Saturday, February 09, 2019

TKC EXCLUSIVE!!! NEW KCI 'DEAL' SELLS OUT VOTERS TO SOUTHWEST!!!



One again KICK-ASS INSIDERS share insight, analysis and more deets on the new KCI deal that offers a distinct advantage to one airline over the next.

Here's the word sent our way . . .


NEW KCI: FEAST FOR GREAT WHITE SOUTHWEST?!?!

The recent airport pseudo-deal meeting featured a representative from exactly one airline. Steve Sisneros of Souhwest said he was representing all airlines at KCI and he reckoned a “majority” of these would sign a deal with the airport by Feb. 25th. Interesting how all the airport’s carriers ostensibly are represented by Southwest, given that the competitive relationship between all of these is more like the movie Reservoir Dogs. Think of Southwest as the great white shark in the ecosystem of airlines competition. As one observer put it, “They consume all the gates at the airports they fly to and effectively keep out other competition.” Nor is Southwest shy about its plans to eat the big boys’ lunch (meaning legacy carriers like American, Delta and United): “We’ll take customers from the legacy carriers,” … We’ll grow faster than they will.” This growth also includes reports that Southwest plans to dramatically ramp up international flights, a current stronghold of the legacies.

It’s easy to see why Southwest would like to dominate a new KCI. A shiny new hub at the geographic center of the U.S would grow a bigger ecosystem for Southwest. That might sound swell to Southwest fans, but not so fast. Are other KCI carriers like Delta, American and United eager to help pay for a new terminal, if makes them a hot lunch for the great white? The Southwest rep at today’s meeting didn’t bring a contract with other airlines’ signatures, just a belief they will sign by Feb. 25th. Why didn’t we hear directly from them?

Sometimes competitors win by not competing. What does this mean for air travelers? Two airlines have already said they won’t pay for the new airport, raising questions about continued service to an expensive new KCI. Another way to deal with expensive is to make the hooples pay more, a lot more. Airlines always deny guilt of course, but then rush to write big settlement checks to keep their case from going to a jury.

When the much-awaited deal arrives, will anyone in City Hall be looking to see if serves the flying public? Would they even know or care?
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Developing . . .

18 comments:

Anonymous said...

NO DEAL!

Anonymous said...

We encourage every member of the City Council to read the manual published by the Transportation Research Board. It goes into great detail about the structure and negotiation of Airport / Airline Rental Agreements. CFRG warned early on the main purpose of pushing for a new terminal was so the airlines could negotiate a new agreement. Under the current “compensatory” agreement, the airlines are under contract for 30 years. Under the new “residual" agreements, the term is 5 years. Which means if the airlines aren’t satisfied with the airport after 5 years, they can walk away and leave Kansas City taxpayers with a $3-4 billion dollar debt.

“with...the advent of a new Airline Agreement concept called the "Residual Airline Agreement" vs. the old Compensatory Airline Agreement that airports have used in the past. The Compensatory Airline Agreement held the airport liable if the airline went broke, could not pay or went out of business. The Compensatory Airline Agreement was more costly because operating cost were elevated to cover up and down years because of length of the agreement i.e. 30 yrs. The new Residual Airline Agreement is negotiated on a much shorter term i.e. 5 years and then renegotiated based on current cost of the airport operations taking into account current enplaned passenger, concessions, etc. Approximately 45% of the major airports now operate under the Residual Airline Agreement. “

The real danger is turning over total control of our airport to the airlines. If the new agreement is not properly negotiated by professionals, the airlines will be able to decide who gets to expand facilities and or routes, who gets to fly in and out of Kansas City and so on. The city loses control of the airport.

It is critical Kansas City gets the proper professionals to negotiate any new agreement with the airlines. We could end up like Denver. Their project went from $1.5 billion to over $5 billion. The major airlines took control after the smaller, low fare operators were squeezed out because of rising rental costs. The majors could then charge higher fees for tickets, etc.

