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April 4, 2012

HOUSTON EMPLOYEE BULLETIN

The city of Houston is considering a proposal to develop Hobby as a second international airport

in Houston. Southwest Airlines has asked the city to build a Federal Inspection Services (FIS)

facility at Hobby so it can fly AirTran flights to Latin America.

We welcome that competition at IAH, where there are plenty of gates and facilities and an

existing FIS, but we dont welcome the serious injury to IAH and to Houstons economy and

jobs that would result from the proposal to create a second international airport.

The consequences to us will be severe if the city allows this to happen. We told Mayor Parker

today that the diversion of customers from IAH to Hobby would make flying to a number of

markets uneconomic and cause us to have to reduce capacity and not fly planned new routes,

which would mean a 10 percent reduction in our planned capacity at IAH. This would directly

displace about 1,300 United jobs in Houston.

We must work together to prevent this from happening. We will do everything we can to protect

your jobs and our investment at IAH.

Why is this bad for IAH and United?

The proposal to have a second international airport in Houston would reverse a long-standing,

successful aviation policy that IAH is the sole international airport. That ensures that passengers

connecting to international flights go to one place, helping fill the large planes necessary to

economically fly to Asia, Europe and Latin America. The proposal would reverse the policy that

Gordon, and later Larry and Jeff, relied on in having Continental, and now United, invest more

than $1 billion since 1996 to make IAH a world class international gateway. It would reverse the

policy on which Jeff recently relied in deciding United would go forward with the first phase of a

$700 million project to redevelop Terminal B.

Houston Airport Director Mario Diaz seems intent on taking this forward. His consultants haveprepared a rushed, flawed study that makes Hobby international service sound like a tremendous

economic benefit to Houston, even to IAH. Southwest is quoting publicly from that draft study,

which hasnt even been released, to justify its proposal. Our internal and external experts are

telling us that the study is fatally flawed because it assumes fares so low that Southwests flying

the proposed routes would result in their losing tens of millions of dollars annually. The study

doesnt take into account todays skyrocketing fuel costs, which Southwest also pays. The study

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relies on the supposed low fares stimulating more flying and creating 10,000 jobs. That wont

happen. What will happen is serious damage to IAH and us.

To staff a second international airport in Houston, Customs and Border Patrol (CBP) would have

to divert resources from other locations, including IAH. CBP already has a significant agent

shortage, as it has deployed officers authorized for Houston to other cities and high-risk borderareas. IAH regularly sees some international arriving customers queuing more than 60 minutes to

clear customs, and occasionally 100 minutes or more. Stretching these scarce resources even

further would damage IAH and make Houston less competitive as an international connection

city.

We cant let the city politicians stunt IAHs growth at a time its thriving. Its our largest hub

and we have continued to grow it more than any other hub since the merger. IAH is tied for the

highest number of new destinations of any U.S. international hub. Our connecting international

traffic through IAH from Denver, Washington-Dulles, Los Angeles, Chicago and San Francisco

is up 25 percent since the merger.

What you can do

We will need your help to save IAH jobs. We will be asking you to help us get the word to the

Mayor and City Council, which will make this decision in the coming weeks.

We have created a Keep IAH Strong intranet site on Flying Togetherherefor all the latest

information. In the coming days, we will provide a way for you to send letters asking the Mayor

and City Council to oppose this idea. We may also call on you to attend meetings with us at City

Hall and talk to the officials making the decision.

This proposal is a bad idea for Houston and for us. Well work together to try to stop it.

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