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Clinton National Airport Tackles Renovation, Monitors Southwest Airlines

5 min read

(A correction has been made to this article. See end for details.)

Southwest Airlines of Dallas, responsible for almost a third of the enplanements at Clinton National Airport in Little Rock, is counting down the hours to the expiration of the Wright Amendment, the federal law that for years limited its flights.

And airport Executive Director Ron Mathieu is paying attention.

“Southwest for years, despite their restrictions due to the Wright Amendment, has carried more domestic passengers than any other airline,” Mathieu said. “So Southwest is an incredible force to be dealt with, and there are shifts in the force right now because they’re shifting how they do business.”

That uncertainty — along with the airline industry’s ever-changing nature — has focused the airport’s goals. Those are, Mathieu said in a recent interview, “to be financially successful and to be smart about how we go forward.” Being smart in this environment means keeping an eye on improving the customer experience at the airport.

The Wright Amendment, which went into effect in 1980, limited nonstop flights out of Love Field in Dallas, where Southwest is based, to destinations in Texas and, originally, four neighboring states: Arkansas, Louisiana, New Mexico and Oklahoma. It was an effort to protect the then-fledgling Dallas/Fort Worth International Airport.

Changes to the amendment later added four states: Alabama, Kansas, Mississippi and Missouri.

More: Southwest Airlines on Monday unveiled a new look for its aircraft and branding.

In 2004, Southwest, whose growth had suffered from the amendment, called for repeal. A compromise agreement in 2006 included the “sunsetting,” or expiration, of the amendment on Oct. 13, 2014, after which flights from Love Field could travel anywhere in the U.S.

In the interim, however, Southwest could fly to anywhere in the United States as long as those flights made at least one stop in the eight permitted states, meaning a flight from Dallas to Los Angeles would have to stop in a city like Little Rock or Oklahoma City.

Southwest sees the end of Wright Amendment restrictions as an opportunity for major expansion, but it also means changes to the airline’s business model, which has included Little Rock’s airport for many years.

In May, for example, Southwest announced it was cutting four of its daily flights out of Little Rock as of Nov. 1.

“You really have to admire what Southwest has done over the years, because, unlike all of the other airlines, they’ve been operating at a strategic disadvantage because of the Wright Amendment,” Mathieu said. “As a result of that, they figured out how to make airports like Little Rock part of their strategic plan to be successful. So they’ve had to stop over here as they have in other places in Texas to move on.

“Now that the Wright Amendment is sunsetting, Southwest is saying, ‘OK, in an environment where I no longer have to do that, what’s the best place to put my resources?’”

Mathieu, however, doesn’t see the reduction in flights as a major blow to Clinton National, arguing that many of those airline seats were empty anyway.

The airport chief said the impact of the expiration of the Wright Amendment and Southwest’s subsequent response will remain uncertain for at least a year or two as the airline determines what the Little Rock market can support.

As other airlines also thrash out what it takes to be profitable, Clinton National has lost a few other flights in the past year. In January, American Airlines Group announced that US Airways would end its daily nonstop flights from Little Rock to Washington’s Reagan National Airport, a result of the merger of American Airlines and US Airways. At the same time, however, American announced that it was adding nonstop service from Little Rock to New York’s LaGuardia Airport.

And last month, Frontier Airlines said it would temporarily suspend flights between Little Rock and Denver as of Oct. 26; the airport said service would be renewed in the second quarter of 2015.

In addition, enplanements at Clinton National have declined somewhat in the past five years, falling from 1.135 million in 2009 to 1.085 million in 2013. (Those numbers include non-revenue passengers such as flight crew and airline employees not included on the list of airports found here.) In the first six months of 2014, enplanements are down 6.2 percent compared with the first six months of 2013.

“You can’t predict what private businesses are going to do,” Mathieu said. “Nor can you dictate what they’re going to do. They’re going to do what’s in their best interest.”

He emphasized the airport’s strong finances, noting that net revenue was more than $13 million in 2013 and on track to exceed that this year, which would be the sixth consecutive year of record net revenue, adding, “We’re doing it without increasing costs to customers, parking or anything like that.”

And, Mathieu said, the airport, which currently has $11.1 million in bonded debt, will be debt free by the end of 2016.

In the meantime, Clinton National is proceeding with plans for a $20.6 million renovation of the concourse, part of the airport’s 2020 Vision Plan. The renovation includes a modernized interior, additional concourse restrooms and a baggage claim restroom upgrade, new gate lounge seating with recharging ports for electronic devices and improved Wi-Fi, giving the airport what Mathieu hopes will be the fastest free Wi-Fi of any airport in the U.S.

The renovation will be paid for using $19.6 million in passenger facility charges and $1 million in reserves. The $20.6 million includes $3 million in previously approved projects that are in the works or have been completed.

The Little Rock Airport Commission will weigh in on the plans later this month or in October.

Asked if the airport were taking a passive “wait-and-see approach” to the ongoing changes in the airline industry, Mathieu said no, but acknowledged that “you can’t build a foundation on shifting ground.”

“I would argue that because there’s a change going on, I have to do and we have to do a much better job of getting in touch with our customers and understanding who they are and what they need and see if we can work with our airlines to provide that — not only from a facility but from a service perspective. I think we have to do a much better job of that as we go forward.”

(Correction, Sept. 9, 2014: An earlier version of this story misstated the airport’s debt position.)

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