Wright Amendment

[AirplaneFan]

Keep in mind that DFW is what it is today because of the Wright ammendment. Billions of $$$$$$$$$$$$$$ has gone into DFW because of it. This was money from Dallas-Ft. Worth as well as AA. And you could include what Delta put into Dallas for years.

So, if the ammendment was to be repealed, the AA has a right to sue for more gates at Love.

[post="271969"][/post]​

Anyone has the right to sue. However, if SW had just 20 gates, they could run a very successful national operation. I just don't think it matters if AA goes over there. It has been that mentailty that has gotten a lot of the hub-n-spokes in their current quagmire (same for the old European powers). The old European powers would constantly go to war over the silliest of reasons. Their mentality was that they were the super powers and no one could collectively knock them off their perch. Of course, now those European powers are coming to grips with the new realities, that the U.S. is the only superpower. And in the aviation industry the new reality is that there is only one superpower and that is Southwest Airlines.

So AA could sue, so AA could come over to Love. It just doesn't matter.

 

[aafsc]

I don't think that AA has the gates (3?) to put 100 flights in per day. And where are they going to go? And where will the planes come from? So AA would immediately pull down flights elsewhere in the country just to put a lot of flights into Love.

AA has this misguided notion that Dallas passengers will be loyal to it over SW. Of course, past experiences tell us otherwise. AA would get killed at Love by SW. SW would start with 4 nonstops daily between DAL and LAX, PHL, BWI, MDW, PHX, LAS, MCO, TPA. $79 one-way.

2 non-stops daily between DAL and MHT, PVD, BDL, OAK, RDU, BNA, SEA.

Would AA match those flights and those prices? For how long?

[post="271951"][/post]​

AA has its 3 and there are 6 gates at the old legend terminal they could probably get for a total of 9. AA could get 10 flights per gate per day. They do it at DFW all the time. So 9 gatesX10 flights per gate= 90 flights. As to where they will go from DAL, I think it would be to their largest cities that SW decides to fly to. I believe there are certain cities where AA wants to protect their market share. What ultimately happens with the Wright amendment and what SW and AA actually do remains to be seen.

 

[eolesen]

As I've said before, personally, I don't have a problem with the Wright Amendment being repealed.

What I do have a problem with is the City limiting the number of usable gates at Love.

The Legend Terminal is vacant, but I don't see it as a viable option. It was never built to handle more than 350 people at a time. Put six MD80's in there, and you're looking at close to 900 people outbound... There's also very limited options for parking and access to rental cars over there.

AA currently has three gates which could be operational within 45 days (just need jetbridges to be hung), but they can't legally use them until the Love Field Master Plan is modified. And the City has said they won't modify the master plan.

Putting 24-33 flights a day into DAL is entirely feasible with the existing three gates. If you put one or two on a hardstand during the day, the number goes up.

 

[LoneStarMike]

The Legend Terminal is vacant, but I don't see it as a viable option. It was never built to handle more than 350 people at a time. Put six MD80's in there, and you're looking at close to 900 people outbound... There's also very limited options for parking and access to rental cars over there.

[post="272031"][/post]​

I agree and if the Wright Amendment is repealed, here's what I think might happen.

Does anyone remember the "Dogfight over Dallas" article that ran in D Magazine back in 2000? It's archived off of D Magazine's website, but you can still read the article via the internet archives. (Note: each page is archived separately.)

Page 1

Page 2

Page 3

Page 4

Page 5

Page 5 provides some background on the East Concourse and Legend's Terminal.

Legend had originally wanted to fly out of some of the former Braniff gates in the East Concourse, but the City of Dallas said that legally it could only be used for office space. AMR later leased the concourse as office space for one of its affiliates.

The article notes:

Legend was forced to build a $21 million private terminal and parking garage on the Lemmon Avenue side of Love on land controlled by Dalfort Aviation. Grandfathered under an 1955 legal argument, the leasehold was allowed up to six gates for commercial air traffic. For the investors, it seemed a safe real estate play. If Legend failed, the gates can be used for increasingly popular commuter flights by so-called regional jets.

American even tried to block the construction. After the Staubach Company made a pitch to develop Legend's terminal, they abruptly pulled out.

"American told them they'd lose the Sabre contract at Solana," says Scott McArtor. "We had to start all over."

