Gerard Arpey's Take

[wnbubbleboy]

Gerard Arpey, CEO of Fort Worth-based American, acknowledged that the airline has a lot to lose if Congress eliminates the federal law, which bars long-haul flights at Dallas Love Field.

"It would certainly have an adverse affect," he said during a meeting with the Star-Telegram's editorial board.

Arpey also vowed that if the law is eliminated, American will go to court if necessary to overturn restrictions on growth at Love Field. The airline would then develop a large connecting hub there, which could include international routes -- shifting numerous flights from D/FW along the way.

And he suggested that if lawmakers are going to consider eliminating the Wright Amendment, they should also consider closing Love Field entirely to commercial traffic.

"Closing it would be a more favorable move, from a public policy standpoint, than getting rid of the Wright Amendment," he said.

The amendment, enacted 26 years ago, restricts flights from Love Field to adjacent states. It was later amended to include Kansas, Alabama and Mississippi.

It was intended to protect Dallas/Fort Worth Airport from competition.

But last year, Dallas-based Southwest Airlines began lobbying to get the amendment overturned. Southwest operates from Love Field and not D/FW, so American has a near-monopoly on long-haul flights from the Metroplex.

Southwest executives refuse to operate at D/FW because they say the busy airport does not fit their business model. They say the amendment is out of date and anti-competitive, and argue that fares will drop substantially at both airports if they are allowed to fly longer flights from Love.

Attempts to overturn the federal law have been bitterly contested by D/FW Airport officials, who say it would hurt the airport when it is already reeling from the closure of Delta Air Lines' hub this year.

So far, no bill has been introduced in Washington to repeal the Wright Amendment, and Arpey said it's uncertain whether one will come forward this year.

But Arpey made it clear that American has much to lose in the battle. The airline, the world's largest, has lost $7.3 billion since 2000, including $761 million last year.

As its "fortress hub," D/FW is American's most profitable airport. Some analysts have estimated the value of the Wright Amendment protections at several hundred million dollars annually -- a number that Arpey supported Thursday.

"There is a lot at stake," he said. "American is the largest employer in North Texas."

He would not speculate whether a Wright Amendment repeal would push American back toward bankruptcy. But he pointed out that the airline is grappling with high fuel prices and intense competition from low-fare rivals.

"Things are tremendously challenging right now," he said.

Arpey pointed out that many of American's frequent fliers live closer to Love than to D/FW. The airline could risk losing those passengers if Southwest were able to fly long routes.

"We'll cede Lubbock, but not LaGuardia," said Dan Garton, American's executive vice president of marketing.

That would entail shifting a lot of flights from D/FW to Love. Garton speculated that other airlines would want to shift flights from D/FW to Love as well.

The city of Dallas's master plan for Love Field limits that airport to 32 gates and about 183,000 commercial flights annually, about twice what it now handles. To accommodate an American hub, the airport might need to grow substantially beyond those limits, Arpey said.

"I'm not saying that to be punitive or a threat," he said. "That simply reflects where our passengers are."

He added that American "would do everything possible to invalidate the master plan."

Henry Joyner, American's vice president of planning, said, "We would fight tooth and nail with every weapon we have to get in there."

Southwest officials have said they will fight to keep the master plan intact. Any move to eliminate it would also be hotly contested by neighborhood groups around Love Field, which strongly oppose any airport expansion.

Arpey said it would be better to ban all commercial flights at Love Field.

That would force Southwest to move to D/FW, he said and guarantee the larger airport's stability. "That's as much of an option as a full repeal," he said.

He added, however, that American is not actively pursuing a Love Field closure.

Garton pointed out that other cities, such as Denver and Austin, have closed secondary airports to support a larger one.

Arpey said that American wouldn't have agreed to the $2.7 billion plan to create a new international terminal and passenger shuttle train at D/FW if it had known that the amendment might be overturned.

