New Legislation To Eradicate Wright/shelby

More of Herb's comments in support of dropping W/A.

DALLAS, May 26 /PRNewswire-FirstCall/ -- Today, Southwest Airlines (NYSE: LUV - News) Chairman Herb Kelleher commented on legislation introduced by two Texas congressmen to repeal the Wright Amendment that unfairly restricts flights at Dallas Love Field. The following are excerpts from a press briefing:
"Southwest Airlines has been a bonanza in markets where we are allowed to offer unbridled, unconstrained, unshackled, low-fare service; not only by increasing traffic, but by creating a boon to local economic development," said Herb Kelleher, Southwest Airlines Executive Chairman. "Any time competition is fettered, it is a penalty to consumers.

"The size of Southwest Airlines' task force may pale in comparison to our competitors," Kelleher continued. "All we have is truth, right and justice on our side -- which makes us very successful. Those who are working to abolish the amendment are standing for the American people, for consumerism, and for free enterprise.

"There are crazy, weird, bizarre restrictions about what passengers can and can't do at Love Field; getting rid of the restrictions would be a considerable boon to the United States and our Customers. We are asking Congress to eliminate limitations that should have never been imposed in the first place; we are asking for the freedom to compete," Kelleher concluded.
 
Has anyone ever considered that the Wright Amendment was the best thing to happen to Southwest?

The old saying goes - "necessity is the mother of all invention". Toyota couldn't afford to manufacture cars in the same way that Ford did, so they created a more efficient manufacturing process. Southwest couldn't build a centralized network similar to other airlines, so they created a more decentralized route and hub structure that is the most efficient in the history of aviation. This was partially as a result of the restrictions at Love Field.

The Wright Amendment also provides Southwest with a very bizarre kind of protection -it makes Love Field undesireable to competition. The only aircraft that can be flown there outside of the restrictions are RJs that nobody would choose over a 737. If this restriction is lifted, what is to stop other airlines from attacking Southwest's most protected market?

I think the end of the Wright Amendment will help Southwest with Dallas to west coast service, as Southwest is the dominant carrier in the west/southwest. The only legitimate competition in the west comes from Alaska and Frontier, and neither are a threat to Southwest. America West is too busy trying marry the ugliest hag on the planet to bother with right now.

So I see revenue opportunities going to the West, but are they really that big outside of LAX and LAS (remember Southwest doesn't fly to SFO - so airlines that do offer SFO will be able to offer DAL-SFO in competition to Southwest's less desirable DAL-OAK flights).

However, service to the east coast will be a tough road follow - AirTran, JetBlue, and Spirit all have access to the most desirable airports in the area and could easily add flights to Love Field to keep Southwest out of those markets. I don't see Southwest adding many flights except for Florida and if they start flying to Charlotte (since that's the last holdout of US Airways and Southwest has made a living feasting off of those losers).

There will certainly be some east-west connecting traffic potentially through Love Field but is it really any more than what is offered through Southwest's other major hubs such as Hobby and Midway? Furthermore flights with primarily connecting traffic don't fit Southwest's business model from what I understand.

I just don't see how DAL-BWI, DAL-ISP, and DAL-PVD/MHT will be able to compete with DAL-DCA/IAD, DAL-BOS, and DAL-LGA/JFK. Southwest has avoided slot-controlled airports on purpose and it has paid off. However, now they will be competing directly with airlines who have that access and the same low cost model and - in the case of jetBlue - a superior product. They will be able to offer for the same price a better product and a more desireable destination.

I just don't see the lifting of the Wright Amendment as being that big of a 'win' for Southwest. It certainly won't be a bad thing overall, but it could open up a can of worms that they haven't had to deal with before.
 
Has anybody told this lady how much taxes Southwest Airlines pays the City of DALLAS!


DALLAS MAYOR LAURA MILLER

"I think it's a very serious change in the whole story when you have Dallas congressmen filing the legislation. It's no longer we're on the defense here and out-of-state congressmen are filing bills; these are people who live in the Metroplex.


