Southwest Airlines wants American Airlines’ two gates at Love Field

[Hatu]

WASHINGTON To keep its merger with US Airways alive, American Airlines has to give up its lonely gates at Dallas Love Field, gates that it leases from the city of Dallas but doesnt currently use.

Southwest, already the dominant carrier operating out of Love Field, has an idea of which airline would be the best one to take over those two gates itself.

What I am saying is that Southwest will be able to do more with those two gates than another airline (new to the airport) would be able to, said Ron Ricks, executive vice president and chief legal officer.

http://aviationblog.dallasnews.com/2013/12/southwest-airlines-wants-american-airlines-two-gates-at-love-field.html/

 

[FWAAA]

As I've posted before, DAL is a tough call.    On the one hand, two gates are hardly enough to bring any real competitive pressure against AA over at DFW, nor are two gates enough to bring much competitve pressure against the dominant airline at DAL,  Southwest Airlines.    
 
Forcing new AA to give up those two gates didn't make a whole hell of a lot of sense compared to the more reasonable demand to give up some DCA slots and gates.
 
But it turns the antitrust laws on their head to even suggest that an airline that controls 80% of a scarce resource (DAL gates) should be awarded more of that scarce resource so that it controls 90% of that scarce resource.    The Justice Department shouldn't be in the business of creating or enhancing a monopoly, and that's precisely what it would be doing if it forced AA to give up its gates at DAL and then turned around and approved of WN acquiring those gates.

 

[eolesen]

Yep. And just as it makes no sense to hand over scarce resources to the airline who controls 80% of DAL, it also makes no sense to hand them over to any one of the four airlines which will control 80% of the domestic market post-merger.

And yet there are people who keep beating the drum otherwise...

 

[WorldTraveler]

Whether you think it makes sense or not, there are all kinds of legal issues that would be raised if existing carriers are forced out of an airport they currently operate in because of a settlement agreement between one legacy carrier and the DOJ.

The whole settlement agreement steps dangerously into the DOJ attempting to reregulate the US airline industry for the purpose of attempting to lower fares, which is patently contrary to Airline Deregulation.


I'm willing to wait and see how it all plays out but I would be absolutely shocked if the settlement agreement is allowed to proceed as it was announced.

As much as it slays you to comtemplate, DL is absolutely working the halls of Congress to push its cause that WN does not deserve the privileged status it has and that small and medium towns will suffer as LFCs add service in the largest markets while taking service away from smaller towns.

And it still won't change that the reshuffling of a handful of assets in the industry is not going to dramatically change the overall trends that have been taking place in the industry which has involved a significant transfer of key routes from AA and UA to LFCs and now DL (previously it was CO, DL, and NW).

 

[WNMECH]

Technically, Delta does not have any gates at Love Field.
AA does.
If AA loses its gates, Delta may have to try to lease gates from someone else.

 

[USFlyer]

If WN gets the gates at DAL over ANY other carrier, then that simply proves the DOJ is incompetent.  The whole point of this exercise was to give carriers access to heavily controlled or constrained airports.  Giving two more gates to an airline that already basically controls an airport would make no sense.  I suspect Virgin America will end up with them.

 

[robbedagain]

Just bec DL is working the halls of Congress does not mean Congress will actually act on it and even if they do the merger will already be closed and the biggie date of jan 7 be long gone
So time will only tell

 

[Glenn Quagmire]

Right after a budget, immigration reform, and judicial confirmations, they will get right on Delta's case for world domination at WT's request.

 

[Kev3188]

Technically, Delta does not have any gates at Love Field.
AA does.

An inconvenient truth.

 

[WNMECH]

If WN gets the gates at DAL over ANY other carrier, then that simply proves the DOJ is incompetent.  The whole point of this exercise was to give carriers access to heavily controlled or constrained airports.  Giving two more gates to an airline that already basically controls an airport would make no sense.  I suspect Virgin America will end up with them.

I am sure that WN will have an argument with that.
However I have my own to make. The wright Amendment Reform Act confines WN to 16 total gates between DAL and DFW.
If the DOJ thinks WN needs more than that to be a counter weight to the huge AA operation at DFW, then they may give them more gates.
Delta can get as many gates it wants at DFW.
WT has said so many times that they are not constrained in the North Texas market.

 

[WNMECH]

People can keep saying that SWA has 80% of Love Field and shouldn't get more.
But DAL and DFW are forever linked and controlled together by the Wright Amendment and the Wright Amendment Reform Act of 2006.
They should be looked at and treated as one market.

 

[WorldTraveler]

Technically, Delta does not have any gates at Love Field.
AA does.
If AA loses its gates, Delta may have to try to lease gates from someone else.

well duh. that's the whole point.

And AA wouldn't be giving up its gates if it weren't for the DOJ lawsuit and settlement.

The notion that DL is going to be forced out of an airport they already serve is mere fantasy on the part of more than a few people here.

 

[WNMECH]

I didn't say they would be forced out.
That is your fantasy.

I said they can serve the same market from DFW OR comply with the scarce resource provision of the Dallas Love Field Competition Plan as outlined in the Wright Amendment Reform Act of 2006, and seek leases from other gate holders.

Duh.

 

[FWAAA]

Does DL lease those gates from AA on a long-term lease?   Or do ya think that the lease term is short, like probably month to month?   Why does that matter?   Because if the lease term is short (a near-certainty), then AA could have terminated the lease at its option and DL would be "forced out of an airport" and DL would have no recourse.   Had AA not agreed to divest those gates, it's quite likely that AA would have begun some longer flights from DAL next October on the same date that WN begins its longer flights.    And if that had happened, it's quite likely that AA would have refused to renew DL's lease at some convenient date prior to next October.         

If you lease property on a short-term lease, it doesn't matter why your landlord disposes of the property - your new landlord doesn't have an obligation to renew your lease.   That's the inherent danger in leasing property on a short-term basis.  
 
Want some security when you lease property?    Then find someone willing to lease it to you for a long-term, like 10 or 20 years.   

 

[WorldTraveler]

that's all great but AA obviously controlled the gates at the time of the settlement agreement. Since the settlement agreement is subject to a 60 day comment period, AA could get in hot water if it terminated its leases.

What AA planned to do and whether they WOULD have renewed the lease for DL is immaterial... the settlement agreement required them to terminate.

I still think that E's theory is probably most accurate... the gates will be returned to DAL and carriers will be free to use them.

And the WN fan club that thinks they have an ironclad right to use 80% of the gates might be in for a surprise if there is significant demand for gates that goes well beyond the 4 gates that are supposed to be available for everyone besides WN.

And the notion that other carriers are supposed to go to another airport because WN chose to stay at DAL and thinks they can now dominate it is truly laughable.

I'm sure that when DAL loses federal funding because there is no means to accommodate new entrants, then WN might decide it is worth sharing its toys instead of having to pay for the airport without federal funds.