Wright Deal in Trouble

[WNrforlife]

Hutchison: Justice should avoid Wright debate

03:58 PM CDT on Tuesday, August 1, 2006

By ROBERT DODGE / The Dallas Morning News

WASHINGTON – Sen. Kay Bailey Hutchison sent a toughly worded letter Tuesday to Attorney General Al Gonzales, calling for the Justice Department to butt out of the Wright amendment debate.

The Texas Republican sent the letter a week after a memo written by the department’s Antitrust Division raised competition and antitrust issues about her legislation to repeal the 1979 law. The department’s memo circulated around Capitol Hill and helped foment concerns about the proposal.

“As a result of this unfortunate, unfair and very biased position regarding an important matter pending before Congress, the Department of Justice should recuse itself from further consideration of the Wright amendment legislation,â€￾ Ms. Hutchison wrote.

A Justice Department spokesman was not available for immediate comment.

Also Online
Read the letter Sen. Kay Bailey Hutchison sent to Attorney General Al Gonzales
Last week, a Justice spokeswoman indicated the comments were generated as part of a routine discussion with members of Congress.

“We have been discussing with Congress the pending legislation and whether there are better ways to reach the goal of maximizing competition, but the administration has not taken a position on the legislation,â€￾ Justice spokeswoman Gina Talamona said last week.

The Justice memo raised antitrust concerns about the proposal to cap the number of gates at Dallas Love Field at 20 and to tear down gates at the Legend terminal. The memo argued the restriction on gates would erase some of the cost breaks that travelers usually experience in markets that Southwest serves.

“More broadly, the cap on gates at Love Field affects every other airline that would otherwise be attracted to the new competitive opportunities at Love Field, including low-cost carriers, such as JetBlue, as well as other legacy carriers, such as US Air,â€￾ the memo said.

Lawmakers in the Senate and House have raised questions about the proposal’s 20-gate cap as well as a provision that would give all the signatories immunity from antitrust laws.

In an interview, Ms. Hutchison said she wrote the letter because the Justice memo did “untold damageâ€￾ to her efforts to win Senate approval of her bill to repeal the 1979 Wright amendment in eight years.

“It was a tough letter,â€￾ said Ms. Hutchison, saying Justice should recognize that the Department of Transportation has federal authority over airports.

She fired the letter off to Mr. Gonzales shortly before she met with Sen. Arlen Specter, R-Pa., chairman of the Senate Judiciary Committee, and Sen. John Cornyn, R-Texas, to discuss antitrust issues raised by the proposal.

After the meeting, Mr. Specter said he is against the flight restrictions imposed on Love Field by the Wright amendment. But he said the proposal does raise questions about antitrust concerns and has not decided whether to convene the Judiciary Committee to examine the issues.

Ms. Hutchison said the Justice memo used “inflammatory rhetoricâ€￾ intended to turn opinion against the June 15 agreement by the cities of Dallas and Fort Worth and the Dallas/Fort Worth International Airport, as well as American Airlines Inc. and Southwest Airlines Co.

“This analysis without substance is disturbing,â€￾ she wrote. “That type of language is neither objective, nor professional…â€￾

Ms. Hutchison said the Justice memo was “both factually and legally inaccurate, and is an uninformed opinion regarding a complex issue that has plagued North Texas for more than a quarter of a century.â€￾


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[jimntx]

Did anyone believe--especially you alleged free market mavens who have claimed all along that the Wright Amendment was restraint of trade, anti-trust, and the cause of ingrown toenail--did any of you really believe for a second that an agreement to allow SWA, but no other carrier, to fly anywhere in the U.S. from Love Field was going to pass muster.

I know quite well that AA would have had two gates there. Would any of you with a straight face say that CO and or AA could compete against SW with SW having 16 gates and the other two having two each? And, no you can't say they could compete from DFW--especially with the difference in landing fees between the two airports.

Well, I think you are going to reap what you (and us for that matter) have sown. In the end, all 32 gates are going to be opened at DAL, and JetBlue and Airtran and Frontier and the like are going to be flying from there. And, taxpayers in the DFW metro area are going to be picking up the tab for a giant, but underused regional airport.

I'm glad I'll be moving back to the Houston area next year.

 

[swflyer]

Did anyone believe--especially you alleged free market mavens who have claimed all along that the Wright Amendment was restraint of trade, anti-trust, and the cause of ingrown toenail--did any of you really believe for a second that an agreement to allow SWA, but no other carrier, to fly anywhere in the U.S. from Love Field was going to pass muster.

Jimmy, honey.....

First let me say, IMHO, that I don't for a minute believe I'm the only SWA employee that was let down by this agreement.

