Southwest Airlines and Houston cozy up in airport deal

Southwest Airlines has agreed to invest USD$100 million to expand Houston's William Hobby Airport as it looks to offer international flights to Mexico, the Caribbean, and Central and South America.

Mayor of Houston Annise Parker detailed a deal with the carrier that requires Southwest to design and build five new gates and a customs facility at Hobby in line with city specifications.

In return for its investment, Dallas-based Southwest would have preferential scheduling rights and would pay no rent for its use of international gates or the customs facility, according to a statement from the City of Houston.

Southwest earlier this year asked Houston officials for permission to study construction of an international facility at Hobby, where it has operated since 1971.

The Hobby expansion, which requires Houston City Council approval, would likely take two years, with international flights likely to begin in 2015, Southwest said.

Southwest's plans for Hobby have been opposed by United Continental, which released a report earlier this month saying international service at Hobby would drain passengers from George Bush Airport and lead to job losses. George Bush is the largest hub for United.

(Reuters)