American says it will build Love Field hub if Wright limits lifted
[size=-1]11:08 PM CST on Friday, February 18, 2005 [/size]
[size=-1]By ERIC TORBENSON and VIKAS BAJAJ / The Dallas Morning News [/size]
American Airlines says it stands ready to build a full-fledged hub at Dallas Love Field, shifting much of its operation from Dallas/Fort Worth International Airport, if flight restrictions are lifted from the city airport.
Such a move would harm the fragile finances of D/FW as well as American, airline officials said Friday, not to mention adding a lot of noise and traffic to the area around Love Field.
But Gerard Arpey, American's chairman and chief executive, said the world's largest carrier would have little choice but to split its North Texas operations to remain competitive in this market.
"Were the Wright amendment to be repealed, we would have to build an operation at Love Field because that's where the customers are going to want to go," he told the Dallas Morning News editorial board.
The remarks represent American's strongest public stance on how it would defend its North Texas business in the face of Southwest Airlines' effort to open Love Field to long-haul service.
American's three gates at Love Field aren't currently in use.
To create a hub schedule with connecting banks of flights, American would need many more gates to build a hub "as extensive as necessary to be competitive" with Southwest, Mr. Arpey said.
But splitting American's North Texas operations would hurt local travelers, he said, because D/FW would be a vastly less efficient hub if it had to compete against Love Field for passengers.
Mr. Arpey said he views Love Field's master plan, which limits expansion at the airport, as "invalid" without the Wright amendment in place.
Southwest and city officials said they disagreed with American's position.
"Mr. Arpey is incorrect that the master plan would be null and void if the Wright amendment is lifted," said Dallas Mayor Laura Miller.
Early protection
Congress passed the Wright amendment 25 years ago to protect a then-fledgling D/FW from competition from Love Field. It limits commercial flights with more than 56 seats from Love Field to the states bordering Texas. A later amendment added Kansas, Mississippi and Alabama.
In November, Southwest dropped its long-held neutrality on the law, setting in motion a wrenching regional debate about air service. The carrier now says the law is anti-competitive and inflates airfares in North Texas.
Southwest is actively lobbying Congress for changes to or repeal of the flight restrictions, while D/FW has made a major push to keep the rules in place.
For the most part, American has kept a low profile on the growing debate, letting D/FW officials do most of the public speaking. But the airline continues to lobby to keep the law intact.
The chances for changing the Wright law remain far from clear.
Some Tennessee lawmakers have pressed for repeal of the restrictions, hoping they'll get cheaper fares if Southwest offers service between Dallas and their state.
So far, the North Texas congressional delegation appears divided on the issue. Three of the region's eight House members, all from the Dallas side, say it's time to loosen or scrap the law.
A key member of the delegation, House energy and commerce Chairman Joe Barton, R-Ennis, who represents part of Fort Worth, supports keeping the Wright amendment in place.
Threat not new
An unrestricted Love Field would quickly explode with passengers, forcing American to divert planes and resources from D/FW, its largest hub, Mr. Arpey said.
It wasn't the first time that an American executive threatened to shift significant operations to Love Field from D/FW.
Faced with the prospect of Legend Airlines flying American's best customers from Love Field in the late 1990s, American's chairman at the time, Robert L. Crandall, said he would aggressively enter the city airport.
Mr. Arpey declined to say how many flights American would shift to Love Field. He said American's response would depend on what the competition did, including how other airlines serving D/FW might move operations to an unrestricted Love Field.
Much of American's argument is based on where its best North Texas customers live.
At the meeting, American officials presented a map showing their greatest concentration of frequent fliers living closer to Love Field than to D/FW.
"I think Southwest has a chart just like this, and if I had a downtown monopoly hub airport in a city like Dallas, I would try to get it just like they are," Mr. Arpey said. "If I had the option of a shorter drive time to an airport, I would take it."
A forever thing?
American officials say they signed off on the Love Field master plan with the assumption that the Wright amendment would stay in place forever.
Dallas owns the airport, and its master plan limits the number of gates to 32 and curbs total flights.
Ms. Miller said she would like to lower the maximum number of gates available to 24 to minimize the impact of any airline expansion at Love Field.
Southwest insists the master plan won't change if the Wright amendment is repealed.
"The master plan followed the prescribed process, it had [American's] input," said Bob Montgomery, vice president of properties for Southwest.
Since the Federal Aviation Administration approved the master plan, he said he doubted American would be able to change it.
"I have a thing on my wall that has American Airlines' signature on it," Mr. Montgomery said.
Dueling hubs
American's argument against changing the Wright amendment leans on what it believes would be the detrimental effects of dueling hub airports in North Texas.
For many of American's flights to make money, they require lots of connecting passengers at D/FW, where nearly two-thirds of its 53.2 million passengers changed planes last year.
The carrier will fly 819 daily flights from D/FW by this summer and is adding several international flights in concert with the opening of a new international-only terminal.
Had the airline known in 1998 that the Wright amendment might be altered, Mr. Arpey said, it would not have participated in the $2.7 billion capital improvement project that has created Terminal D and the SkyLink passenger shuttle system at D/FW.
D/FW officials said the Wright amendment has to stay to protect the multibillion-dollar investment in new facilities.
