Wright Amendment

[wnbubbleboy]

The whole article is on the "Dallas Morning News" website.

The Wright amendment was supposedly pushed through to protect D/FW Airport (i.e., the carriers serving D/FW). That was 26 years ago; D/FW is now the third-busiest airport in the world and dominated by American, the world's largest carrier (no more Braniff and virtually no more Delta). But Southwest still cannot even provide one-stop, single-plane or normal connecting air service between its headquarters city and points beyond the Wright/Shelby amendment states (yes, the Wright amendment can be amended: Sen. Richard Shelby, R-Ala., amended it to add three more states).

Dallas County reaped $15 million in taxes from Southwest in 2004, since Southwest's entire aircraft fleet is taxed in Dallas, not Fort Worth. Our air services are restricted, but our tax payments aren't.

The Dallas Love Field Master Plan, approved by the FAA, limits Love Field to approximately one-fifth the size of D/FW. All parties to the master plan, including neighborhoods and American Airlines, approved this size for Love Field and the amount of commercial air service it can support.

Fares at D/FW are competitive within the Wright/Shelby amendment states but are woefully noncompetitive beyond those states.

According to a Dallas Morning News poll in 1997, an overwhelming majority of the people in Dallas, Collin, Denton and even Tarrant counties favored repealing the Wright amendment. Only D/FW lobbyists stand against the people's will.

A nonstop perimeter rule was adopted at Reagan National Airport to encourage growth at Dulles International Airport. American Airlines lobbied successfully to have the Reagan National perimeter expanded. Apparently, what's good for the Northern Virginia goose is evil for the metroplex gander. Furthermore, no perimeter rule has ever included the goofy marketing and ticketing restrictions of the Wright amendment.

American lowered its fares at Miami in order to compete with low-fare service at nearby Fort Lauderdale and reported more passengers and revenues by doing so. Why, then, will lower fares at D/FW, produced by modestly enhanced competition from Love Field, harm either the airport or the airline?


Conclusion

Southwest does not intend to harm D/FW Airport or any of its air carriers. If that baseless concern persists, however, then the Wright amendment could be gradually, in steps, phased out over a period of years, starting with its unprecedented and goofy marketing and ticketing restrictions.

Dallas has a reputation as a free-market, free-enterprise city. Does that reputation square with the 26 years of restricting Love Field in order to protect the carriers at D/FW so that they can impose higher fares on the public?

If the goofiness does not stop after 26 years of protectionism, when will it end?

The time is now!


Herb Kelleher is co-founder and executive chairman of the board of Southwest Airlines

 

[jimntx]

As long as Herb is willing to allow the city of Dallas to jack up the landing fees, gate rentals, and other costs of operating from DAL to the same level paid by AA at DFW, and be willing to give up his almost total monopoly of the gates to allow other carriers--not just AA--to operate at comparable levels at DAL, then I say go for it.

But, as long as he wants to avoid the same base operation costs as DFW and maintain his own little fortress hub that no one--say JetBlue, Frontier, and Airtran--except SWA can profitably operate from, then the playing field is not level.

If he wants to fly non-stop from DAL to ISP or DAL to LAX, then he should give up some gates so that JetBlue can fly non-stop DAL-JFK or DAL-LAX. Then let's see who gets the business for that route.

Everybody tries to frame this as an AA-SWA fight, but SWA is not willing to let DAL be a base of operations for anyone but them. They want all the advantages of DAL and none of the disadvantages of DFW.

 

[TheDog2004]

exactly, jimntx.

Southwest will fight to keep it's OWN monopoly as hard as anyone else in the business.

 

[mweiss]

American lowered its fares at Miami in order to compete with low-fare service at nearby Fort Lauderdale and reported more passengers and revenues by doing so.

That's a misleading statement, and I'm sure Herb knows this. More passengers and more (gross) revenues doesn't necessarily translate to more profits, because there were also higher (gross) costs.

Similarly, jimntx, your comments are misleading. WN doesn't have an exclusive on the full complement of gates at DAL. The gate and landing fees are set by the airport, just as they are at DFW. Perhaps if DFW had the serious competition from across town, they'd lower their fees. Regardless, it's not WN's responsibility to pay more, simply because the guy down the street charges more.

 

[SWAFA30]

As long as Herb is willing to allow the city of Dallas to jack up the landing fees, gate rentals, and other costs of operating from DAL to the same level paid by AA at DFW, and be willing to give up his almost total monopoly of the gates to allow other carriers--not just AA--to operate at comparable levels at DAL, then I say go for it.

Even better how bout DFW lower the fees to DAL levels? Holding a "we're getting 'raped' so everyone should get 'raped' attitude helps noone.

But, as long as he wants to avoid the same base operation costs as DFW and maintain his own little fortress hub that no one--say JetBlue, Frontier, and Airtran--except SWA can profitably operate from, then the playing field is not level.

As fortresses go, DFW is the Alamo and DAL is one of those forts we used to make out in the backyard out of a refrigerator box. DFW is more expensive to operate out of because it is far and away a superior facility. Have Herb or any senior management said publicly that they were unwilling to play fair and allows others access to Love Field? Do they even have the authority to keep other carriers out?

If he wants to fly non-stop from DAL to ISP or DAL to LAX, then he should give up some gates so that JetBlue can fly non-stop DAL-JFK or DAL-LAX. Then let's see who gets the business for that route.

Careful what you wish for jetBlue wants(and gets) AA Customers too.

Everybody tries to frame this as an AA-SWA fight, but SWA is not willing to let DAL be a base of operations for anyone but them. They want all the advantages of DAL and none of the disadvantages of DFW.

[post="258890"][/post]​

Again, I'm not aware of any orchestrated effort to keep other carriers out of Love Field...at least not any that have risen to the level we've seen aimed at keeping the WA in place. If operating out of DFW puts a carrier at a disadvantage, whose fault is that?

 

[jimntx]

That's a misleading statement, and I'm sure Herb knows this. More passengers and more (gross) revenues doesn't necessarily translate to more profits, because there were also higher (gross) costs.

Similarly, jimntx, your comments are misleading. WN doesn't have an exclusive on the full complement of gates at DAL. The gate and landing fees are set by the airport, just as they are at DFW. Perhaps if DFW had the serious competition from across town, they'd lower their fees. Regardless, it's not WN's responsibility to pay more, simply because the guy down the street charges more.

[post="258893"][/post]​

I never said they had a lock on every gate; however, there are so few gates available to airlines other than SWA that it would be almost impossible for anyone to reach the economies of scale needed to effectively compete with SWA at DAL. AA, for instance, has 3 gates (I think) at DAL, but are restricted to using the concourse area at the gates only as office space.

 

[ELP_WN_Psgr]

I don't think it is a question of WN allowing people to move in to Love Field and compete with them. Folks have with less-than-satisfactory results.

Every time someone has gone out to DFW an attempted to compete with WN (TI,BN,AA) they ended up getting their butt handed to them on a platter. The sole exception is COEX to IAH and a bunch of that traffic was connecting stuff.

Folks tend to forget things pretty quick. Southwest is not all by themselves at Love Field because it protects them from competition. They were out at Love Field because it made sense for them to operate there. Passengers liked it. Gee what a concept....

Love Field can be expanded without Southwest having to give up gates. Southwest can justify the numbers of gates they have based on their current usage. In fact they might need to pick up a few more.

For years folks (in the mighty metroplexus media and city govt) have been telling us how wonderful & convenient DFW is. If that is so, then why are they concerned that a stampede of passengers will use Love Field in lieu of DFW?

 

[jimntx]

Even better how bout DFW lower the fees to DAL levels? Holding a "we're getting 'raped' so everyone should get 'raped' attitude helps noone.

Hey, I'm all for it. But, perhaps you can explain to the DFW Board and the cities responsible for the debts on default how they are going to pay off the airport bonds with lower fee collections. They are already hurting with the reduction in Delta's flying from DFW and no replacement yet.

As fortresses go,  DFW is the Alamo and DAL is one of those forts we used to make out in the backyard out of a refrigerator box. DFW is more expensive to operate out of because it is far and away a superior facility.  Have Herb or any senior management said publicly that they were unwilling to play fair and allows others access to Love Field? Do they even have the authority to keep other carriers out?

Did I ever say that Herb, et al, have expressly said this or tried it. All they have to do is control the vast majority of the gates at DAL. Sure JetBlue might be able to rent 1 or 2 gates at DAL, but they couldn't offer real competition for SWA on long-haul routes with that. However, if they could control 10 gates...

Careful what you wish for jetBlue wants(and gets) AA Customers too.

Oh, how well aware of that fact I am. However, if you look at NYC to Los Angeles, even with JetBlue flying that route big time, AA still has something like 13-14 flights a day on the same route, and they are full, and they appear to be making money.

Again, I'm not aware of any orchestrated effort to keep other carriers out of Love Field...at least not any that have risen to the level we've seen aimed at keeping the WA in place.  If operating out of DFW puts a carrier at a disadvantage, whose fault is that?

[post="258904"][/post]​

Again, SWA doesn't have to "orchestrate" an effort to keep other carriers out, they just have to make sure they keep their lease payments current on the great majority of the DAL gates. The statement about the DFW disadvantage is not really fair. At the time DFW was built, the carriers that existed then, including AA, were not given a choice. DAL was closed to commercial aviation, just as the city of Houston did with Hobby in June, 1969 when IAH opened.

I'm all for competition, and frankly, I believe that if SWA moved some ops to DFW to compete on long-haul business for the D-FW region, they would eat AA's lunch with certain market segments. But, saying that controlling the great majority of the gates at DAL and offering flights to LAX and NYC from there is fair competition with airlines that have to fly out of DFW because that is the only place that gates are available is not really truthful, now is it?.

 

[Ch. 12]

I never said they had a lock on every gate; however, there are so few gates available to airlines other than SWA that it would be almost impossible for anyone to reach the economies of scale needed to effectively compete with SWA at DAL. AA, for instance, has 3 gates (I think) at DAL, but are restricted to using the concourse area at the gates only as office space.

[post="258905"][/post]​

Legend sure seemed to have no problems obtaining gates for a (albeit short) decent schedule out of DAL. Come to think of it, AA had no problems finding them either when it flooded those markets with loss-leader fares on a tremendous over-allocation of inventory. But Legend is gone and AA has shrunk back into its shell at DFW.

I don't think that it is WN that other carriers have to worry about at DAL...it is AMR. You can learn alot from (relatively recent) history.

 

[mweiss]

AA, for instance, has 3 gates (I think) at DAL, but are restricted to using the concourse area at the gates only as office space.

Leaving aside for the moment how that was their own fault, the airport plan calls for a significant increase in the number of gates. AA can use those if they wish.

For that matter, WN has drawn down their flights at DAL. I'm sure that'd free up one or two gates if AA demanded it. It's much harder these days to maintain a monopoly on airport infrastructure.

 

[funguy2]

A few comments:

1. My understanding is that several concourse areas at DAL have been turned into offices... So there is presumably areas which could, with some re-working, be converted back into gate areas with minimal disruption to airport operations (except those of the offices moved).

According to the Dallas-Love Field Mater Plan, on page 4-5, it shows that DAL Main Terminal capacity could almost immediately be expanded from 16 gates in use today to 26 gates + 6 gates at the old Legend Terminal. In otherwords, if the Wright Amendment were lifted today, gate capacity could double in short-order.

Furthermore, removing obstructions could increase gate capacity to 55 gates at the main terminal, 61 over all.

So, I just don't see a gate constraint issue here... Even if LUV operated all 26 gates in the main terminal, new airlines could use 6 gates at the Legend terminal, while obstructions are removed. Gate capacity could be increase 281%.

2. Maybe the right answer for the cities of Dallas and Fort Worth is to ensure the same pricing of services at both DFW and DAL. Then airlines can pick and choose which airport they service based on the quality of services. City of Dallas can claim that by not undercutting DFW, they are not giving DFW a disadvantage. And certainly with the growth of the MetroPlex, DFW is still more accessible than DAL to a large portion of the popultion (making it a preferred airport).

3. If the decision is to continue with a perimeter rule of some kind, a DCA/LGA style perimeter rule should be used... The ticketing issue at DAL, while serving to benefit the legacy carriers, is really pretty silly.

 

[SWAFA30]

Hey, I'm all for it. But, perhaps you can explain to the DFW Board and the cities responsible for the debts on default how they are going to pay off the airport bonds with lower fee collections. They are already hurting with the reduction in Delta's flying from DFW and no replacement yet.

Again, SWA has not had the use of DFW's superior facilities for the past 20 some odd years why should they now be forced to help pay for them?

Did I ever say that Herb, et al, have expressly said this or tried it.

You never did but by stating that Herb must "allow" other carriers to come in to Love Field, what else am I to infer?

All they have to do is control the vast majority of the gates at DAL.

Where exactly is the line between a majority and a vast majority?

