Call it the airport expansion paid for by Southwest Airlines.

The new, $1.1 billion terminal nearing completion at Sacramento International Airport owes much of its funding to the Dallas-based carrier, which on Tuesday celebrated the 20th anniversary of its launch in the Sacramento market.

When Southwest arrived, the Sacramento airport consisted of one cramped and aging terminal. A new terminal – occupied mainly by Southwest – was added in 1998. An even larger terminal and parking lot will be finished this fall.

"If you didn't have a dominant and profitable carrier (like Southwest) in the Sacramento market, this expansion might never have happened," said Kevin Freiberg, co-author of the 1996 book "NUTS!: Southwest Airlines' Crazy Recipe for Business and Personal Success."

Known for its low fares, customer service and quirky marketing campaigns, Southwest Airlines revolutionized the airline business with its frequent, point-to-point routes.

Since launching its inaugural Sacramento-to-Burbank service two decades ago this week, the carrier has emerged as the largest in the capital region, with 70 daily flights and about 53 percent of the local market.

It serves more than 2.3 million passengers out of Sacramento International Airport each year, which is four times as many as its nearest competitor, the now merged United and Continental airlines.

"The economic impact that Southwest has had in the Sacramento Valley has been profound," said Bill Shea, a local aviation industry expert and a former Federal Aviation Administration official.

"Their creativity and innovation revolutionized not only the local market but the airline industry as a whole."

Southwest has faced many challenges in Sacramento, including numerous fare wars with older carriers. In April, a jet bound to Sacramento from Phoenix was forced to make an emergency landing at a Yuma, Ariz., military base after a 5-foot hole opened in the aircraft fuselage.

But experts say the airline has handled those hurdles with a resiliency that places customers first.

On Tuesday, Southwest marked its anniversary with a ceremony for employees at Sacramento International Airport.

Amid cookies and punch, employees clad in blue Southwest T-shirts talked about their experiences launching the Sacramento service.

Becky Reyes, a customer service supervisor, recalled the initial startup as pretty modest.

The airline started its Sacramento service with 12 daily flights, including six to Burbank and six to Ontario before adding a San Diego flight a month later. The inaugural Burbank flight was about 60 percent full.

Reyes recalled that employees had to use a trailer for their break room and that workers had to use a closet to store their belongings.

Lynn Carroll, an operations crew worker, said her unit was housed in a basement office with no air conditioning, meaning that workers had to keep doors and windows open to cool off the room.

The problem was that the airport is built on what used to be rice fields, and during summer swarms of insects – rice bugs and crickets – would end up on the office floors, Carroll said.

"It was like a horror movie," said Carroll. "Everywhere you walked it was crunch, crunch, crunch."

Terri Northon, a Southwest operations agent, recalls the brutal fare wars with the existing carriers.

Several months before Southwest entered the Sacramento market in 1991, United and USAir slashed their round-trip fares to Los Angeles.

Not to be outsold, Southwest introduced $29 one-way fares from Sacramento to the Burbank and Ontario airports.

The scene was repeated many times during the 1990s as carriers such as Delta Airlines took on Southwest over passengers and market share.

Each time, Northon said, Southwest beat back the competition not just by matching fares but by providing more frequent flights and friendlier service.

"You can lower the fares all you want, but you have to have the employees to back it up," she said.

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