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Plans New Flights to Capitalize on Republic’s Cutbacks : Southwest Air Expands in Phoenix

Times Staff Writer

Southwest Airlines plans further major expansion of its operations out of Phoenix to fill the gap created when Republic Airlines dropped much of its service to the Arizona city, Chairman Herbert D. Kelleher told the New York Society of Airline Analysts here Wednesday.

Many, though not all, of the new flights will be between Phoenix and both Northern and Southern California, Kelleher said in an interview later. He declined to give details.

“We are very interested in California destinations,” he said. But “there may be other destinations as well. If you are in Phoenix, your focus tends to be California . . . because of the supreme strength of the California market.”

The expansion of its Phoenix operations, he said, would be a “continuing process throughout this year and into next year.”

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Kelleher said that, since a daily schedule of five round-trip flights between Ontario and Phoenix was begun May 15, Dallas-based Southwest’s load factors--the percentage of seats filled--have been “tremendous.” But, he said, it is too early to tell just how successful the route will be since, until now, Southwest has offered promotional fares, some as low as $9 one way, on the route.

Kelleher said there has been a steady rise in Southwest’s load factors throughout all of its system. “We are, beyond question, going to have another excellent year in 1985. It will be a superb year,” he told the analysts. “Advanced bookings are extraordinarily strong.”

America West Also Benefits

He said that both Southwest and America West Airlines would prosper from Republic’s decision to reduce service in favor of its hubs in Detroit, Memphis and Minneapolis-St. Paul.

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America West, a regional airline based in Phoenix, serves 24 cities in the Southwest, the Midwest and most major California cities and has routes to Canada. It announced Wednesday that it is increasing by 15 from 90 its daily flights from Phoenix to nine Western and Southwestern cities, including Sacramento, on July 15.

America West President Michael J. Conway said in a telephone interview that “we would expect to continue to expand our Phoenix hub to the California market. We are already the dominant airline in that market.”

Republic, which dropped its Phoenix hub in April, cut its departures to 14 daily from 34. Among others, it dropped service to Burbank and Ontario.

Kelleher said he anticipated Department of Transportation approval of Southwest’s takeover of financially strapped Muse Air. Initially, he said, the acquisition will cause a reduction in Southwest’s earnings. Nevertheless, Southwest will be provided with a $50-million tax-loss carry-forward and $6 million in investment tax credits. “We are relatively confident that we can turn Muse from a losing carrier to a winning carrier in a short period,” he said.

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