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The Honolulu Advertiser

Posted on: Friday, January 14, 2005

Southwest Airlines uses ATA to reach Hawai'i

Advertiser Staff and News Services

Southwest Airlines Co. will sell seats on ATA Airlines flights to Hawai'i and other U.S. locations beginning Feb. 4, the Dallas-based carrier confirmed yesterday.

ATA and Southwest's code-sharing deal won't allow frequent fliers to transfer rewards between airlines: Southwest's loyalty credits can't be used on ATA flights to Honolulu.

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All connections between the two airlines would be made at Chicago's Midway Airport, which could make Hawai'i travel inconvenient for Southwest's West Coast customers.

Southwest chief executive Gary Kelly said his airline would consider adding connecting cities in the West; he mentioned Las Vegas as a possibility.

The airlines will start selling seats on each other's flights under the so-called code-sharing agreement on Sunday.

At least some in Hawai'i's tourism industry saw the development as good news.

Hawai'i Hotel and Lodging Association president Murray Towill said the code-sharing agreement could eventually mean more ATA flights to Hawai'i.

"It may increase or expand the reach of people getting into the ATA system," he said. "If that drives up demand, that could lead to increased lift. So I think from that standpoint it's probably positive."

Hawai'i Tourism Authority executive director Rex Johnson said the arrangement could "add some pieces of the market that we have been trying to get to, (such as) connections between the East Coast into the Midwest hubs and then back to Hawai'i."

"I don't believe we have any service out of Midway, so that's just one more goodie," he said.

In addition to Honolulu, other ATA destinations that will be linked with some Southwest flights through Chicago are New York's LaGuardia Airport; Newark, N.J.; Boston; Reagan National Airport outside Washington, D.C.; Fort Myers, Sarasota and St. Petersburg, Fla.; Minneapolis; Denver and San Francisco.

Kelly said Dallas-Fort Worth International Airport was deliberately left off the list because Southwest wants to operate locally only at Dallas Love Field.

Importantly, the deal does not allow use of frequent-flier rewards on the other airline. For example, members of Southwest's Rapid Rewards loyalty program won't be able to use their credits on ATA flights to Honolulu.

Kelly said Southwest had already fielded inquiries about customers eager to cash in their credits for Hawai'i travel. However, the airlines feared that Hawai'i-bound planes would be filled with nonpaying customers.

The code-share deal was part of Southwest's acquisition of six gates at Midway Airport from ATA, which is under bankruptcy protection.

Kelly said the deal could mean $30 million to $50 million in new revenue for each airline. The deal covers 243 Southwest flights a day in Chicago — less than 10 percent of its total schedule. The airlines will split the revenue when travelers fly on both carriers, with each keeping the fare from its leg of the trip.

Both airlines have escape clauses from the code-sharing deal if the on-time performance of the other is unsatisfactory, Kelly said.

ATA is a unit of Indianapolis-based ATA Holdings Corp.

Southwest shares fell 29 cents, to $14.98, in trading yesterday on the New York Stock Exchange.