"Shame on us, I guess, for not making sure it was locked down," he said. "But no one thought this would become an issue again."

 

[mweiss]

The airline would then develop a large connecting hub there, which could include international routes -- shifting numerous flights from D/FW along the way.

Yeah, right. Never mind that the runway system couldn't handle the AA flights alone, let alone the WN flights. This is nothing but Sabre rattling.

American is the largest employer in North Texas.

Which is very different from saying that American has more employees in North Texas than any other company.

Arpey pointed out that many of American's frequent fliers live closer to Love than to D/FW.

What Arpey didn't point out is that many of American's frequent fliers live closer to D/FW than to Love.

"We'll cede Lubbock, but not LaGuardia," said Dan Garton, American's executive vice president of marketing.

Whew! That's a relief. I thought they'd be much more worried about flights to places like LAX and Chicago. If they want to keep LGA, they'll keep LGA, Wright or Wrong!

To accommodate an American hub, the airport might need to grow substantially beyond those limits, Arpey said.

Which is fine...except that the airport is constrained by the amount of available land. You could put a hundred gates there if you wanted, but you can't push any more flights through than the two-and-a-half runways will support.

I'm not saying that to be punitive or a threat

Of course he is.

Arpey said it would be better to ban all commercial flights at Love Field.

Which is the reason for the threat.

Garton pointed out that other cities, such as Denver and Austin, have closed secondary airports to support a larger one.

Most North Texans would be offended to have the Metroplex compared to Austin in that regard.

 

[FWAAA]

If the restriction at DAL are lifted, I agree that the Master Plan is void, since its planning was based on the WA restrictions.

On this point, WN is wrong.

As to whether the restrictions at DAL should be lifted, AA is completely wrong. Arpey's braying about starting up another hub at DAL or moving the DFW hub there are pathetic. His rantings make him sound more like a teenager than the CEO of the world's largest airline. Perhaps the older guys on the Board will be prompted to take him aside for a little chat.

 

[jimntx]

Which is fine...except that the airport is constrained by the amount of available land. You could put a hundred gates there if you wanted, but you can't push any more flights through than the two-and-a-half runways will support.

Now, now Michael. You seem to forget that convenient little governmental trick called eminent domain. If the city of Dallas saw fit, the car dealerships along upper Lemmon and the warehouses on the Denton Drive side of the airport would be history. (And, I wouldn't be surprised if there weren't some WN behind-the-scenes financing for such legal proceedings.)

Most North Texans would be offended to have the Metroplex compared to Austin in that regard.

[post="259946"][/post]​

I think what offends me in this day and age is duplication of effort by various governmental entities on the basis of "Bugtussle has their International airport and used car dealership combo, so Petticoat Junction needs an International airport/Burger King drive-through also."

There are some metropolitan areas which need multiple commercial aviation facilities--NYC on the basis of population, LA on the basis of traffic and distance--but not many. If it weren't for the fact that Tom DeLay lives closer to Hobby than to IAH, I'd bet that Federal government money wouldn't be spent on 2 airports in Houston, either.

The argument that DAL is more convenient to people in Dallas than DFW thumbs its nose at people in the Mid-Cities and Ft. Worth. Should Ft. Worth push to return commercial air service to its former city airport? How about Denton International? Waxahachie Regional?

The same people who are spewing the blather about reducing governmental interference in the marketplace as an argument for lifting the WA are the same people who think Congress should continue the corporate welfare of trade restrictions on foreign competitors, farm subsidies (but only for major agribusiness entities), tax benefits for offshore incorporation, no-bid contracts for the "rebuilding of Iraq." and, coincidentally, involvement in the private affairs of families when there is political hay to be made (see also T. Schiavo case). But, don't get me started.

 

[mweiss]

You seem to forget that convenient little governmental trick called eminent domain.

Not at all. It's a technique used against people without money or political power. I understand that. Don't know how easily that would happen around Love, though.