"If Congress summarily says the Wright Amendment is gone, then everybody is in trouble. You're going to have American Airlines rushing into Love Field and you're going to have a giant draining sound coming from DFW. I mean the whole thing is unsettling.


"And that's why (Dallas), Love Field, the DFW Airport folks, Fort Worth ... if we can all sit down and say `Okay, let's take control of this situation,' I think we can come up with a win-win. There's a lot of scenarios.


"I think that Rep. Johnson and Rep. Henserling would be happy to see some movement. I mean, one of the reasons they're filing this is because they don't see any movement. You've got two entrenched camps; nobody is willing to talk about a compromise, so they're saying, `Okay, the game's over. We're going to get involved now.'


"I think D/FW Airport and American Airlines need to see it as a real threat to the status quo and if everyone is smart, they'd sit down at the table and try to figure this one out.


"I would like to see competition between Southwest Airlines and American Airlines because we have been waiting for months to fill those Delta gates at DFW and it's not happening. The only way to get air fares down is to have these two great airlines, that we're lucky to have, compete against each other directly and the only way to do that is if neither airline has restrictions.


"So, while as a board member for DFW I've been publicly against repealing the Wright Amendment, at this point my thought is American Airlines and DFW better see what's happening in Washington and react. And I'd like it if we could all come up with a scenario by which it gets repealed over a set period of time and we have some kind of understanding about who flies out of which airport. Maybe they both fly out of both airports. But we need to get control of our destiny and not have Congress do it for us.


"But so far the two sides have been very entrenched and they don't to find that solution. I'm hoping that by this happening, which is out of everyone's control down here, that everyone says maybe we need to sit down and come up with a solution that we have control of down here.


"It would be nice if we could lower the number of gates at Love Field, divert half the traffic, which is private jets, to Dallas Executive (former Red Bird Airport) by offering incentives, and hopefully people will voluntarily go.


"I've been saying consistently that I have given up hope that we can get a low-cost carrier to go to D/FW Airport and challenge American. I mean, I held onto that hope until about 30 days ago and now it's gone. So I have said since then, that I want them to go head-to-head. When I mentioned it to D/FW Airport, there was this reluctance to even talk about a plan B. Well, maybe this is what's going to get us to start talking about plan B."
 
Hey Bubble,

This is about the most realistic view I've heard from Ms. Miller. Seems like she's basically saying, "The genie's out of the bottle. Step up or get stepped on".

I'm guessing you copied all of the quotes from a news article somewhere. If so, again, I'm glad she's being real about the situation.

IMHO
 
Free markets demand the repeal. The reality is that no one will accurately predict the impact on DFW but, given DAL's size relative to DFW, they can't be that much.
The real problem is that AA already operates 10+ flights/day in many DFW markets and serves most domestic markets w/ narrowbody aircraft. AA simply doesn't have the ability to increase capacity when demand increases which means matching the fares from DFW will be dilutionary for AA. Not matching will give LUV the opportunity to cement itself in the market. AA is behind the eight ball and they know it. The irony is that DL's pullout started the whole process moving; DL could succeed at not only eliminating its losses at DFW but also put a huge dent in AA's profits. At the same time, WN is probably DL's ally on the east coast in defeating US since WN or B6 will never provide the hub and spoke service that DL and US are and which is essential to fully serve the east coast.
 
swflyer said:
Hey Bubble,

This is about the most realistic view I've heard from Ms. Miller. Seems like she's basically saying, "The genie's out of the bottle. Step up or get stepped on".

I'm guessing you copied all of the quotes from a news article somewhere. If so, again, I'm glad she's being real about the situation.

IMHO
[post="273572"][/post]​

She seems to be slanting toward DFW argument. She my be showing her bias since she was on the DFW board.

Now she's the Mayor of a City who can benifit from the increased revenue of airtraffic. I don't know what rank WN falls in corporations based in Dallas but they must submitt a pretty good check to the City. This should give some influence to your decisions as a mayor.

A City resident ie WN could benifit from this if it were to pass.

Finally, With all this being said, she does have a point in gradually increasing flights to Cities outside the W/A boundries. This would allow the City to adust to the growth of DAL and not be overwhelmed by the increase of other airlines coming in to FLY out of DAL.
 