The Staubach Company is owned by former Dallas Cowboys quarterback Roger Staubach.

Fast forwad to December 2, 2000 when Legend, ceased operations. They filed for bankruptcy a short time later and were liquidated in the spring of 2001. Not too long after that, in the summer of 2001, Roger Staubach was named to the board of directors of AA.

I thought I had read at one time a few years ago, that after Legend liquidated, the Staubach Company did, in fact become the leasing agent for that property but that may have been just a rumor and if true, I don't know if that's still the case.

If it is true, since Roger Staubach sits on the board of directors at AA I seriously doubt those gates will ever be leased to an AA competitor.

And that brings up another interesting point. In the Love Field Master Plan it states:

If in the future the Lemmon Avenue Terminal is no longer used for air
carrier gates, the City will allow up to six additional gates to be placed
in the Main Terminal.

An additional May 25, 2001 article about the terminal mentions:

The city of Dallas recently gave the partners a big boost with its new master plan for Love Field. It limits Love Field to 32 passenger gates. That gives the Legend terminal owners almost a 20 percent share of the Love Field market.

"Their six gates are included in our count," said Terry Mitchell, Dallas' assistant director of aviation. "I'm sure they are out there beating the bushes to get tenants for their building."

Mr. Mitchell said that should the Legend terminal owners decide not to use the facility for commercial airlines, the city could replace the gates with six more in the main terminal that faces Cedar Springs Road.

The building's owners have the option of converting the property to a general aviation facility.

Source

Theoretically, another use could be found for the Legend Terminal and AA could build those six additional gates to go with the three it already has for a total of nine gates in the Main Terminal. It wouldn't be enough for a full-fledged hub, but they could have a pretty good "focus city" operation with 70-80 departures per day.

If AA were able to get nine gates in the scenario I described above, and if they could run an average of 9 departures per gate, that would be a total of 81 departures per day or slightly less than 10% of the 850 deparures per day they currently have at DFW. DFW might suffer in the short term, but the lower fares would increase demand at both airports and DFW most likely would gain those departures back, either from AA or other carriers.

It seems like lower fares would also increase the percentage of O&D travel into and out DAL and DFW which would provide more parking revenue to both airports. Isn't parking one of the main sources of revenue for commercial airports?

Southwest issued a press release earlier this month on the one year anniversary of launching service into Philadelphia

Southwest Airlines Celebrates One Year in Philadelphia

It gave some interesting statistics, but the one that jumped out at me was this one:

In the third quarter of 2004, the average one-way fare between Philadelphia and Chicago Midway fell 46 percent, while traffic increased by 137 percent. In addition, the average one-way fare between Philadelphia and Chicago O'Hare (an airport that Southwest Airlines does not serve) fell 44 percent, while traffic increased by 28 percent, showing that Southwest Airlines' arrival in new markets benefits sister airports and other airlines.

I think the DFW would enjoy the same effect if the Wright Amendment were repealed.

I think AA could carve out a niche for itself at Love Field by serving cities and/or airports Southwest doesn't serve. Let AA serve BOS from Love Field while Southwest serves PVD and MHT. Let AA serve ORD while Southwest serves MDW. Let AA serve LGA and JFK while Southwest serves ISP. Let AA serve SFO, while Southwest serves OAK Let AA serve DCA and IAD while Southwest serves BWI. Let AA serve MIA, while Southwest serves FLL and PBI. Let AA or other carriers serve ATL and MEM and MSP and CVG and DEN and other cities Southwest doesn't serve. With lower fares, there should be enough traffic for everyone at both airports.

Since AA would have a limited number of gates at DAL, they could cater to their best customers who live closer to DAL than DFW. The flights out of DAL would be mainly for O&D travel between Dallas and key business destinations, while all connecting travel could be routed through DFW.

AA currently has three gates which could be operational within 45 days (just need jetbridges to be hung), but they can't legally use them until the Love Field Master Plan is modified. And the City has said they won't modify the master plan.

[post="272031"][/post]​

I think you may be wrong about that.

As part of the master plan, the City of Dallas and Love Field agreed to let AA keep (and use) the three gates they had refurbished, and in return, AA paid for the demolition of the rest of the concourse. Southwest agreed to build (and pay for) a new cargo facility on the site of those demolished gates.

Source

LoneStarMike

 

[Connected1]

LSM...I really appreciate posts like yours on this board. Thanks for presenting a well-thought-out argument that is supported by verifiable facts.