I think what offends me in this day and age is duplication of effort by various governmental entities

Fair enough. However, with the exception of ATC, I don't get the impression that much of our taxes are being put into these airports. If I'm mistaken, please show me.

There are some metropolitan areas which need multiple commercial aviation facilities--NYC on the basis of population, LA on the basis of traffic and distance

For LA, on that basis, I could see justification for three. Instead, LA has five. Atlanta would have justification for two on that same basis, by the way.

If it weren't for the fact that Tom DeLay lives closer to Hobby than to IAH, I'd bet that Federal government money wouldn't be spent on 2 airports in Houston, either.

Wow...he's been representing Sugar Land since the mid-70s? I had no idea!

Should Ft. Worth push to return commercial air service to its former city airport? How about Denton International? Waxahachie Regional?

Knock yourselves out! 🙂

The same people who are spewing the blather about reducing governmental interference in the marketplace as an argument for lifting the WA are the same people who think Congress should continue the corporate welfare of trade restrictions on foreign competitors, farm subsidies (but only for major agribusiness entities), tax benefits for offshore incorporation, no-bid contracts for the "rebuilding of Iraq." and, coincidentally, involvement in the private affairs of families when there is political hay to be made (see also T. Schiavo case).

Really? That's strange, because I'm spewing the "blather," and yet I don't believe anything after the word "Congress" in your sentence. Apparently, you're wrong. <_<

I'm usually aligned pretty closely to your views, Jim...but not this time.

 

[jimntx]

Really? That's strange, because I'm spewing the "blather," and yet I don't believe anything after the word "Congress" in your sentence. Apparently, you're wrong. <_<

I'm usually aligned pretty closely to your views, Jim...but not this time.

[post="260026"][/post]​

Yes, you are "spewing the blather,", but I've never noticed any hypocrisy in your views, either. You've never said, "I want government to quit interfering with business, except in the case of the subsidy to my company/trade restriction against foreign makers of my product/bailout of my bankrupt company for the 'good' of the economy." A number of the people who post here see no problem with WN having a monopoly at an airport--DAL, MDW, HOU, BWI. It's an anti-competitive, fortress hub only if someone beside WN has it.

There is no way the pro-WA and anti-WA people are going to agree. From my viewpoint, WN has an enormous cost advantage by using Love Field. Yet, the anti-WA people cast the argument as if AA and others who existed at the time had a choice about moving to DFW. The anti-WA people put forth the specious argument that it is a level playing field if WN can fly DAL-LAX while AA still has to fly DFW-LAX.

You know and I know that "DFW should lower its landing fees to match DAL/AA chooses to use DFW/WN does not have a virtual monopoly at DAL/anyone can have gates at DAL that wants them" as arguments for lifting the WA are neither truthful nor realistic.

To be more accurate, we should all quit using the term, anti-WA, and instead substitute the more factual term, pro-WN. "If WN wants it, I want it. If WN disagrees, I disagree. WN good, anyone who stands in their way, bad."

 

[SWAFA30]

A number of the people who post here see no problem with WN having a monopoly at an airport--DAL, MDW, HOU, BWI. It's an anti-competitive, fortress hub only if someone beside WN has it.

At Southwest, we don't have fortress hubs...we have focus cities. 😉 But seriously, the reason people begin to either laugh, cry, or foam at the mouth(pick one) when AA starts preaching about monopolies is because it is the epitome of the pot calling the kettle black. The reason these commentaries are appearing in print and not on some local TV news editorial segment is that neither CEO could get through their respective spiel while keeping a straight face. The reality is that we are not talking about monopolies here, a monopoly by definition means an absence of choice.

There is no way the pro-WA and anti-WA people are going to agree.

I bet if you tried real hard you could get them to agree to disagree. 😀

From my viewpoint, WN has an enormous cost advantage by using Love Field.