But seriously, do you want us to believe SWA created this in a vacuum?? <_<

YOUR AIRLINE and it's CHAIRMAN, as well as the leader of that "giant, but underused regional airport", are signatories on this mess.

Please be careful when posting those (AHEM) stones. :blink:

 

[jimntx]

Jimmy, honey.....

First let me say, IMHO, that I don't for a minute believe I'm the only SWA employee that was let down by this agreement.

But seriously, do you want us to believe SWA created this in a vacuum?? <_<

YOUR AIRLINE and it's CHAIRMAN, as well as the leader of that "giant, but underused regional airport", are signatories on this mess.

Please be careful when posting those (AHEM) stones. :blink:

I knew exactly what I was posting. When you learn to read past the first paragraph, maybe you'll see in the next paragraph the phrase, "and us for that matter."
I in no way exempt AMR from their part in the creation of this poster child for anti-trust, anti-competitive, back room deals.

But, everyone who thinks this is such a big friggin victory for SWA is going to be surprised when the end result is either what I predicted above or the closure of DAL. If we are going to have competition at DAL, let's have competition. All comers should be welcome.

 

[coolflyingfool]

Doesn't SWA have wording in the new current agreement that if it doesn't pass by NOV, that SWA is free to resume additional amendments such as Shelby and Bond. Before this agreement was reached, I belive Nebraska was close to getting their state added via some Bill and Tennesse was starting another push. IMO, if this current deal does not go down, you could see 4 or 5 more states find exemptions in the next 2 years. Everyone is now seeing how Missouri is getting even more flights and they also know how to attach their state to a big bill like Bond did. The states that could come in to the fold might be NE, TN, NV, AZ, and FL. just my thoughts..........

 

[mga707]

I in no way exempt AMR from their part in the creation of this poster child for anti-trust, anti-competitive, back room deals.

Well, one anti-trust, anti-competitive, back room deal (especially one concocted by a disgraced, crooked politician) deserves another....

 

[jimntx]

Well, one anti-trust, anti-competitive, back room deal (especially one concocted by a disgraced, crooked politician) deserves another....

A perfect example of why Americans have such rotten government. That blind party loyalty that says if one's favorite politician or party gets caught doing something unethical/illegal/take your pick, then rather than get rid of the wrongdoer, one must go back as far in history as necessary to find an example in the other party. And, actually accepting and believing that if one person did something wrong that somehow gives someone else a free ride on wrongdoing.

 

[mga707]

A perfect example of why Americans have such rotten government. That blind party loyalty that says if one's favorite politician or party gets caught doing something unethical/illegal/take your pick, then rather than get rid of the wrongdoer, one must go back as far in history as necessary to find an example in the other party. And, actually accepting and believing that if one person did something wrong that somehow gives someone else a free ride on wrongdoing.

Oh, lighten up! It was merely a lighthearted remark pointing out the political nature of the entire process. "Blind party loyalty"!!!! Geez....
FYI, I have NO party loyalty. Matter of fact, I HATE politics and (especially) the whole concept of political parties. I neither remember, nor care, which corrupt party Jim(?) Wright was in.
You really need to stop being so serious...none of this really matters!

But yes, I would like to see the whole stupid Wright thing go buh-bye. Merely for purely selfish reasons--I want to be able to fly from TUS to DAL without going through ABQ!
I HATE DFW!

 

[kevin7470]

As a long time SWA stockholder, I want this deal to die. Open up Love Field to all and let the market dictate how many gates should be used and who gets to fly where. The competition is good for consumers and ultimately the Dallas region. SWA should be able to compete just fine, fuel hedges or not.

 

[jimntx]

SWA should be able to compete just fine, fuel hedges or not.

Well, what I would hope is that DAL would be closed to commercial airlines. The region is not large enough to support two major airports.

However, that's probably not going to happen. I would agree with you SWA should be able to compete just fine, but then you would have to ask. Why are they working so very hard to keep everyone else--particularly the other LCCs--out of DAL?

 

[sfb]

I know quite well that AA would have had two gates there. Would any of you with a straight face say that CO and or AA could compete against SW with SW having 16 gates and the other two having two each? And, no you can't say they could compete from DFW--especially with the difference in landing fees between the two airports.

Well, I think you are going to reap what you (and us for that matter) have sown. In the end, all 32 gates are going to be opened at DAL, and JetBlue and Airtran and Frontier and the like are going to be flying from there. And, taxpayers in the DFW metro area are going to be picking up the tab for a giant, but underused regional airport.

