Southwest gets ready for end of Write Amendment

[swamt]

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Southwest Airlines gets ready for end of Wright amendment
Tony Gutierrez/AP



One year from Sunday, the shackles come off Dallas Love Field, and Southwest Airlines Co. is already anticipating the moment.

It is planning a full year of celebrations and promotions to lead up to Oct. 13, 2014, when the Wright amendment goes away and Southwest can fly nonstop anywhere it wants in the United States.

The Dallas-based carrier, whose main offices abut Love Field, isn’t revealing everything it has planned. But on Monday, it will unveil a countdown clock in its headquarters lobby so that employees can see how many days remain until the big change.

“Something big is going to happen on 10-13-14,” Southwest executive Ron Ricks said Friday, “and it’s so big that we think it’s going to take a full year to celebrate. So we’re going to start the countdown at 10-14-2013.”

The Wright amendment, signed into law by President Jimmy Carter on Feb. 15, 1980, restricted nonstop flights from Dallas Love Field to airports in Texas and four bordering states — Oklahoma, Louisiana, New Mexico and Arkansas.

Not only did the law bar flights beyond those states, but it also barred airlines from selling a ticket that would take a passenger to airports beyond those states even on a connecting or one-stop basis.

In 1997, Congress put Kansas, Mississippi and Alabama inside the boundaries, and Missouri was added in 2005. Meanwhile, Southwest chief executive Gary Kelly began a push in November 2004 to get the law repealed.

The effort wound up with a June 2006 compromise among Southwest, American Airlines Inc., the cities of Dallas and Fort Worth and the Dallas/Fort Worth International Airport to do away with the Wright amendment restrictions in eight years. The law, passed by Congress, was enacted Oct. 13, 2006, setting up Oct. 13, 2014, as its expiration date.

“We’ve lived with the Wright amendment for 34 years,” Ricks said. “Now we’re going to take 365 days to say goodbye to it.”

Ricks, Southwest’s executive vice president and chief legal and regulatory officer, said Southwest intends to make a big deal of the impending change to remind people of what is about to occur.

“It occurred to us that our customers, our employees in North Texas and certainly our customers and employees outside North Texas all generally know something is supposed to happen sometime soon, but they don’t know what and they don’t know when,” he said.

“So starting Monday, by way of a regular celebration that we’ll roll out on a periodic basis over the course of a full year, we’re going to start telling people, first of all when, which is Oct. 13, 2014, and then later in the year as we move into it, more of the ‘what,’ ” Ricks said.

Ricks declined to specify where Southwest will fly nonstop from Dallas Love Field. Other executives have suggested that the likely destinations will be the cities that are largest in the Southwest system, such as Las Vegas, Phoenix, Chicago, Orlando, Fla., and Baltimore.

If history is any guide, Southwest probably will lay out its Oct. 13, 2014, schedule in February or March.

“Being Southwest Airlines, we may have a surprise or two here or there with regards to timing,” Ricks said, “but we don’t know yet.”

Follow Terry Maxon on Twitter at @tmaxon.

 

[SharoninSAT]

Southwest Airlines gets ready for end of Wright amendment

It's been a long time coming...
Congratulations Southwest!!!

 

[swamt]

It's been a long time coming...
Congratulations Southwest!!!

Yes it has. We are hearing thru the hangers that this is one of the "big ones" for Southwest and Dallas. Very curious how the other airlines will react over at DFW, and if any other airlines will jump over to LF from DFW. A year long of celebrations, advertising, and fare wars I assume. With SWA reaching it's full 100% AT acquisition, and the international flts kicking in and the WA gone, looks to be a very good year for us in 2014-2015 and beyond. I look forward to the count down starting Mon. One step at a time, but also look forward to getting international flts back to LF as well.

 

[FWAAA]

Yes it has. We are hearing thru the hangers that this is one of the "big ones" for Southwest and Dallas. Very curious how the other airlines will react over at DFW, and if any other airlines will jump over to LF from DFW. A year long of celebrations, advertising, and fare wars I assume. With SWA reaching it's full 100% AT acquisition, and the international flts kicking in and the WA gone, looks to be a very good year for us in 2014-2015 and beyond. I look forward to the count down starting Mon. One step at a time, but also look forward to getting international flts back to LF as well.