TheDog2004 said:
The Wright Amendment also provides Southwest with a very bizarre kind of protection -it makes Love Field undesireable to competition. The only aircraft that can be flown there outside of the restrictions are RJs that nobody would choose over a 737. If this restriction is lifted, what is to stop other airlines from attacking Southwest's most protected market?
[post="273563"][/post]​

Dog-

First off, the WA allows ANY aircraft to be flown into and out of DAL so long as there are 56 or fewer seats. Look at Legend's DC9's and AA's response with MD80's. There was alot of free, seatless space on those aircraft.

Now...this "protection" argument that continues to go around in response to repealling a far outlived law doesn't make any sense. What "protected market" do we speak of? DAL to Harlington? Amarillo? Tulsa? Lubbock? I'm sorry, but what is there to protect? But what IS being protected is AMR's Dallas to LAX, NYC, CHI, PHL, etc, etc. Basically any reasonable market.

But I do agree with you that it has probably helped to shape the WN that we know today as they set their sights early on on "focus cities" rather than fortress hubs and on alternate airports. The difference is that they can actually fly to respectable markets from those other focus cities and alternate airports.
 
The plot thickens: This is from Representative Micael Burgess website


Reps. Burgess, Barton, Granger, Marchant come out in strong opposition to Wright Amendment Repeal Bill



WASHINGTON, DC, May 26 -


Representatives Kay Granger (TX-12), Joe Barton (TX-06), Michael Burgess (TX-26) and Kenny Marchant (TX-24) said today at a press conference that they strongly oppose proposed legislation introduced by Congressmen Sam Johnson and Jeb Hensarling to repeal the Wright Amendment.

Rep. Granger said: “Rep. Johnson this morning said at a news conference that this was an issue of airlines being able to have the freedom to fly wherever they wanted. He’s dead wrong. This isn’t a freedom issue. It’s a local economy issue. There’s an answer to this and it isn’t repealing the Wright Amendment. The answer is Southwest Airlines moving to D/FW where they will have room to expand and no restrictions.

“The precious state of the aviation industry since the 9/11 terrorists’ attacks, the added pressures of record high fuel prices and a $2.7 million capital expansion at D/FW to maintain its competitive edge among airports makes this the absolutely wrong time to change the North Texas aviation rules,†added Granger.

Rep. Barton said: “I’m proud to join this important fight to protect the North Texas economy and ensure low air fare costs by upholding the Wright amendment. The law has served all of us well and has fostered an environment in which two robust and profitable airlines have built a strong base for their operations. Wright has been fair and beneficial to businesses and consumers; repealing it now would be bad policy leaving two weakened airports in its wake.

“I’m not willing to jeopardize thousands of reliable jobs only to provide a risky gamble for an antiquated airport that has no room for growth. I’ll take up this fight every time,†added Barton.

Rep. Burgess said: “Almost three decades ago, the cities of Dallas and Fort Worth made an agreement to have one regional airport. If change is to occur to that agreement, it must come from the local level and not from Washington. If the mayors and county officials on both sides of the Trinity River can unanimously agree to change the agreement, then, and only then, should Washington become involved.

“Our community is fortunate to have two thriving airports that serve millions of satisfied customers and employees hundreds of thousands of North Texans. We should not jeopardize that which is working well already,†added Burgess.

Rep. Marchant said: “As the only Republican from the Dallas-Fort Worth region on the Transportation Committee, which has jurisdiction over the issue, I will do everything possible to prevent repeal of the Wright Amendment. I have briefed Chairman Don Young on the topic many times, and I continue to believe that this was a local decision made in good faith by two cities in 1979. If a change is to be made, it must be done by these two cities, NOT the U.S. Congress.

“Everyone is saying how complex this is, but it’s actually quite simple. This is about protecting the 16,000 jobs and the billions of dollars that D/FW Airport pumps into the region. D/FW Airport is the economic engine of North Texas, and I intend to do everything I can to protect it,†added Marchant.