Seriously? Can you actually claim with a straight face that Southwest is the party driving the 20-gate limitation proposed for DAL in the putative agreement? Or do you think that just perhaps Fort Worth, the DFW Airport Board, and AMR Corp. are the ones who want to see DAL's capacity capped? Why would Southwest go along with those sorts of restrictions? Perhaps in the interest of getting a deal done?

KBH has long been an opponent of Wright repeal (could the fact that her husband has done work for DFW Airport be related...). And yet, she is the one who brokered this deal. Do you think she was trying to protect Southwest or DFW/AA?

Southwest had been arguing for full repeal with no restrictions. Do you think that they'd protest if they were given just that instead of the deal that's on the table? They've proven to be happy to compete with Frontier from DEN, so why would they be scared of competition from DAL to DEN. Is it terribly likely that JetBlue would fly from DAL to anywhere other than JFK or BOS at this point? Would AirTran offer service from DAL to anywhere but ATL? Does anyone really want to get into a fight with Southwest in a market where they have an extremely loyal clientele?

I in no way exempt AMR from their part in the creation of this poster child for anti-trust, anti-competitive, back room deals.

But, everyone who thinks this is such a big friggin victory for SWA is going to be surprised when the end result is either what I predicted above or the closure of DAL. If we are going to have competition at DAL, let's have competition. All comers should be welcome.

Then give credit where credit is due. You can bet money that the proposed restrictions on DAL come straight from AMR and the DFW Airport Board. SWA bought into the deal because it resolves the issue for the medium term and opens up growth opportunities. I very strongly doubt they would object to simply repealing Wright with no conditions; after all, they publicly supported Hensarling's bill which proposed to do just that. It's sort of like paying taxes; most of us don't like doing it, but you accept it since you have no other choice.

Well, what I would hope is that DAL would be closed to commercial airlines. The region is not large enough to support two major airports.

Dallas-Fort Worth has a larger population base than Houston, which supports two major airports.

I don't really get this "fear of competition" argument which some folks seem to ascribe to Southwest. They went into PHL, PIT, BWI, and DEN against well-entrenched hub carriers. They built their two largest operations at PHX and LAS in spite of America West and its relatively low costs. They went toe-to-toe on the West Coast with United Shuttle and on the East Coast with Metrojet and Delta Express. They have battled with AA and CO (not to mention TI and BN) for decades in Texas. They competed for years with TWA at STL.

 

[jimntx]

Only a SWA cheerleader would spin giving SWA 80% of the gates at an airport as being to the advantage of another airline. Poor SWA! How will they survive?

And, the moves into PHL, PIT, BWI, and DEN were against a carrier in each city that was, or was soon to be, in bankruptcy.

 

[FlyUs]

Only a SWA cheerleader would spin giving SWA 80% of the gates at an airport as being to the advantage of another airline. Poor SWA! How will they survive?

And, the moves into PHL, PIT, BWI, and DEN were against a carrier in each city that was, or was soon to be, in bankruptcy.

What does bankruptcy have to do with anything? When WN moved into BWI, US was not even close to filing for chap 11..

 

[KCFlyer]

And, the moves into PHL, PIT, BWI, and DEN were against a carrier in each city that was, or was soon to be, in bankruptcy.

Was that Southwest's fault? Or was that a capitalistic market in operation?

 

[sfb]

Only a SWA cheerleader would spin giving SWA 80% of the gates at an airport as being to the advantage of another airline. Poor SWA! How will they survive?

The fact that Southwest would have 80% of the gates at DAL isn't what is advantageous to AA; the fact that Southwest would be essentially capped at 16 gates at DAL (compared to 100+ for AA at DFW) is why AA and DFW are pushing this stinker of a deal. AA also wants to make certain that jetBlue, Airtran, Frontier, etc. will be forced to compete from DFW instead of DAL, since AA has a strong competitive and operational advantage over any new entrants into DFW.

Southwest has the majority of gates at HOU, and yet somehow space has been found there for competitors like FL, YX, and B6. They will survive like they always do -- by being an effective competitor.

And, the moves into PHL, PIT, BWI, and DEN were against a carrier in each city that was, or was soon to be, in bankruptcy.

US Airways was nearly a decade away from its first bankruptcy filing when Southwest announced BWI. They saw a market opportunity in a hub city with a strong local market that was being de-emphasized by an inefficient competitor.

When Southwest announced PHL, US Airways had emerged from its first bankruptcy nearly seven months earlier. US had supposedly restructured itself to be competitive with the low-cost carriers invading its high-fare franchise markets. When PIT was announced, US had already chosen to dramatically scale back that hub to one-third or less of its previous capacity. And when DEN was chosen as a new city, United was reputed to be on the path to emerging from its bankruptcy reorganization as a more efficient competitor.