A cost advantage borne of serving a second-tier facility with a silly restriction attached to it. It's not as if SWA is across town reveling in the lap of luxury on the cheap.

Yet, the anti-WA people cast the argument as if AA and others who existed at the time had a choice about moving to DFW. The anti-WA people put forth the specious argument that it is a level playing field if WN can fly DAL-LAX while AA still has to fly DFW-LAX.

Again, we find ourselves pretending that American has never flown out of Love Field since the Wright Ammendment was enacted. Did we all just hallucinate the F100s flying to ORD and LAX back in the Legend days?

You know and I know that "DFW should lower its landing fees to match DAL/AA chooses to use DFW/WN does not have a virtual monopoly at DAL/anyone can have gates at DAL that wants them" as arguments for lifting the WA are neither truthful nor realistic.

How is saying that AA can indeed set up shop at DAL not truthful. Unwillingness and inability are not interchangeable. Just because it would be distasteful doesn't mean it can't be done...kinda like what people say when WN publicly balks at moving to DFW...that knife cuts both ways.

To be more accurate, we should all quit using the term, anti-WA, and instead substitute the more factual term, pro-WN. "If WN wants it, I want it. If WN disagrees, I disagree. WN good, anyone who stands in their way, bad."

[post="260034"][/post]​

Standing in the way isn't "bad"... just dangerous...just ask AirTran. 😉 😀 Please know that I'm mostly being facetious...today is April Fool's day after all and I haven't gotten to play a trick on anyone.

 

[jimntx]

At Southwest, we don't have fortress hubs...we have focus cities.
Again, we find ourselves pretending that American has never flown out of Love Field since the Wright Ammendment was enacted.  Did we all just hallucinate the F100s flying to ORD and LAX back in the Legend days?
How is saying that AA can indeed set up shop at DAL not truthful.  Unwillingness and inability are not interchangeable. Just because it would be distasteful doesn't mean it can't be done...kinda like what people say when WN publicly balks at moving to DFW...that knife cuts both ways.

[post="260041"][/post]​

Fortress hub..focus city. You say po-tah-to, I say po-tay-to.

Typical pro-WN statement. Tell the truth, just don't tell the whole truth. The F100s that I flew out of DFW had 8 F/C and 79 coach class seats. The F100s that flew out of DAL had only 55 seats--all F/C. If WN wants to cut seating to 55 on some of your older, smaller 737s in order to be able to fly to LGA and LAX, as mweiss would say, knock yourselves out.

I don't think AA would have any problem at all re-establishing service at DAL. All WN would have to do is give up some of their gates and landing slots, so that AA and JetBlue and whoever else wanted to compete on those routes would have enough space to make it pay and be able to truly compete with WN on those coveted routes. If DAL is such a 2nd class facility, WN should be glad to get rid of some this burden.

We all know that the influential folk who live in Highland Park are not going to sit quietly while jet noise at DAL increases exponentially. The so-called Master Plan has carefully allowed for an overall minimal increase in traffic at DAL--which means that no one other than an airline already there (who could that be?) can really benefit from the improvements.

 

[ELP_WN_Psgr]

Ultimately, this all going to boil down to one simple question:

How badly does Dallas want to keep Southwest Airlines' corporate headquarters and the taxes they pay inside the city of Dallas?

It behooves city leaders to listen to Southwest when they say things. They generally say what they mean and mean what they say. El Paso is a prime example.

Several years back, El Paso "socked it to" the airlines serving my fair city with increased landing fees and terminal rentals. Southwest sort of suggested they ease up or it was going to cost them service. the city did not listen.

Since then, El Paso has kept the same amount of Southwest service. Albuquerque, a similarly sized market with similar demographics, has gotten nonstops to MCI, STL, SLC, PDX, SEA, OAK, TPA, MCO, and MDW.

Southwest will move from Dallas if they have to, to make a point. Is the city of Dallas willing to lose that tax revenue to placate the city fo Fort Worth?

