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