The settlement agreement that ended the Wright Amendment prohibits international flights from DAL. While it's possible that the agreement violates the antitrust laws, I don't see the agreement being invalidated.

 

[WNMECH]

The settlement agreement that ended the Wright Amendment prohibits international flights from DAL. While it's possible that the agreement violates the antitrust laws, I don't see the agreement being invalidated.

We will still sell one stop connecting flights to international destinations without any violation of the agreement.
When the Houston hobby international terminal is opened, we will sell a lot of tickets to close southern international destinations from Dallas love field connecting in Houston.
No problem.

 

[swamt]

The settlement agreement that ended the Wright Amendment prohibits international flights from DAL. While it's possible that the agreement violates the antitrust laws, I don't see the agreement being invalidated.

I have touched on this before and started an outright debate on the issue. I'm telling you right now; I will bet my house that SWA will get rid of the final international restrictions out of LF. It's already built in to the new LF airport plans (and why would that be) with the customs area dedicated. No the customs area is not built yet, it means they are building now to later quickly adapt to adding the customs areas later with no disruptions, so yes, part of it is being built now as it would cost triple to do some of the work later on. I know, they can't do that it's part of the agreement. Well the W/A was once only to connecting 4 states now wasn't it. SWA very slowly and quietly repealed the W/A all together (except for international flts) in a very little amount of time, about 15-17 years since they started slowly stretching further and further out. Once SWA sees the returns that the international flts deliver from Hou. they will want to have their own international flts from LF and why not, they are HQ there. I'm not saying all this will happen quickly, but soon after the lift SWA will be looking to gain more, watch and learn my friend I have over heard these rumors from the horses mouth, and he was the one that also mentioned the customs dedicated space already layed out in the "new" LF plans and prints. Pssssst-- BTW; they can also add gates to the new LF as well. I know, I know, but they are restricted. When you add jobs and help the economy like SWA has for Dallas for the past 40 years plus, they tend to have some pull on what they want. Looking forward to the next few years around here...

 

[swamt]