"When you begin to splinter a hub and divest it between two airports, you inevitably lead to the unwinding of everything that has led to this economic engine," said Kevin Cox, the airport's chief operating officer.
American's plans to expand aggressively at Love Field are no surprise to D/FW, where the airline pays three-quarters of the operating expenses.
"It's precisely what we would expect from them, unfortunately," Mr. Cox said.
Mr. Arpey said his carrier will continue to "educate" officials on their stance and dispel what he sees as "a lot of confusion" about Southwest's position.
"No injustice has been done to Southwest Airlines," he said. "In fact, I think [one] could argue just the opposite, that back in the 1970s they were given an advantage in their ability to stay at Love Field when everyone else was forced to go to D/FW."
E-mail [email protected]
_________________________
Good strategy on AA's part in my view but it won't lessen the desire of SWA to move forward with abolishing the WA. Arpey implies such a move is in defense of DFW operations but that in doing so it will hurt his efficiency. Some would argue then why do it? Cutting off one's nose to spite one's own face just leaves lots of scars IMHO, holding your ownself hostage & hoping someone will save you from yourself isn't a good strategy but Mr Arpey appears to want someone to save them from themselves.
Those same might argue use the strength of his hub at DFW to generate more customer loyalty through price, service, routing and if they do this then they can keep the pax they want & generate more. Can AA squeeze more efficiency to compete with an airport less than 1/4 it's own size? Folks will say this is an admission they can not. Economy to scale should mean something & efficiency should mean something but apparently decreasing one's efficiency makes more sense (diluting the product & splitting operations) than improving one's efficiency. AA is no paper-tiger and they have reasons for doing what they are doing, I applaud their courage to take on the fight. I wish them nothing but good luck and hope the traveling public sees a long-term benefit through open & free competition...something that doesn't occur at the present time. Southwest has never wanted anything but an even playing field(s), DFW & Love. Southwest decided not to play on DFW's field, AA now appears to want to play on Love's Field...so be it...let the games begin I say
!
I believe the trap was set & AA has stepped into it....be careful what one asks for, one may get it Mr Arpey....Southwest will welcome the competition and hopes the passengers of N Texas will see the benefit from it....the WA needs to be abolished, period, dot!!!!
To the folks who are looking for employment, I believe the sooner government gets out of the business of regulating air travel (even if it results in lower wages) the more folks will be able to return doing what they love to do, fly airplanes...I wish you all the best & a quick return to the cockpit of your choice!!!
[size=-1]11:08 PM CST on Friday, February 18, 2005 [/size]
[size=-1]By ERIC TORBENSON and VIKAS BAJAJ / The Dallas Morning News [/size]
American Airlines says it stands ready to build a full-fledged hub at Dallas Love Field, shifting much of its operation from Dallas/Fort Worth International Airport, if flight restrictions are lifted from the city airport.
Such a move would harm the fragile finances of D/FW as well as American, airline officials said Friday, not to mention adding a lot of noise and traffic to the area around Love Field.
But Gerard Arpey, American's chairman and chief executive, said the world's largest carrier would have little choice but to split its North Texas operations to remain competitive in this market.
"Were the Wright amendment to be repealed, we would have to build an operation at Love Field because that's where the customers are going to want to go," he told the Dallas Morning News editorial board.
The remarks represent American's strongest public stance on how it would defend its North Texas business in the face of Southwest Airlines' effort to open Love Field to long-haul service.
American's three gates at Love Field aren't currently in use.
To create a hub schedule with connecting banks of flights, American would need many more gates to build a hub "as extensive as necessary to be competitive" with Southwest, Mr. Arpey said.
But splitting American's North Texas operations would hurt local travelers, he said, because D/FW would be a vastly less efficient hub if it had to compete against Love Field for passengers.
Mr. Arpey said he views Love Field's master plan, which limits expansion at the airport, as "invalid" without the Wright amendment in place.
Southwest and city officials said they disagreed with American's position.
"Mr. Arpey is incorrect that the master plan would be null and void if the Wright amendment is lifted," said Dallas Mayor Laura Miller.
Early protection
Congress passed the Wright amendment 25 years ago to protect a then-fledgling D/FW from competition from Love Field. It limits commercial flights with more than 56 seats from Love Field to the states bordering Texas. A later amendment added Kansas, Mississippi and Alabama.
In November, Southwest dropped its long-held neutrality on the law, setting in motion a wrenching regional debate about air service. The carrier now says the law is anti-competitive and inflates airfares in North Texas.
Southwest is actively lobbying Congress for changes to or repeal of the flight restrictions, while D/FW has made a major push to keep the rules in place.
For the most part, American has kept a low profile on the growing debate, letting D/FW officials do most of the public speaking. But the airline continues to lobby to keep the law intact.
The chances for changing the Wright law remain far from clear.
Some Tennessee lawmakers have pressed for repeal of the restrictions, hoping they'll get cheaper fares if Southwest offers service between Dallas and their state.
So far, the North Texas congressional delegation appears divided on the issue. Three of the region's eight House members, all from the Dallas side, say it's time to loosen or scrap the law.
A key member of the delegation, House energy and commerce Chairman Joe Barton, R-Ennis, who represents part of Fort Worth, supports keeping the Wright amendment in place.
Threat not new
An unrestricted Love Field would quickly explode with passengers, forcing American to divert planes and resources from D/FW, its largest hub, