while American had its first annual net income since 2000.

   In the fourth quarter, Southwest earned $57 million, or 7 cents a share, 19 percent less than a year ago, on $2.3 billion in revenue. For all of 2006, it made $499 million, or 61 cents a share, on revenue of $9.1 billion. American's parent, AMR Corp., reported quarterly net income of $17 million, or 7 cents a share, compared with a year-earlier loss of $600 million, or $3.46 a share. Revenue grew to $5.4 billion from $5.17 billion. For the full year, AMR reported earnings of $231 million, or 98 cents a share, compared with a year-earlier loss of $857 million, or $5.18 a share.

Source - Philadelphia Inquirer

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