Here's some more on the Wright Amendment being lifted:-

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By Andrea Ahles
[email protected]
DALLAS — Southwest Airlines is ready to celebrate its first minute of freedom from the Wright Amendment at Dallas Love Field, even though it’s a year away.
The Dallas-based airline is unveiling a countdown clock Monday at its headquarters, reminding employees, passengers and North Texans that starting on Oct. 13, 2014, it will be able to fly nonstop anywhere in the U.S. from its Love Field home.
“We are going to start telling people exactly what this means, in terms of providing nonstop Love to the people of North Texas,” Executive Vice President Ron Ricks said. “We want North Texas to be as excited about it as we are.”
When the compromise agreement was signed in 2006, eight years seemed like a long time to wait for the travel restrictions to be lifted at Love Field. The long-negotiated delay was meant to give Dallas/Fort Worth Airport and its main tenant, American Airlines, time to prepare for the big change.
But in those eight years, the airline industry has changed dramatically as several carriers have merged – including Southwest, which bought AirTran Airways. Both Love Field and DFW have also undertaken expensive terminal renovations to make traveling in and out of the Metroplex more customer-friendly.
As a result, industry analysts don’t expect the end of Wright Amendment restrictions to dramatically affect air travel for travelers in the Metroplex, aside from new competition on selected routes.
“It’s an opportunity for Southwest, but it’s not a sea change in travel patterns in the Metroplex,” aviation consultant Michael Boyd said.
Restrictions to be lifted
Since the enactment of the Wright Amendment in 1979, nonstop flights out of Love Field were limited to only a handful of states. Local politicians said the restrictions were put in place to maintain a financially healthy DFW Airport.
But in 2004, Southwest began a public campaign to change those restrictions, saying it was time to “set LUV free.” DFW Airport and its supporters countered with a “keep DFW strong” campaign.
It took several months of negotiations among both airports, Southwest, American and the mayors of Dallas and Fort Worth to hammer out a compromise. In 2006, the deal was approved by Congress and signed into law by President George W. Bush.
“Lifting the Wright Amendment restrictions will only mean more choices for the traveling public, and that can only be a good thing,” said Fort Worth Mayor Betsy Price, who was not mayor when the compromise was reached.
The agreement allows for long-haul flights out of Love Field starting in 2014, while limiting the airport to 20 gates and prohibiting international flights.
It also immediately permitted airlines, primarily Southwest, to begin selling tickets to connecting destinations outside of the Wright restrictions. For example, a consumer could buy a ticket to Los Angeles from Love Field that included a stop in Albuquerque.
Currently, nonstop flights can be offered from Love Field to cities in Texas, New Mexico, Oklahoma, Kansas, Arkansas, Louisiana, Mississippi, Missouri and Alabama. But with so-called through-ticketing, Southwest has been able to offer one-stop service to other destinations including Las Vegas, Chicago and Orlando, Fla., for several years.
With the restrictions dropping next year, those destinations could see nonstop service from Love Field.
“Dallas-Fort Worth needs and will support multiple airports,” said Dallas Mayor Mike Rawlings, who was also not in office when the compromise was reached. “We are a big market and I think new travel options for Dallas-Fort Worth citizens is a very positive thing.”
The effect for Southwest
Southwest has been waiting for years to fly long-haul flights out of Love Field. And now that it will have that ability, the airline is being coy about its plans.
“We’re not sure what we’re going to do yet because it depends on demand,” Ricks said.
Since the compromise was reached, Southwest has added Boeing 737-800 aircraft which carry 175 passengers, 20 percent more than the Boeing 737-700s the airline has. The larger planes allow Southwest to add capacity at airports that are gate- or slot-constricted like Love Field. The airline has also added more seats to its older planes, increasing to 143 seats from 137 seats with its Evolve interior redesign.
And in the past four years, Southwest has added service to major business travel markets including LaGuardia Airport in New York, Reagan National Airport in Washington, D.C., and Logan Airport in Boston.
The carrier will likely unveil its new schedule for nonstop flights out of Love Field in the spring, as Southwest typically opens up its fall schedule for ticket purchases about six months ahead.
Industry analysts speculate that Southwest will reduce its daily flights from Love to Houston, Austin, Lubbock and other markets as it adds destinations. Southwest is likely to add flights to its hubs in Los Angeles, Denver, Las Vegas and Chicago’s Midway airport, they say.
“They are going to want to connect Dallas to those larger markets they’ve entered like New York, Boston and Washington, D.C., which were outside of the Wright Amendment perimeter,” said Bill Swelbar, an airline researcher at the Massachussetts Institute of Technology.
Newer airports, lower fares
Consumers can expect airfares to drop on the new long-haul routes that Southwest launches from Love, but most of the airfares in and out of the Metroplex are likely to remain unchanged.
“Historically, whenever we’ve seen new routes, typically you will see four to eight months of loss-leading promotions, and then the fares sort of stabilize,” said Rick Seaney, co-founder of Farecompare.com. “The bottom line is it helps on certain routes, maybe a dozen or so, where you’ll see lower prices.”
On the nonstop routes that Southwest adds to Love Field, Seaney said, he expects leisure fares to decline about 30 percent. Business travelers who typically purchase tickets seven days in advance will probably see a 20 percent discount, he said.
Low-fare competitor Spirit Airlines has already helped reduce fares on some routes out of DFW as the carrier has increased service to 26 destinations in two years. Fort Worth-based American, which handles about 85 percent of the passenger traffic out of DFW, has also faced competition from Virgin America and JetBlue Airways, which have added service to DFW.
“The airline industry is extremely competitive, and the expiration of the Wright Amendment will only intensify the competition for customers across the country and in the Dallas-Fort Worth market,” American spokeswoman Stacey Frantz said.
Both airports in the Metroplex are spending hundreds of millions to make their terminals more appealing to customers.
DFW Airport is in the midst of a $2.3 billion, eight-year terminal renovation. The first part of the remodeled Terminal A opened this year with new concessions, terrazzo floors and a new ticketing area for American.
“Our focus has been doing what we need to do to be a competitive airport, not just with Love Field but with other airports including those around the world,” said Phil Ritter, DFW Airport’s executive vice president of government and stakeholder affairs.
Love Field, which serves about 8 million passengers annually, has spent more than $500 million demolishing old concourses and redesigning its terminal. The first half of the renovation opened in April, giving travelers concessionaires like La Madeleine, Cru Wine Bar and Sky Canyon by chef Stephan Pyles. The airport also installed power outlets and USB connections at every seat in the gate for travelers who want to charge their laptops or phones while they wait in the departure area.
The last phase of the project, which includes gates used by United Airlines and Delta Air Lines and a new baggage claim area, will be ready in October 2014, just in time for the Wright Amendment restrictions to end.
“On Oct. 13, [2014], we will have guests to our new home so it was in our interest to spend the money to upgrade Love Field so people, when they came to our home, had a positive experience,” Ricks said.
Analysts say it’s a ‘nonevent’
Despite years of political arguments over the Wright Amendment, now that the repeal date is close, industry analysts say it will only minimally affect the region.
“Basically, American has locked up DFW and Southwest has locked up Love Field and in that sense nothing is going to change,” said Bud Weinstein, an economist at Southern Methodist University’s Cox School of Business.
Weinstein, who was a vocal critic of the Wright Amendment, argued in 2004 that the best way to boost competition for consumers would be to tear down Love Field and force Southwest to move to DFW. When the Wright Amendment restrictions go away next year, he doesn’t expect any new carriers to add service at Love since the industry has consolidated into fewer airlines.
Southwest has also grown its operations at other airports tremendously since the compromise was reached, leaving Love Field No. 8 among its top 10 airports by departures. Since Love Field will remain restricted on international service, the carrier has chosen to build its international operations out of Houston’s Hobby Airport as part of a $150 million renovation project there.
And with Love Field limited to 20 gates, it has little room for expansion. Analysts say it will continue to be dwarfed by DFW Airport, which serves more than 60 million passengers annually.
“It’s going to be a nonevent,” Boyd said. “Love Field is a secondary airport for the Metroplex and it’s always going to be.”
Andrea Ahles, 817-390-7631 Twitter: @Sky_Talk

Read more here: http://www.star-telegram.com/2013/10/13/5243721/in-one-year-wright-amendment-flight.html#storylink=cpy​

 

[AdAstraPerAspera]

Yes it has. We are hearing thru the hangers that this is one of the "big ones" for Southwest and Dallas. Very curious how the other airlines will react over at DFW, and if any other airlines will jump over to LF from DFW. A year long of celebrations, advertising, and fare wars I assume. With SWA reaching it's full 100% AT acquisition, and the international flts kicking in and the WA gone, looks to be a very good year for us in 2014-2015 and beyond. I look forward to the count down starting Mon. One step at a time, but also look forward to getting international flts back to LF as well.

Not sure how many airlines plan to jump over to DAL from DFW, considering DAL is limited to 20 gates and WN owns most of them.

 

[swamt]

Not sure how many airlines plan to jump over to DAL from DFW, considering DAL is limited to 20 gates and WN owns most of them.

Hopefully none. I believe there is language stating that the gates must be used or they will be forfeited. So maybe SWA could end up running out of all 20 gates, but I am sure somebody will come over, question is who? Still have CAL paint flying under UAL. AA pulled out after the last beat down they received at LF, however, I think they still hold the lease, but not positive... We shall see.

 

[FWAAA]

Not sure how many airlines plan to jump over to DAL from DFW, considering DAL is limited to 20 gates and WN owns most of them.

AA holds a lease for two gates at DAL. WN has 16, and CO (now UA) holds two of them. If new airlines demand access, they'll have to be given gate space eventually.

Hopefully none. I believe there is language stating that the gates must be used or they will be forfeited. So maybe SWA could end up running out of all 20 gates, but I am sure somebody will come over, question is who? Still have CAL paint flying under UAL. AA pulled out after the last beat down they received at LF, however, I think they still hold the lease, but not positive... We shall see.

With two gates at DAL, it's a safe assumption that AA will schedule 20-25 flights a day between 0600 and 2300 (the permitted operating hours) to cities like LAX, SNA, SFO, BOS, LGA and DCA. I can see three daily flights to each of those on A319s or E175s. Why would anyone choose AA over WN? Upgrade potential, no (d)Evolve seating, assigned seats, etc. As I posted before, business travelers will gladly put up with WN for one hour flights, but crammed into those crappy new seats for four hours? I doubt it.