The remodel plan is looking better every day..

Anonymous said...

Lets face it. The janitor at Southwest Airlines is way smarter than Sly or anyone on our city council

Anonymous said...

Remodeling should have bee the first choice and it is a much better deal than what is currently being proposed.

Anonymous said...

"It’s easy to see why Southwest would like to dominate a new KCI."

Because they dominate the current KCI. Duh. Want to overcome that? Be a better airline.

p.s. Your insiders are about as sharp as a bowling ball.

Anonymous said...

They should have begun remodeling the airport a year ago. Now we wait in squander over multiple fights on this and that and it drags on longer and longer.


But hey....at least we got Paseo stripped of its history and renamed to MLK boulevard.

Anonymous said...

This is all about reducing gates. Less gates + Less competition = Higher ticket prices.






Anonymous said...

Does anyone yet know what the extortion, er uh, license fee from the King family will be?

Anonymous said...

This just in!
You can't have an airport without airlines and flights.
You can build overpriced buildings and spout all the hype you want, but without airlines, you have a shoddy mall with gates to nowhere.
Southwest and these others are used to operating profitable private companies and have the expertise and experience to see clearly what has been going on with Sly and the council and the fiasco that the terminal "project" has become.
They know they're the key to any decisions and have nicely protected themselves going forward.
The taxpayers, on the other hand, continue to be "represented" by amateurish clowns.
Sad.

Anonymous said...

All this will be mooted by AOC.

Anonymous said...

All that 945am writes is so alarming along with everything else I don’t read in the Star, why can’t the council stop this it’s just not making sense ..? Would someone anyone just please stand up and show some leadership

Anonymous said...

sLIE and Jolie were garaunteed a lifetime of free flying on southwest so that’s why they’re fighting so hard for this deal. Another sweetheart deal for the well to do and who cares if the poor people can’t take their once in a lifetime dream vacation because they can’t afford to fly. Poor people just need to work and supply all the tax money they can.

Anonymous said...

Top 5 Things You Can’t Help But Notice:

1. Chastain would never let this happen. He didn’t come from the Frank White-Carwash Cleaver School of Finance.
2. While voters who voted Yes were deceived- Voters who voted No understood perfectly.
3. The Editorial Board fleeced themselves again.
4. Sly should have never ran for Mayor..Name 3 Things he accomplished ? (Crime is UP)
5, Should the bow tie industry be pissed for misrepresenting dignity?
6. How does City Hall being underwater correlate to the new airport deal?
7. Trump will not give poor Sly funds to build phase 2 of streetcar- did Sly learn anything?
8. Cleaver fighting for private pensions- did he learn gov’t overreach from Sly?
9. Should KC sell the Plaza Tennis Courts to raise money for the airport?
10. When will gentrification- with the help of “sly”-rocketing water rates- be recognized by the city? While there is no wall to keep illegals out- Heaven has a pearly gate- City Hall won’t get past that one.

Anonymous said...

Braniff and Eastern Airlines and PanAm and TWA are all rolling over in their graves with laughter. Airlines fleeced KC and The voters who voted Yes look like dumbasses and debt upon debt will be paid by the poor and rich.
If you think water rates are high now you haven’t seen anything yet.
2% Earnings tax will be on the ballot soon enough.

Anonymous said...

Whoever keeps writing and mocking the editorial board should remember they actually read this and their feelings are easily hurt.
They still are stunned about going all digital by 2020.

Jeliot Anderson said...

Good but wsy to long

Anonymous said...

The demorats sayvin 10 years we dont travel by air. The new green deal. So why build an airport

Anonymous said...

10:06 If you think southwest is a great airline try flying to Paris or Hong Kong on them. That’s right, they barely fly here in the states for poor people. The major carriers do not need MCI except for a few flights a day to their hub. Southwest heavily relies on the poor rubes of cow town. This is not a layover airport for anyone with money. There is no need for shops or restaurants. You go there to leave this crime infested, poorly run city.