Sure JetBlue might be able to rent 1 or 2 gates at DAL, but they couldn't offer real competition for SWA on long-haul routes with that. However, if they could control 10 gates...

As has already been pointed out, lack of adequate gate space did not stop Legend Airlines. There is room for expansion/renovation if jetBlue or anyone has the cash and the notion to set up shop I don't see how Herb or anyone else could stop them. SWA has the infrastructure at Love Field because they decided years ago to not be chased off by the WA and grew in spite of it. The opportunity was there for anyone else who wanted to put up with the restrictions. Everyone else simply chose not to.

Oh, how well aware of that fact I am. However, if you look at NYC to Los Angeles, even with JetBlue flying that route big time, AA still has something like 13-14 flights a day on the same route, and they are full, and they appear to be making money.

I guess when fares come down it turns out there are enough passengers to keep everybody happy.

Again, SWA doesn't have to "orchestrate" an effort to keep other carriers out, they just have to make sure they keep their lease payments current on the great majority of the DAL gates.

Majority of existing gates. Again, there is room at Love for expansion.

The statement about the DFW disadvantage is not really fair. At the time DFW was built, the carriers that existed then, including AA, were not given a choice. DAL was closed to commercial aviation, just as the city of Houston did with Hobby in June, 1969 when IAH opened.

Yet, Love Field was eventually reopened and has been for decades. AA could have invested the money to upgrade facilities at Love Field set up a hublet and positioned themselves to benefit should the WA ever be repealed. Instead, AA did what they felt what in the their best interest and put all their eggs in the DFW basket. Southwest has a defacto monopoly at Love Field by nature of the fact that noone else wanted to be bothered with the Wright Ammendment.

I'm all for competition, and frankly, I believe that if SWA moved some ops to DFW to compete on long-haul business for the D-FW region, they would eat AA's lunch with certain market segments. But, saying that controlling the great majority of the gates at DAL and offering flights to LAX and NYC from there is fair competition with airlines that have to fly out of DFW because that is the only place that gates are available is not really truthful, now is it?.

[post="258910"][/post]​

The thing is, other carriers that really want gate space at Love Field always seem to find gate space at Love Field. Herb might even be willing to lend out a couple while another carrier builds their own...has anyone even bothered to ask?

 

[jimntx]

Don't misunderstand. I wish AA would start flying out of DAL again. I live less than 5 miles from DAL, but 17 from DFW.

 

[funguy2]

Again, SWA has not had the use of DFW's superior facilities for the past 20 some odd years why should they now be forced to help pay for them?

I see this as less of a LUV paying for DFW facilities it has never used and may never use in the future. I see this as more of a way for Cities of Dallas and Fort Worth to ensure that the City of Dallas is not trying to undermine the growth of the co-owned DFW. Furthermore, the City of Fort Worth should have the right to operate a commercial airport similar to DAL, if it charges the same rates as both DFW and DAL. It seems to me like a fair solution for all parties involved.

 

[jimntx]

A few comments:

According to the Dallas-Love Field Mater Plan, on page 4-5, it shows that DAL Main Terminal capacity could almost immediately be expanded from 16 gates in use today to 26 gates + 6 gates at the old Legend Terminal. In otherwords, if the Wright Amendment were lifted today, gate capacity could double in short-order. Furthermore, removing obstructions could increase gate capacity to 55 gates at the main terminal, 61 over all.

So, I just don't see a gate constraint issue here... Even if LUV operated all 26 gates in the main terminal, new airlines could use 6 gates at the Legend terminal, while obstructions are removed. Gate capacity could be increase 281%.

And, are you saying that SWA would not want any of the additional gates? I notice that you are reserving the possibility that SWA would get all 26 gates at the main terminal where all the parking is. And, get real, iwho wants to use the Legend terminal gates? If they're so special, why isn't SWA making use of them? Limited parking and access come to mind.

I know all about the vaunted Master Plan for DAL. There is a lot of opposition from the people living in the vicinity of the airport to expansion on that scale. And those same people managed to keep a Wal-Mart out of that same general neighborhood. I still haven't heard that the NIMBY objections have been dealt with. For that matter neighborhoods, such as Oak Cliff, that have gotten used to a minimum of overhead a/c noise over the past 30 years are not going to "go gently into that good night." Particularly, since north Oak Cliff has gotten "fashionable" again. Expanding the airport in a city that has zoning is not quite the walk in the park that it would be in Houston.