The head of the WN FA union told the media that WN can turn a 737 in 20 minutes or so (she was exaggerating, as WN hasn't had a 20 minute turn in a long time) but that the new 738s require 45 minutes to an hour to turn (also very likely an exaggeration, as the 738 has just 32 extra seats compared to the (d)Evolve seating 733s or 737s.

It's no secret that WN's turn times have increased over the old 25-30 minute standard, and 738s will require a few extra minutes. If AA flies E175s from DAL, the turn times should be much shorter. Why do turn times matter so much at DAL? WN has just 16 gates. At CHI MDW, WN flies 250 daily flights from 32 gates (the size of old Love Field before they tore down the old terminal). With just 16 gates, WN will have to rediscover ground handling efficiency to be able to add a significant number of flights. Here is the article where the FA union head exaggerates about turn times:

http://www.baltimoresun.com/news/maryland/bs-md-southwest-contract-20131018,0,1548867.story

 

[AdAstraPerAspera]

Is it CO who is leasing a gate out to DL to do its ATL flights? Will that continue?

I can see lots of AA ExecPlats who live on the east side of the Metroplex being very excited about AA flights from DAL to LGA, LAX... JFK maybe, too?

 

[swamt]

Is it CO who is leasing a gate out to DL to do its ATL flights? Will that continue?

I can see lots of AA ExecPlats who live on the east side of the Metroplex being very excited about AA flights from DAL to LGA, LAX... JFK maybe, too?

AA was here (DAL) Right after the announcement about W/A repeal. Before this they were at (DAL) to put Legend Airlines out of bus. Once Legend was gone they left. Not sure if AA will come back or not, they were losing a cool million per day just to put Legend out of bus. Not sure if AA is prepared to come back again to start loosing big time money again, because SWA will undercut and win the fare war if they want to do one. Yes AA is leaner and can afford a short term fare war, but they could not hold out for a long term one especially against SWA. This will get interesting indeed. PS; I can almost guarantee you that SWA will fly DAL to LGA, LAX, as well as many other big and busy airports that they serve now, just not sure if AA will come again just to loose money each and every day again. But we will see...

 

[AdAstraPerAspera]

AA was here (DAL) Right after the announcement about W/A repeal. Before this they were at (DAL) to put Legend Airlines out of bus. Once Legend was gone they left. Not sure if AA will come back or not, ... just not sure if AA will come again just to loose money each and every day again. But we will see...

AA could have dumped the gate leases in BK, believe me, they are holding on to them for a reason. The Vice Chair of network planning is looking forward to 2014 just as WN is.

Remember, when they were using the gates they were only going to MCI and STL with them, and those are not profitable uses of those gates. They chose to hang on to them even though they weren't using them because they knew they would be needing them again once they could fly where they actually want to and better serve their high-value passengers

Don't forget, there are plenty of high-status AA passengers on the east side of Dallas that currently have to either take WN or drive to DFW...these flights are perfect for them and will save them some gas.

 

[swamt]

AA could have dumped the gate leases in BK, believe me, they are holding on to them for a reason. The Vice Chair of network planning is looking forward to 2014 just as WN is.

Remember, when they were using the gates they were only going to MCI and STL with them, and those are not profitable uses of those gates. They chose to hang on to them even though they weren't using them because they knew they would be needing them again once they could fly where they actually want to and better serve their high-value passengers

Don't forget, there are plenty of high-status AA passengers on the east side of Dallas that currently have to either take WN or drive to DFW...these flights are perfect for them and will save them some gas.

I think you mistook my post. I never said they will never come back. But if they were loosing so much money before, I'm pretty sure it will be more of the same when competing against SWA on the same routes. Rather W/A is here or not AA up against SWA out of LF won't last very long---I will give it 2-3 years MAX...

 

[FWAAA]

AA was here (DAL) Right after the announcement about W/A repeal. Before this they were at (DAL) to put Legend Airlines out of bus. Once Legend was gone they left.

Nope, that's incorrect. Legend shut down on December 3, 2000, when it ran out of cash and yet AA operated its service to LAX, ORD and LGA until September 11, 2001. When air service finally resumed, the AA DAL F100 service did not resume (along with about 20% of AA's schedule systemwide).