 

[mweiss]

Yes, you are "spewing the blather,", but I've never noticed any hypocrisy in your views, either.

Why, thank you! 🙂

It's an anti-competitive, fortress hub only if someone beside WN has it.

That's a misleading statement. The difference between WN at the airports at which it dominates, and legacy carriers' fortress hubs, is one of behavior.

Look at AA's behavior in the past, where competition from a young upstart resulted in dramatic changes in AA's offerings (in the case of Legend, even reconfiguring aircraft). After the upstart was driven out, the behavior reverted to the way it was before.

Now look at WN's behavior after driving out competitors (US in BUR or BWI). The fares didn't shoot up afterward. The frequency didn't drop. The airplanes weren't reconfigured. In fact, you can't tell the difference between WN at BUR in 1991 and WN at BUR in 2005, other than the color of some of the airplanes.

This is why some people appear to have a double-standard when looking at the dominant airline in a market.

From my viewpoint, WN has an enormous cost advantage by using Love Field.

They do, but it's not one that cannot be matched by anyone else today. Any airline, not just AA, could move into DAL and offer competing service. Nobody will, mostly because there's no point with lower-hanging fruit out there.

Yet, the anti-WA people cast the argument as if AA and others who existed at the time had a choice about moving to DFW.

I don't see that. I agree that AA and BN (and everyone else, but only those two really mattered) had to move to DFW. I agree that there would be a cost incurred by moving back (which is why I called the threat to do so Sabre rattling...well, that and the wonderful opportunity for a pun), and that is a good reason not to force AA to move. I agree that there is a significant segment of the Metroplex market that would far prefer to fly out of Love.

The anti-WA people put forth the specious argument that it is a level playing field if WN can fly DAL-LAX while AA still has to fly DFW-LAX.

Has to? Who said anything about prohibiting AA from flying DAL-LAX, or, for that matter, DAL-LHR? As far as I'm concerned, anyone who wants to should have the option to.

You know and I know that "DFW should lower its landing fees to match DAL/AA chooses to use DFW/WN does not have a virtual monopoly at DAL/anyone can have gates at DAL that wants them" as arguments for lifting the WA are neither truthful nor realistic.

"DFW should lower its landing fees" isn't realistic, I agree.

But AA does choose to use DFW. They have flown from DAL recently, but have not been successful at it...so they continue to use DFW by choice. DFW works better for AA, just as ORD works better for AA than does MDW. AA chooses ORD over MDW, and if Wright were lifted tomorrow, AA would still choose DFW over DAL for the same reasons.

WN is the dominant carrier at DAL. If Wright were lifted, WN would still be the dominant carrier at DAL, because there are other battles that are easier to fight. I have little doubt, however, that other carriers would begin to use DAL as an outstation, in the same way that HOU and MDW are used.

Anyone can have gates at DAL. Today, it's not especially easy, but I'd be in favor of holding Wright in place until the other concourses were reconfigured back to another couple dozen gates. I suspect WN would be, too.

To be more accurate, we should all quit using the term, anti-WA, and instead substitute the more factual term, pro-WN.

Speak for yourself. 😀 I'm anti-WA, and not at all pro-WN (nor am I anti-WN...I'm WNeutral).

 

[SWAFA30]

Fortress hub..focus city. You say po-tah-to, I say po-tay-to.

Let's call the whole thing off.

If WN wants to cut seating to 55 on some of your older, smaller 737s in order to be able to fly to LGA and LAX, as mweiss would say, knock yourselves out.

And where exactly are all those 55 seat AA F100s that used to fly out of Love Field? The service was pulled because AA couldn't decide what to do with all the profits...right? Or, were they pulled off the routes because they served their purpose and wished Legend back into the cornfield? Typical AA response, alter your business model just long enough to crush the competition then go back to business as usual. Fuel hedges be d@mned... In the current environment operating a 55 seat 737 from DAL to anywhere would either have to be done at a loss or at astronomical fares that noone in their right mind would pay. Which is I'm sure coincidentally, why the Wright Ammendment exists in the first place. Why should Southwest or anyone else have to rip perfectly good seats out of airplanes just to circumvent nee comply with a ridiculous piece of protectionist legislation?