That said, I am not in 100 percent agreement with everyone you said - particularly the part about the so-called "Southwest Effect." The data that you have linked is biased toward short-haul flying so the comparison to long-haul flying out of Love may not be as valid as you might think. The most recent DOT air fare report shows that AA is able to command a 20-30% premium over WN for markets greater than 1000 miles. (apologies - I don't have the link handy)

The other point worth noting is that a 44 percent decrease in average fares coupled with a 28 percent increase in traffic is not a good combination financially the last time I checked. Throwing more capacity at less total revenue is not a sustainable strategy. DFW will take no solace in that type of "growth."

 

[WorldTraveler]

The part of this debate that frosts me is that the LCCs have argued for decades that they must have access to the nation's most restricted airports. The government agreed and LCCs gained access to LGA, ORD, JFK, DCA.... - as legacy carriers were forced to give up their long-developed positions. Now, the king of LCCs is now in the position of unlocking access to a potentially very powerful (and long-established powerhouse prior to DFW) airport where there is no realistic access for any other airline.

The Wright Amendment should be repealed on the basis of open and equal markets. But it should only be repealed if other carriers are given access to Love Field. If the City of Dallas will not expand DAL, then DAL should be relegated to a secondary backwater airport with very limited access to the rest of the country and vastly inflated prices for North Texas passengers.

However, if Wright remains, AA will still likely an LCC competitor at DFW. Potential competitors just want to know if they have to battle AA or AA and WN.

 

[WorldTraveler]

The part of this debate that frosts me is that the LCCs have argued for decades that they must have access to the nation's most restricted airports. The government agreed and LCCs gained access to LGA, ORD, JFK, DCA.... - as legacy carriers were forced to give up their long-developed positions. Now, the king of LCCs is now in the position of unlocking access to a potentially very powerful (and long-established powerhouse prior to DFW) airport where there is no realistic access for any other airline.

The Wright Amendment should be repealed on the basis of open and equal markets. But it should only be repealed if other carriers are given access to Love Field. If the City of Dallas will not expand DAL, then DAL should be relegated to a secondary backwater airport with very limited access to the rest of the country and vastly inflated prices for North Texas passengers.

However, if Wright remains, AA will still likely face an LCC competitor at DFW. Potential competitors just want to know if they have to battle AA or AA and WN.

 

[AirplaneFan]

But the city of Dallas should have told Southwest that it had a legal obligation with regards to DFW to shut the airport down and then follow through. Someone sure did have some good lawyers. When I worked at DFW, Fort Worth was upset because they felt that the city of Dallas backed out of the deal , while they upheld their end of the agreement and closed the airport in Fort Worth.

[post="271689"][/post]​

My memory is faulty on a few of the dates, but in 1969 all DAL carriers were told that they had to move over to the DFW airport. Since SW was not yet flying from DAL (thanks to Braniff lawsuits) it did not sign the agreement. SW started flying from DAL the next year. Then when all the other carriers moved over to DFW it left LUV alone at DAL. Ironically, it was the lawsuits filed by TI and Braniff that kept SW from signing the agreement to move over to DFW.

 

[eolesen]

As part of the master plan, the City of Dallas and Love Field agreed to let AA keep (and use) the three gates they had refurbished, and in return, AA paid for the demolition of the rest of the concourse. Southwest agreed to build (and pay for) a new cargo facility on the site of those demolished gates.

[post="273882"][/post]​

I'm fairly certain that the City has yet to amend the lease which allows AA to use the gates. Until then, they're not usable.

 

[LoneStarMike]

I'm fairly certain that the City has yet to amend the lease which allows AA to use the gates.  Until then, they're not usable.

[post="274290"][/post]​

The competition plan (pdf file) for Love Field mentions

By January 2002, at the completion of some interim reshuffling, Dallas anticipates that there will be 19 operational gates in the Main Terminal, as depicted on Exhibit B (Terminal Plan - January 2002). Southwest's gate usage will remain unchanged. The other 5 gates will be leased as follows:

Continental (2); American (2); and a sublease by American to ASA (1).

The operational Main Terminal gates are under preferential use leases with gate sharing provisions that can be invoked by the Director of Aviation.

I also remember AA putting out a press release in late August, 2001 saying that the gates were opening the following month somewhere around the 26th or so, but after 9/11 AA discontinued all DAL service and the gates were ultimately never used.

I don't think they would have issued that press release back then if their lease hadn't already been amended.

Edited to add

Also from this old thread at on Flyertalk:

American wants out of Love Field lease
Airline's gates were completed but never used after 9/11 attacks
06/25/2003
By CHRIS HEINBAUGH / WFAA-TV

American Airlines officials said Tuesday that the airline wants out of its lease at Dallas Love Field.

The move could allow the financially-troubled American to save several million dollars over the next few years.

Almost two years ago, American decided to ramp up service at the City of Dallas-owned airport, and signed a ten-year lease for three gates. The airline had made about $20 million in improvements, when everything stopped.
American had planned to begin using the renovated gates in late 2001, but then came the 9/11 attacks. The airline stopped all service out of Love Field, and the gates have never been used.

The article also stated:

In return for the city's agreement to terminate the lease, American will transfer all rights and interests in American's facility improvements to the city," the airline's letter said.

But, city officials said the lease already gives all that back ... to Love Field.
"Those improvements belong to the city anyway," Gwyn said. "You're giving us something we already own."

LoneStarMike

 

[LoneStarMike]

The data that you have linked is biased toward short-haul flying so the comparison to long-haul flying out of Love may not be as valid as you might think. The most recent DOT air fare report shows that AA is able to command a 20-30% premium over WN for markets greater than 1000 miles. (apologies - I don't have the link handy)

[post="273955"][/post]​

Due to DAL's location, there are quite a few cities within 1000 miles that Southwest could fly to nonstop (in addition to the 14 they already serve) if the Wright Amendment were repealed. SLC, PHX, TUS, MCI, STL, OMA, MDW, CMH, IND, SDF , BNA, TPA, JAX, and MCO are all within 1000 miles from DAL. In addition, they might finally offer n/s service between JAN, BHM, CRP, and HRL to DAL.

With the exception of SAN, LAX, OAK, and BWI (all over 1000 miles), I think most of Southwest's new service would be to the other cities I mentioned above, like PHX, MCI, STL, MDW, and BNA. In addition, these cities would probably have some one-stop service through existing Wright cities, say DAL-ABQ-PHX, for example. I think most of the over 1000 mile markets that Southwest chose to serve would be via 1 stop or via connection.

There are a lot of other markets (over 1000) miles that AA could compete for with nonstop service and enjoy it's premium, like SEA, PDX, SMF, SJC, SFO, LAX, SNA, ONT, SAN, LAS, MIA, RDU, DCA, LGA, IAD, JFK, BDL and BOS.

The other point worth noting is that a 44 percent decrease in average fares coupled with a 28 percent increase in traffic is not a good combination financially the last time I checked. Throwing more capacity at less total revenue is not a sustainable strategy. DFW will take no solace in that type of "growth."

[post="273955"][/post]​

AA may not take solace in that type of growth, but why should it matter to DFW? AA's the one who would be throwing more capacity at less revenue, not DFW. DFW would see more revenue. Additional flights would generate more revenue from landing fees. A 28% increase in passengers means a potential 28% increase in parking revenue and a potential 28% increase in sales revenue and a 28% increase in the number of PFC's collected and 28% more people actually getting off the plane at DFW and visiting the area and spending money, instead of merely passing through.

DFW just provides the faclities. It's up to the airline to operate the servce and make a profit. and if one airline can't provide such sevice at a profit, then someone else will come in who can if the market is there. And I believe the Dallas Ft. Worth Metroplex has the market.

LoneStarMike

 

[Connected1]

AA may not take solace in that type of growth, but why should it matter to DFW?

[post="274466"][/post]​

The key to my point was the word "sustainable." A temporary increase in flights will not be better in the long run for DFW.

 

[eolesen]

The key to my point was the word "sustainable." A temporary increase in flights will not be better in the long run for DFW.

[post="274531"][/post]​

It may be not be good for DFW, but to quote from "Office Space," is it good for the company? That's what really matters.

My opinion is that DFW is just too damn big for its own good. When DFW craps out, we lose a quarter to a third of the airline...

We manage to run out of both ORD and MDW just fine. Why should DAL be any different, aside from the fact that we made a corporate decision 30 years ago to abide by and fight for maintaining what was the law of the day?...