Southwest and United airlines presented their case to Houston City Council earlier this week. Southwest say expanding Hobby and adding international travel will bring 10,000 new jobs and $1.6 billion a year to the local economy.
Professor Praveen Kumar is with the University of Houston’s Bauer College of Business. He agrees this potential growth is a good thing.
“Typically, what will happen is that as the prices go down because of competition, you know, the size of the market increases. Simply as the number of flier’s increases, obviously they would have to be accommodated and that accommodation would require hiring new people, and that’s where they’re coming from in terms of the new jobs.”
United believes this added competition means a loss of 3,700 jobs and nearly $300 million dollars a year to Houston. Mainly because they would decide not to expand Terminal B at George Bush Intercontinental Airport.
Kumar says that’s where it gets complicated.
“There is a possibility that United is bluffing. The job loss and the revenue loss which is the idea would be that if they basically scrap the plan to upgrade Terminal B that means all those construction and other ancillary jobs that would be created by that huge building project won’t come to Houston.”
So Kumar says essentially both airlines have a point and there is truth in both of their statements. But what’s the solution?
“You know, I’m hoping that somebody in Houston City Council has the ability to do an independent economic analysis on both sides. Because really it comes down to, yeah, both sides have a point, but in terms of figuring out what is the bottom line.”
And that bottom line is really what’s best for the city of Houston and the airline’s customers. That’s where Tom Parsons with Best Fares, an airline comparison website, comes in.
“Southwest right now the thing that they’ve got in their advantage is the fact I think they have a much more friendlier customer service when it comes to refunds, changes and also baggage fees.”
However Parsons says United has its own advantages especially when it comes to its loyal base of business customers.
“So they’re a mean, lean flying machine they play the game they go after the business travelers, they treat them right. They do have the upgrade systems to take care of their Elite frequent fliers. United is a very strong competitor. Probably one of the best and their still the biggest in the world.”
Whether there’s a place for two international terminals in Houston remains to be decided by City Council perhaps later this month. But both Parsons and Kumar agree competition is never a bad thing especially for the consumer.