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Houston's Hobby Airport Starts 2020 With New Airline, Maintenance Facility

Published Jan 15, 2020 by Maggie Martin

Houston's William P. Hobby Airport is marking the start of the new year with a couple of big announcements.

Earlier this week, Allegiant announced it added Houston as one of a few cities it’ll begin serving in 2020. According to its press release, the new seasonal nonstop routes from Hobby Airport include Knoxville, TN, Asheville, NC, Savannah, GA, and Destin/Fort Walton Beach, FL.

Allegiant says it’s also expanding to Boston and Chicago. It’s the largest expansion in the airline’s 23-year history, driven by the company’s focus on leisure travel.

Allegiant’s announcement comes just days after Southwest Airlines unveiled a $125 million, 240,000-square-foot maintenance facility at Hobby. It’s the largest in the Dallas-based carrier’s network, and includes offices, training facilities and warehouse space.

“It’s proof of our devotion and our dedication to Houston,” Southwest CEO Gary Kelly said during the grand opening celebration, as reported by the Houston Chronicle. “And the opportunity that we see here, and the excitement that we have to continue to grow.”

Kelly told reporters that Houston is one of three key cities where Southwest is focused on adding flights over the next 10 years, according to the Houston Business Journal. Southwest’s CEO said he ultimately wants to connect Houston to South America.

“I don’t see that in the next year or so, but definitely down the road it’s something that we would be interested to do,” Kelly said.

Houston is the international air gateway to the South Central U.S. and Latin America. With the addition of international air service at Hobby Airport in ’15, Houston became the only city in Texas with two airports offering international service and one of only eight such cities nationwide.

According to Houston Facts, domestic travel at Hobby Airport increased by more than 7% to over 13 million passengers in ’18. Airlines that offer direct domestic flights from Hobby include American Airlines, Delta Airlines, JetBlue Airways and Southwest Airlines. Southwest is currently the only airline out of Hobby offering direct international flights.

The Partnership's 2019 Economic Highlights report says the Houston Airport System (HAS) offers nonstop flights to some 190 domestic and international destinations in 37 countries. Hobby is ranked as the 35th busiest airport in the nation. 

Learn more about air transportation in Houston in Houston Facts. Read how Hobby performed last year in the 2019 Economic Highlights report and get a monthly aviation update

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Houston Economy to Face Major Job Losses, Recession from Coronavirus and Oil Plunge

4/1/20
Houston is likely to see significant job losses and a prolonged drain on its economy from the COVID-19 coronavirus.   That was one of the major takeaways from a virtual presentation by Patrick Jankowski, Partnership Senior Vice President of Research, on March 31. Jankowski discussed his latest analysis of COVID-19, collapsing oil prices, the imminent U.S. recession, and their impact on Houston’s economy.  Jankowski stressed that because of the unprecedented and ongoing nature of the situation, predicting the economic impact is difficult at this time. “With the situation changing daily, we can’t really get a good read on what’s actually going on yet,” he said.  Jankowski referenced the next Bureau of Labor Statistics’ jobs report, which will be based on the number of employees on payroll during the second week of March and won’t include the waves of layoffs that happened during the third and fourth weeks of March. It won’t be until the April report is released in early May when we will see the real impact on the job market. Pandemic will determine recession’s length and severity  “We are coming off a period of 113 consecutive months of job growth, the longest expansion in US history and a phenomenal jobs report,” Jankowski said. “Last week we saw 3.3 million claims for unemployment benefits, and I believe that number will only rise as more people are laid off, the system becomes less overloaded and people figure out how to apply for benefits.”  Given the single week of job losses based on the initial claims for unemployment insurance in Texas and Houston’s share of Texas’ jobs, Jankowski estimates mid-March losses in the region will be around 37,945 jobs.  Jankowski noted that measures to combat the coronavirus are also combating the economy. He referenced the U.S. GDP forecasts from major financial institutions that estimate a decline in GDP for the first quarter of the year that continues through the rest of the year.   “From my perspective - yes, we are in a recession and the situation will worsen in Q2,” Jankowski said. “We hope to have some growth in Q3, but we will end of the year worse off than at the beginning.”  Add that to the drop in oil prices and the Texas Railroad Commission being asked to regulate crude oil production for this first time since the 1970s, Jankowski believes the crude collapse will only add to Houston’s misery.  Small businesses and other industries hurt the worst  Jankowski mentioned the Partnership’s survey of its small business members and found that 29% were unable to deliver goods or services, 59% are operating below half capacity and the most concerning, that 41% can survive only 1 to 4 weeks.  He also highlighted industry sectors that are most at risk during this initial period and the 777,000 jobs tied to those sectors. The sectors include those impacted by social distancing (like retail), those whose services can’t be delivered remotely (such as plumbers and other home services), those that aren’t considered essential (such as the arts), and most small businesses (that tend to operate on thin margins).   “If this virus continues after May, every job is at risk, every sector is at risk,” Jankowski stressed.  “And even if you are working from home and able to provide services to some degree, you may be affected. We will see additional layoffs to what we’ve already experienced.”  Houston predicted to lose at least 150,000 jobs  There are two ways to predict how Houston will fare – looking at models based on assumption or based on history.   The Institute for Regional Forecasting shows 18 different scenarios of how the virus and oil prices will play out, with the most likely scenario from their prediction showing Houston down by 44,000 jobs. On the other hand, The Perryman Group’s model is forecasting 256,000 jobs lost.   “These are two very different forecasts and you’re really seeing that uncertainty play out in these models,” Jankowski said.   By referencing the history of recessions Houston has experienced, Jankowski estimates Houston’s jobs loss will hover between 150,000 jobs and 350,000 jobs.   “Given how Houston fairs when oil is faring badly and then when the US economy not doing well, we are likely to look like between 2008-09 recession and oil bust we had in the 1980s,” Jankowski said.   With a job loss of 13.2% from 1982, that amounts to about 417,450 jobs today. Using the Great Recession benchmark of 4.5%, that loss is closer to 142,325 jobs.  Collapsing oil prices on par with 1982 energy bust  With the tensions between Saudi Arabia and Russia spilling onto the world stage and affecting the price of crude, Houston has already felt the effects.   On March 30 of this year, the price of oil closed at $21.07 a barrel. During that same month in 1982, the price was $10.25 but adjusted for inflation, it closed at $24.37 a barrel.   “We can expect crude to slowly climb back into the low $30s by mid-summer without a Russia-Saudi deal,” Jankowski said. “We’ll see any jobs we regained from the 2014 fracking bust disappear and a leaner, smaller industry in the next two years with more consolidations and bankruptcies taking place.”  Houston in one word – resilient  One of the biggest determining factors in an economic rebound will be the level of fear people still have around the virus, Jankowski said. Even on the downward slope people will practice at least a degree of social distancing. He reiterated the damaging shock to consumer confidence the virus has caused.   “The economy really won’t be able to recover until people feel comfortable spending again. However, if there’s one word I would use to describe Houston, it would be resilient,” Jankowski said. “We've been through five downturns since the 1980s and yet the economy is larger now and more diverse than ever before.” 
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