I don't think AA would have any problem at all re-establishing service at DAL.

You wouldn't know it by all the belly aching.

All WN would have to do is give up some of their gates and landing slots, so that AA and JetBlue and whoever else wanted to compete on those routes would have enough space to make it pay and be able to truly compete with WN on those coveted routes.

Southwest has their gates a DAL as a by product of nobody else wanting to fight their way through the Wright Ammendment. Let's see...Southwest has what around 16 gates at DAL?...the WA goes back to what 79' that's comes out to about 1 gate for every 1.6 years under the WA. jetBlue can have as many gates as they want but they have to do 19 months of WA pennance for each gate they take before they can go longhaul with them. After that it's game-on. Deal? It'll take about that long to install the new fangled seatback tee-vees than everyone can sit back and watch the bloodbath. "Clash of the LCCs" sounds like one of those crappy movies from the late-late show.

If DAL is such a 2nd class facility, WN should be glad to get rid of some this burden.

I didn't say 2nd class, I said 2nd tier. One man's burden is another man's diamond in the rough.

We all know that the influential folk who live in Highland Park are not going to sit quietly while jet noise at DAL increases exponentially.

Let's lift the WA and see. Although I can't imagine it gets much noisier than a hundred some-odd -200 take offs and landings a day.

The so-called Master Plan has carefully allowed for an overall minimal increase in traffic at DAL--which means that no one other than an airline already there (who could that be?) can really benefit from the improvements.

[post="260049"][/post]​

The same Master Plan that calls for 32 gates when Southwest only currently has 16? Maybe Southwest won't have to give up any of their gates after all and new kids on the block will be able to get their own.

 

[ramper_in_las]

The last time i looked this was a WN forum. If your AA management would worry about making your company profitable the WA would be a non issue. Or I have an idea instead of stealing your employees retirement to line your pockets concentrate on making your employees happy...

 

[FA Mikey]

The last time i looked this was a WN forum. If your AA management would worry about making your company profitable the WA would be a non issue. Or I have an idea instead of stealing your employees retirement to line your pockets concentrate on making your employees happy...

[post="260064"][/post]​

Work rules and pay is what you mean. AA hasnt taken or changed the employees retirements or retiree health benefits. They are up to date on all payments do to funding those programs as well.

PS I doubt most AA employees have an ability to be happy or content.

 

[mga707]

Garton pointed out that other cities, such as Denver and Austin, have closed secondary airports to support a larger one.

Untrue, and Garton should know better. In both cases, the original airport (Stapleton and Mueller) was permanently closed at the very moment that the new airport (DIA and the former Bergstrom AFB) was opened to commercial traffic. Neither of the former airports ever served as a "secondary" facility!
The only way to do a similar move in this case would be to build a time machine and go back 31 years to April 1974.
Love is still here and open for business. Deal with it.

 

[jimntx]

Let's call the whole thing off.
And where exactly are all those 55 seat AA F100s that used to fly out of Love Field? The service was pulled because AA couldn't decide what to do with all the profits...right? Or, were they pulled off the routes because they served their purpose and wished Legend back into the cornfield? Typical AA response, alter your business model just long enough to crush the competition then go back to business as usual.

[post="260062"][/post]​

Now, to be honest, the 55 seat service didn't really end until after 9/11. Keep a secret between you and me, but truth be known, AA would have liked nothing better than to keep the 55 seat service going--not to take business away from WN (though killing off Legend was the original intent). They would have liked to keep it going so that we could say we were the only airline ever to offer premium-cabin-only service and succeed. 😛