How Southwest Airlines Looks to Grow in Los Angeles

For years, Los Angeles has considered building a new terminal, just east of Southwest Airlines’ Terminal 1, in what is today an airport-owned parking lot.

Now it seems it might happen. In an interview last week, Southwest CEO Gary Kelly told me airport operator Los Angeles World Airports, or LAWA, is “very serious about it,” and said the terminal, if built and awarded to Southwest, could change the scope of the airline’s operation. But with competitors also begging for more gates, it’s no guarantee Southwest would get the facility, which might be called Terminal 0 or Terminal 1E and could have up to 10 gates.

“We haven’t been able to grow in L.A. in forever,” Kelly said. “To their credit, LAWA wants to keep the balance of competition healthy. If we are unable to grow and competitors are growing in other terminals, that’s not good. So yes, I think that certainly we have a good argument for why we would be able to utilize those additional gates.”

Kelly and I were speaking in Southwest’s newly renovated Terminal 1, a more than $500 million renovation to a building that was until recently a dark, dilapidated facility shared by Southwest and US Airways. It’s beautiful and does not look like a terminal belonging to a low-cost-carrier. Southwest did not pay for it directly — the airport operator covers most improvements — but as Kelly told me, “the airlines pay these bills one way or the other.”

More improvements will come soon. Southwest is next focused on Terminal 1.5, a building to connect Terminals 1 and 2 that will provide more space for ticketing. It should open in 2020. As for when the completely new terminal might open, Kelly said, “obviously, we would like it to be shortly after 2020 but I just don’t have a timeline yet.”

Be sure to read my story for more information from Kelly, including why the airline still hedges fuel, and why its plans to fly to Hawaii might be taking longer than some had hoped.

— Brian Sumers, Senior Aviation Business Editor [[email protected], @briansumers]

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Next Week

I’m back on the road next week (finally!) to visit the headquarters of one of North America’s most intriguing and evolving low-cost carriers.

No, it’s not Southwest, or JetBlue or Alaska. By now, that trio is mostly set in its ways. Instead, I’ll be visiting Sun Country Airlines, a 35-year-old company that recently changed its model. Rather than continuing to be a full-service airline hubbed at Minneapolis/St. Paul that provides quixotic competition to Delta, Sun Country has gone full low-cost, while deemphasizing Minneapolis and growing elsewhere.

For now, Sun Country is small. But late last year, the airline was sold to Apollo Group, a private equity firm, and recently it closed on $28 million in financing. I’m guessing more change is coming, and I’m looking forward to learning more during my visit.

Is there something you want to know about Sun Country? Send me a message, and I’ll see if I can learn the answer.

Contact Me

Skift Senior Aviation Business Editor Brian Sumers [[email protected]] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send him an email or tweet him.