DALLAS – From its Texas beginnings 43 years ago, Southwest Airlines has grown to be the largest domestic carrier in the United States. But until last week it had never flown to an airport outside the U.S.
On Tuesday, the Dallas-based carrier launched flights to the Bahamas, Aruba and Jamaica. It adds flights to Cancun and Los Cabos, Mexico, on Aug. 10, and Mexico City and Punta Cana, Dominican Republic, on Nov. 2.
"It's huge," Southwest executive Teresa Laraba said about the move into international markets. "Obviously we've been waiting for 43 years to get to this point. It's a pretty big deal. It's such an opportunity for us to plant our name and flag in international waters, and we've never done it. We are pretty excited around this place."
Right now, those cities are served by AirTran Airways Inc., a carrier Southwest acquired in May 2011. Southwest has been absorbing the smaller carrier over time but hadn't assumed any of AirTran's international markets.
As Southwest enters the seven international cities in the next four months, AirTran will pull out. On Dec. 28, AirTran will operate its last flight, from Atlanta to Tampa, Fla., as it finishes its integration into Southwest.
Compared with major competitors that have more than 40 percent of their capacity on international routes, Southwest will be a very small player. Southwest CEO Gary Kelly estimates that international flying represents only about 1 percent of AirTran/Southwest capacity in 2014.
While the carrier would like to expand its international system, "I think it's going to continue to be a relatively modest component of the Southwest route system for the near future, for over the next several years," Kelly told analysts and reporters in April.
Southwest has halted its growth while it works to improve its return on invested capital. That means new flights in one area will result in fewer flights elsewhere. Right now, international expansion is competing for aircraft with Dallas Love Field, Southwest's home airport.
Southwest has announced that it will add 15 cities to its schedule out of Dallas, including New York, Washington and Los Angeles. Seven routes will start up Oct. 13, with the other eight to begin Nov. 2.
Even so, Kelly recently called the international launch "our top priority for this year."
"Our focus is near-international," he told shareholders at Southwest's annual meeting on May 14. "So Canada, the Caribbean, Mexico, Central America and even as far as the northern part of South America are all wonderful international opportunities that we're excited about. We have more opportunities than we have airplanes over the next four or five years, and that's a good thing."
Company officials have said they can readily identify 50 new cities that the carrier could reach. With North America largely saturated, the bulk of those destinations are international.
"I wouldn't be surprised if it's a couple hundred aircraft worth of growth just with the capabilities that we have today," Southwest Chief Financial Officer Tammy Romo said at aninvestment conference last month.
Initially, Southwest will launch service to Aruba and Jamaica from Atlanta, Baltimore and Orlando and to Nassau, Bahamas, from Baltimore. In August, Milwaukee and Orange County, Calif., will get international service, and San Antonio, Austin and Chicago will be added to the network in November.
The plan is to add Southwest's Houston Hobby Airport base around October 2015, after workers finish construction of five international gates.
In addition, Southwest plans to start service out of Fort Lauderdale, Fla., after international gates are built there. Construction of those facilities is scheduled to begin next year.
For passengers familiar with Southwest service, the international flights will not differ much from its domestic service, although passengers and crews must deal with issues of customs and immigration.
While some of the new flights will be lengthy, Southwest already operates flights longer than the longest international flight, nearly 2,000 miles from Chicago Midway to Punta Cana. Its three flights from Baltimore to cities on the West Coast — Seattle, Portland and Los Angeles — are each more than 2,300 miles.