Not sure if AA will come back or not, they were losing a cool million per day just to put Legend out of bus.

Uhh, nope. That's not just an exaggeration, it's a fabrication. AA operated 11 round-trips per day from DAL, or 22 daily flights total. And you think that AA lost a million dollars per day on those 22 flights? That would be $45,000 per flight per day. AA could have flown 767s on those flights and flown people for free (no fares) and it would not have lost $45,000 per day per flight. Do you have a link to any source discussing the scope of AA's losses during the 17 months that it operated the DAL 56-seater Legend-Killer Executive Class service?

I'm certain that AA didn't make any money at DAL and probably incurred some very real losses, but a million dollars per day for about 500 days? Nope. AA didn't lose a half billion dollars at DAL in 2000-01. A million dollars per month? That would be believable. Legend lost a million dollars per month on average during its four year existence.

Not sure if AA is prepared to come back again to start loosing big time money again, because SWA will undercut and win the fare war if they want to do one. Yes AA is leaner and can afford a short term fare war, but they could not hold out for a long term one especially against SWA. This will get interesting indeed.

Fare war? Have you checked the WN last minute fares lately? WN from DAL or HOU is a rather expensive proposition. With fuel at over $3/gal, and no first or second bag fees, I can guarantee you that WN won't be starting a huge fare war from DAL.

PS; I can almost guarantee you that SWA will fly DAL to LGA, LAX, as well as many other big and busy airports that they serve now, just not sure if AA will come again just to loose money each and every day again. But we will see...

About those long-haul domestic flights from DAL: Two weeks before September 11, 2001, in late August, 2001, AA announced that it was discontinuing its LAX flights from DAL on September 11, 2001, as it was attracting mostly leisure travelers and not enough last minute business travelers, who were still flying from DFW. Here's what AA said:

American Airlines Inc. will stop its four daily flights between Los Angeles and Dallas Love Field on Sept. 11, the carrier said Friday. American spokesman John Hotard said Los Angeles attracted mostly leisure travelers. "It was just not profitable," he said.

Even though LAX was being dropped, the plan was to continue the four daily flights to ORD and add a fourth daily to LGA. But of course, all air travel ended on September 11 for three days, and when flights resumed, the DAL service to ORD and LGA did not resume.

So if AA's experience in 2001 was that four daily flights to LAX on all-first-class-equipped 56-seat F100s attracted too many leisure travelers and not enough business travelers, then how is it that WN will fill 143-seat 737s or 175-seat 738s with enough business travelers to make it worthwhile? As I've posted before, HOU-LAX/SAN/SNA/SFO is not very popular, as WN flies very few nonstops from HOU to those cities while UA continues to dominate those routes from IAH. Yet HOU is very popular on the short-haul routes, as WN dominates the intra-Texas flights from HOU.

Even AA flies several daily flights from HOU to DFW because HOU is so popular. HOU is just seven miles from downtown while IAH is 23 miles away - something I notice every time I travel to Houston. IAH is out in the middle of nowhere yet UA continues to dominate the west coast routes from Houston.

I think you mistook my post. I never said they will never come back. But if they were loosing so much money before, I'm pretty sure it will be more of the same when competing against SWA on the same routes. Rather W/A is here or not AA up against SWA out of LF won't last very long---I will give it 2-3 years MAX...

Maybe you're right - perhaps AA won't bother. After all, it's got data about how many business travelers actually wanted to buy nonstop flights from DAL to the outside-perimeter cities during 2000 and 2001. If all you're going to attract are leisure travelers, then you're already getting them, as they don't mind stopping in AUS or ABQ on the way to the west coast (and you're already permitted to fly them there from DAL as long as the plane makes a stop. They don't even have to use the Texas-two-step like before 2006 when you had to buy two separate tickets. How many of them are dying to fly in the new crappy seats for four hours on WN? I can guarantee you that it's substantially fewer than those who will put up with WN for those one hour flights within Texas.

Yes, WN will hype this like crazy. It will be the biggest thing within the company since, well, the purchase of Air Tran. But I think that reasonable people can differ on how much damage it actually inflicts upon AA and DFW.