www.baltimoresun.com/business/bs-bz-bwi-southwest-international-20140627,0,4050792.story

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BWI officials eye the future as Southwest launches first international flights

Airline's shift abroad is driving renovations, upgrades at Anne Arundel airport

By Kevin Rector, The Baltimore Sun

9:26 AM EDT, June 28, 2014

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With beach balls, snorkels and other vacation-themed decorations festooning a section of BWI Thurgood Marshall Airport, six top Southwest Airlines executives will split off in pairs to a steel drum beat and board three flights to the Caribbean.

The elaborate sendoff, planned for Tuesday morning, will mark the official entry of the largest domestic carrier in the United States into the international market. BWI officials also hope it signals the start of the growing Anne Arundel County airport's ascendance as a major hub for domestic travelers looking to hop abroad.

"We know we have a great opportunity out of BWI, and they have obviously been wanting us to do as much as we can out of there," said Teresa Laraba, Southwest's senior vice president for customers, who is scheduled to depart from BWI for Aruba aboard the airline's first international flight. "This is just the start. I can't tell you where we'll be down the line, but if we're as successful as we expect to be, and the demand is such, then you'll see us grow."

Many see Southwest's international expansion as inevitable, even if localized to nearby islands.

"It's their future. They have to go international. The domestic market is relatively saturated," Paul Wiedefeld, the airport's CEO, said of Southwest, its largest carrier. "And we have the capacity."

For months, contractors and vendors have been busy at BWI filling out the sweeping $100 million terminal expansion that opened last year between Southwest's A and B concourses and the adjacent Concourse C — opening more domestic gates to Southwest and expanding the airport's capacity for more travelers.

More recently, airport officials have been working to finalize design plans for another $125 million expansion between the D and E concourses that will further expand the airport's domestic and international reach.

The new project, set to begin construction early next year, will modernize Concourse D and its security checkpoint, and create a secure connection to the international gates on Concourse E. It will also create two new gates that will be able to "swing" between serving domestic fliers and international travelers based on demand, Wiedefeld said.

Southwest's domestic service has defined growth at the "easy come, easy go" airport for years, but it stalled last year as Southwest concentrated on bringing AirTran, which it acquired in 2011, into the fold. The federal sequester also undercut government-booked flights out of Baltimore, and BWI saw its overall passenger count decline in 2013, after three years in a row of record-setting traffic.

The 2013 passenger volume of 22.5 million fares was still the airport's second-largest ever, after 2012, but represented a marked slowdown in domestic growth. And while international still represents a small portion of BWI traffic — 843,474 passengers in 2013 — it helped offset the domestic slowdown.

While traffic declined by 0.8 percent overall in 2013, international travel grew by about 20 percent, Wiedefeld said — in part on the strength of Condor Airlines' service to Frankfurt, Germany, which was introduced in 2012, and a bump in passengers on British Airways' daily routes to London.

So far in 2014, overall passenger travel is down about 1 percent compared to this time last year, Wiedefeld said, but international travel is up about 15 percent year-over-year. Since 2009, international travel has nearly doubled.

Michael Boyd, president of aviation consulting firm Boyd Group International, said Southwest's move abroad is "mostly Caribbean stuff, and that's always good," but it doesn't represent a "sea change" in the industry.

"Technically that's international, but really it's like going across the pond," he said.

For now, it's also mostly a "change of paint" from AirTran to Southwest branding, he said, and Southwest will be limited to a point by its fleet size.

A potentially larger international market for BWI in coming years will be serving carriers from Asia, Boyd said.

"If Boston can support service to Beijing, you don't think Baltimore can? Get real," he said. "It's something that's going to happen in the next five years. You'll see a lot more international coming online."

With increased demand, the dominance of Washington-Dulles International Airport in the region's international air market could slip in other areas, too, Boyd said. "Any European hub is fair game," he said.

Wiedefeld said BWI substantially increased its capacity for travelers with the opening of the connector between Concourses B and C and its associated renovations, as larger entrances and exits and larger waiting areas removed regulatory and fire restrictions on the number of people that Concourse C can hold.

As next-generation systems for managing airport traffic and scheduling allow for quicker airplane turnarounds, capacity will continue to grow. In coming years, with its existing and planned infrastructure, Wiedefeld said, BWI will be able handle up to 30 million fares a year without customers noticing a squeeze.

BWI becoming a "focal city" for Southwest's likely shift abroad will help ensure that growth, he said. He said any other international growth for BWI would depend on market demand, but nothing is determined.

Laraba said Southwest is assessing the viability of adding many destinations to its portfolio, but would not name any.

At first, such destinations would likely be international airports that are close to the United States, given the current abilities of Southwest's fleet. In addition to Baltimore, international Southwest flights will begin Tuesday in Atlanta and Orlando, though Baltimore has the most.

The three flights Southwest takes over in Baltimore — to Aruba, Nassau in the Bahamas and Montego Bay in Jamaica — are all flights that AirTran already operated out of the airport. But once Southwest has a firm footing on those routes, Baltimore will continue to be a jumping-off point for new locales, Laraba said.

"It just opens a huge door," she said. "We really have no idea where it can take us, but we're excited about what we can see in the near future."

Some customers of Southwest are excited, too, though others not so much.

Chris and Cecilia Russo, 73 and 67, respectively, of Rumsey Island in Harford County, said they have mixed feelings about Southwest's venture into international waters.

The couple, awaiting a flight at BWI on a recent afternoon, said they took an AirTran flight to Aruba from BWI last year, so that's nothing new. They also used to take AirTran to Sarasota, Fla. — they have a condo down in Fort Myers — and it was convenient until Southwest discontinued the flight.

"That really put a number on us," Chris Russo said.

Convenience on airlines all depends on where you want to go, the couple said, so they'll wait to see what flights Southwest decides to add, instead of end.

Stacie Siekierski, 64, of Frederick is a Southwest fan, if an infrequent international flier, she said. Still, new international flights out of BWI would be a draw.

Every time Siekierski flies she has a choice to make, she said, because she lives about "equidistant" from BWI, Dulles and Ronald Reagon Washington National Airport.

Still, if a flight is available, BWI is her "first pick every time," she said.

Siekierski's friend, Mike Isaacs, also 64 and from Frederick, said he will be most interested to see whether Southwest eventually extends its reach beyond the Caribbean.

"If Southwest starts competing with the bigger places and carriers," he said, "that would be great."

krector@baltsun.com

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