Houston Mayor Annise Parker threw her support to a $100 million expansion of the city's Hobby Airport that will enable Southwest Airlines to accommodate international flights.
Parker and Southwest officials announced the deal Wednesday at Hobby, the smaller of Houston's two major airports.
Southwest Airlines said it will cover all costs related to the expansion, and it will design and build the five new gates and a customs facility to the city's specifications.
"It will be financed with no city debt and no passenger facility charges will be used to reimburse (Southwest)," Parker said. "Southwest Airlines has agreed to pay for all of the expenses associated with building this expansion. That's it."
Other airlines will be able to use one of the new gates and the customs facility, Parker said. Southwest will have preferential use at four of the new gates.
"They will be helping grow the greater Hobby region of Houston," she said. "(The expansion) will mean about 20 more departures daily."
Houston's City Council still must approve the agreement. Council is scheduled to formally vote on the proposal on May 30.
"There's opportunity for more flights to the Caribbean and business opportunity to benefit the city," City Council Member Melissa Noriega said.
United Airlines, which has a hub at Bush Intercontinental Airport, has been opposing the Southwest plan, saying it will lead to layoffs at the larger airport.
"We bear the risk of expanding Hobby Airport," Southwest Airlines CEO Gary Kelly said. "It will benefit both airports. Competition is good. Houston has suffered from monopoly airfares to Mexico, Central America, Caribbean and South America long enough. We will bring lower fares. We will bring more competition. It will be more jobs."
"We haven’t seen the proposal, but there is no funding plan that makes this proposal good for Houston," said Mary Clark, a United spokeswoman. "Splitting the city's international air service will harm the city's competitive advantage and cost jobs. We will continue to advocate that maintaining a single international airport is the best policy for Houston's future."
Former Texas Gov. Bill Hobby, for whom the airport was named, said United's claim doesn't make much sense.
"They weren't concerned when they moved the headquarters to Chicago," he said.
Southwest has said it could begin flying from Houston to Mexico and Latin America in 2015.