Southwest Airlines is one step closer to moving into its newly expanded home at Denver International Airport.
The City Council on Monday approved an amended lease agreement with the airline, allowing Southwest’s use of five new gates and support space in DIA’s Concourse C.
The new space replaces two Southwest gates and space in Concourse A, increasing Southwest’s DIA footprint by about 13,500 square feet.
The airport began construction on the gates in September 2013 to accommodate the airline’s growing presence in Denver. The $46 million, 39,000-square-foot extension is paid for by DIA’s Airport Capital Improvement Project funds, generated by airport revenue.
The increased space is projected to add $2.5 million to Southwest’s annual rent bill, airport spokesman Heath Montgomery said.
Southwest is DIA’s second-largest carrier, accounting for about 27 percent of flight traffic. United contributes about 40 percent of traffic and Frontier 18 percent.
Denver is Southwest’s fifth-busiest city for daily departures. The airline recently added nonstop flights from Denver to Dallas and Cancun and Cabo San Lucas, Mexico, bringing the total of daily nonstop flights from DIA to 167. That number will increase to about 176 by April to accommodate spring break traffic, company spokeswoman Michelle Agnew said.
“Denver has been a focus market for us for quite some time. We just see a ton of opportunity here,” she said.
As Frontier is making route changes, including ending its popular service between DIA and New York City’s LaGuardia Airport, there may be an opportunity for Southwest to step in, Agnew said.
“Seeing as they aren’t serving that route anymore, our demand can go up, so that’s always a possibility,” Agnew said. “We already serve major main markets from Denver, so we’re figuring out where we should increase flights.”
Frontier’s DIA-LaGuardia service recently was changed to “seasonal” status, ending the route as of Dec. 19 and repurposing it for new Miami-LaGuardia service, which starts Dec. 20. Frontier spokesman Todd Lehmacher said the DIA-LaGuardia service will resume May 1.
Southwest could add additional DIA-LaGuardia routes only if the Federal Aviation Administration authorizes the additional capacity. Like Reagan National, in Washington, D.C., slots at LaGuardia are regulated by the FAA to manage congestion.
In late October, Southwest posted record third-quarter earnings of $382 million, an increase of $141 million over the same period in 2013. This, along with positive fiscal projections, earned the airline a top rating from Bloomberg on Nov. 10.
Agnew said Southwest learned a lot during its lean years and has been adding new destinations, aircraft and flight perks such as free onboard Dish TV and Beats music to retain customers and to push growth.
“You have to plan for the hard days, and we planned for those hard days,” Agnew said. “We learned how to be as efficient as possible, and it’s paying off.”
Southwest, which employs about 2,200 people at DIA, remains committed to the Rocky Mountain region, Agnew said.
“Every airline wants to be the hometown carrier, but we can really try to be that in Denver,” she said.
“We feel it’s so important to be a part of the community.”
Laura Keeney: 303-954-1337, lkeeney@denverpost.com or twitter.com/LauraKeeney