The four Members pointed out that the circumstances that led to the Wright Amendment have not changed. The federal agency that regulated commercial passenger airports—the Civil Aeronautics Board--ordered an end to the years of bitter fighting between Dallas and Fort Worth by demanding that the two cities designate a single airport for the region. That was in 1964.

A 1968 agreement between the two cities resolved the situation: Both cities would close their existing airports to commercial passenger service. Fort Worth closed Greater Southwest, and tore it down. Dallas pledged to close Love Field to commercial passenger service. A single regional airport would be built.

That plan suffered a setback in the 1970s when a new regional airline, Southwest, won a court battle that allowed it to offer passenger service from Love Field.

To insure D/FW remained the major commercial passenger airport, the two cities and D/FW agreed on a plan to allow limited commercial passenger service at Love Field that would not harm D/FW. Southwest was convinced to join the agreement and, in 1979, the agreement was written into legislation by House Speaker Jim Wright. Hence, it is called the Wright Amendment.

Members also point to the three glaring reasons for why the Wright Amendment must remain in place and why repealing the Wright Amendment would cripple the local economy.

Firstly, D/FW recently made necessary expansions that increased their debt substantially. That reality, coupled with Delta Airline’s decision to pull out virtually all its service from D/FW puts the airport in a position where it must increase rather than decrease service.

Also, the high cost of flying from D/FW Airport is not to have more Southwest flights out of Love Field. Spreading commercial air passengers over several airports drives up air fares because D/FW Airport’s operating costs cannot be reduced by an amount that is correspondent to the drop in passenger volume.

Finally, Southwest has always had the option of coming to D/FW to expand. By coming to D/FW, Southwest would not only expand its service, but also help the economy as opposed to hurting it.

All four North Texas Members have vowed to fight to defeat the Johnson/Hensarling bill.
 
wnbubbleboy said:
Rep. Granger said: “Rep. Johnson this morning said at a news conference that this was an issue of airlines being able to have the freedom to fly wherever they wanted. He’s dead wrong. This isn’t a freedom issue. It’s a local economy issue.
[post="273601"][/post]​
Well, maybe for him it's a local economy issue but, since it's a federal law, there's nothing really "local" about it. So far that's two congressmen for repeal and four against. Now, what about the other 429?
 
ngneer said:
Well, maybe for him it's a local economy issue but, since it's a federal law, there's nothing really "local" about it. So far that's two congressmen for repeal and four against. Now, what about the other 429?
[post="273611"][/post]​
Well if anybody who reads this is in their district they need to call and have them reconsider. As soon as there's a bill with a number I call my rep. that's for sure.
 
wnbubbleboy said:
She seems to be slanting toward DFW argument. She my be showing her bias since she was on the DFW board.

Now she's the Mayor of a City who can benifit from the increased revenue of airtraffic. I don't know what rank WN falls in corporations based in Dallas but they must submitt a pretty good check to the City. This should give some influence to your decisions as a mayor.
...

Sure, if you're a crook.

For once it's nice to hear a mayor act without the blinders of "if it's inside my city limits, I care; if not, I don't". Dallas may be a big city, but it does not operate in a vacuum in the geographical region known as the Dallas/Ft. Worth Metroplex.
 
Let’s start with a little background. Back in 1968, the leaders of Dallas and Fort Worth concluded, very wisely, that it was in both cities’ – and the entire region’s -- interest to combine resources to support a single regional airport, instead of two competing local ones. The results speak for themselves. Today DFW Airport is one of the world’s premier aviation gateways. It is the undisputed driver of the North Texas economy – and with the recent completion of a $2.6 billion capital project, which includes the brand new Terminal D and Skylink train, it is poised to make an even greater contribution in the years to come.


When DFW was built, both Dallas and Fort Worth intended to close all the other local airports to commercial airline service, including Love Field in downtown Dallas. Every airline serving those cities was told they would have to move their operations to the new airport, and every airline signed an agreement committing to do so. This public policy was not unique; many communities around the country – including Kansas City, Detroit, Cleveland, Minneapolis/St. Paul, Seattle, and most recently Denver, have gone to great lengths to ensure that the new airports they build, at incredible expense, are not undermined by the airports they replace. In Denver they actually destroyed the runways at the old Stapleton Airport to protect the investment the community made in the new Denver International Airport.


