ABC13 Exclusive: United CEO speaks out about proposed Hobby Aiport expansion

May 23, 2012 4:34:58 PM PDT
From city council debates to town hall meetings, weeks of contention over whether two international airports can co-exist in Houston could soon be decided.

The CEO of United Airlines speaks out in an ABC13 exclusive interview about the plan and what he says politicians could be gambling away.

The mayor will likely put the Southwest Airlines plan up for a vote next week which could end this drawn-out fight. Before then, the head of the airline that's been the loudest critic of the project sat down to answer our questions about why he's fighting so hard.

We asked both CEOs to speak with you face-to-face about an issue they say will affect thousands of us whether you fly or not. We start with United Airlines. Jeff Smisek knows his way around the airport. We couldn't walk more than a few feet without a United employee stopping to talk. He told us that's who he is fighting for.

In a battle over flights to Mexico and Latin America, we started by asking Smisek if he is scared of competing with Southwest.

"It's a complex issue. One side wants to make it simple -- competition is good. Of course, competition is good. There's no fear of competing with Southwest. We do it every day and we do it quite well," Smisek said.

He is a fierce competitor. He took another airline's name, but kept the corner office and now he's vowing to keep United's advantage here in Houston. Allowing Southwest to fly internationally from Hobby Airport will hurt Houston and Houstonians he says.

United, the nation's largest international airline, simply cannot afford to lose even a few passengers per flight.

    Jeff Smisek: Houston itself will suffer because this is a powerhouse. This hub is a powerhouse for the city of Houston -- for growth, for the economy, for trade, for jobs, for transportation of people and cargo and just exchange of ideas. And having Houston begin to compete against itself as opposed to Houston competing against Atlanta or Miami, we'll have to pull down the hub here about 10 percent. We've done very careful modeling and it will require us to lose about 1,300 direct jobs, direct United jobs. Good people with good paying jobs in the city of Houston and that's pretty sad. What I am fighting for here are the jobs of my co-workers because there are people who are going to get hurt here and it's really unfortunate and it will be at the feet of the politicians if that happens.

    Ted Oberg: Do you feel like Bud Adams threatening to move the Oilers to Tennessee when you say that?

    Jeff Smisek: I am not threatening anything. This is what will be forced to happen. This isn't a threat. I mean this is nothing I want to do. Why would I ever want to do that? This is a natural reaction to a decrease in demand and a decrease in the profitability of the flights here.

Smisek still considers himself a Houstonian. His wife and dog still live here. He is no stranger at Bush Intercontinental Airport. And he does realize there was some bad taste when he took the merged airline's headquarters to Chicago, but told us that should have no bearing on what city council decides.

    Jeff Smisek: I expect our elected officials to act on facts and data and then make public policy decisions that are good public policy decisions thinking through the long-term implications and not act on emotions. I would be very disappointed if that were the case.

    Ted Oberg: Do you think that Houston owes you this?

    Jeff Smisek: No, I don't view people owing anybody anything. People were concerned when we were going to merge that bad things were going to happen to Houston. Only good things have happened to Houston since we merged. We've grown this hub. We have 17,000 people here. This is just unfortunate that the city is even entertaining this. But we will do what we need to do to do our best to preserve the jobs and if we can't preserve the jobs, it will be the politicians' fault.

Here is United's argument. It's not Houston passengers that are causing the issue, it's the connecting ones. The way it is now if you want to go from Oklahoma City to Cancun, you have to fly through IAH.

United says on a 50 passenger plane, just two passengers are the difference between making a profit and losing money on that flight.

Of the 50 people on that flight, two of those people may go on to Cancun, the others go to some other United flight to another destination. But if the two Cancun passengers switch to Southwest and fly to Mexico through Hobby, all of a sudden United loses money on the Oklahoma City flight and stops flying it.

That's where the jobs loss comes from and that's what Smisek wants city council to think of between now and next week.

On Wednesday, after his press conference with the mayor, it's Southwest CEO Gary Kelly's turn to speak with Eyewitness News.

Stay with Eyewitness News and abc13.com for the latest on this story.

Load Comments