The airlines serving Dallas and Fort Worth signed the agreement to relocate to DFW in 1970. At that time, Southwest had not yet commenced service. When DFW opened in 1974, Southwest exploited the fact that they had not signed the agreement, and refused to move from Love Field. Their refusal led to litigation that enabled them to stay at Love Field while its competitors, including American, were forced out. When Southwest later sought to fly outside of Texas from Love Field, more legal wrangling ensued, and ultimately a compromise was reached. Southwest and others supported federal legislation allowing it to keep operating out of Love Field, but only in short haul markets. The now-famous law, passed in 1979, became known as the Wright Amendment.


For the past quarter century, as dozens of carriers fought it out at DFW, Southwest has had Love Field pretty much to itself. And as even a casual observer of our industry knows, Southwest has been able to exploit this advantage and grow itself into a large and very successful airline.


What’s Happening Now

Today, Southwest is trying to further exploit their Love Field advantage by asking Congress to change the Wright Amendment – something it promised never to do. It has launched an aggressive public relations and lobbying campaign, seeking to remove or lessen the restrictions on Love Field operations.


Southwest would like consumers and citizens of Dallas to believe that the Wright Amendment is the reason they cannot fly more places on Southwest. But for more than thirty years, Southwest has had the opportunity to compete – as so many have – and serve any market it wants from DFW, a world-class airport just 12 miles from its headquarters. Southwest has chosen, and continues to choose, to remain exclusively at Love Field, knowing full well that airport’s federally-imposed limitations.


Southwest would also have everyone believe this debate is about low fares. It isn’t. As we know all too well, there is no shortage of low fares, or low cost competitors, at DFW. Fares have fallen dramatically during the past few years – and like any other airline, nothing prevents Southwest from offering whatever fares it would like from DFW anytime they would like.


The Potential Harm


If Southwest is successful in getting the Wright Amendment repealed or amended, it will do real damage to American Airlines, DFW Airport, and the greater community. Having invested literally billions of dollars in DFW, under the assumption that the Wright Amendment would remain in place, we will have no choice but to divert some of our resources from our DFW hub to Love Field. Why? Because while DFW is a great airport, many of our best customers live much closer to Love Field – and airport convenience is a primary driver of buying behavior. The last thing we can afford is to allow an unchallenged carrier at Love Field to undermine our position in the local market. At the same time, growing our Love Field presence will not be easy, since the facilities there are very limited and numerous neighborhood groups are concerned about the potential noise and other environmental consequences of opening up Love. Southwest – which has created a virtual monopoly by gaining control of the lion’s share of Love Field gates -- understands this very well, and insists that the Love Field Master Plan that restricts competitive access remain in place.


Common sense tells us that any expansion of service at Love Field – by Southwest, American or anybody else – will come at the expense of DFW. That’s why so many cities close or restrict their old airport when they open a new one. For DFW, the timing of this potential diversion couldn’t be worse, coming on the heels of the $2.6 billion capital project.


The community certainly won’t benefit if the Wright Amendment goes away. Splitting the region’s aviation resources between two airports was a bad idea in 1968, and it’s an even worse idea today. Fort Worth would be particularly harmed as the region’s transportation center shifts in favor of Dallas.


The Bottom Line

The bottom line is this: Southwest Airlines wants people to believe that it is looking out for consumers when, in fact, it is really looking out for itself. It is, once again, trying to legislate a competitive advantage – and the irony is that Southwest doesn’t need this sort of governmental help. I have made no secret of my admiration for Herb Kelleher, Gary Kelly and the rest of the Southwest team for their great success and competitive spirit. Nothing in this overview is intended to diminish that respect in any way. But, on this subject, they are simply wrong. Southwest is far and away the industry’s most profitable carrier, and there is no airline better positioned to take full advantage of the enormous investment our community has made in DFW. But despite its distinguished track record, Southwest is seemingly unwilling to compete on a level playing field in North Texas. And though its PR campaign would have everyone believe otherwise, it is apparently willing to damage the greater North Texas community to gain an advantage it doesn’t need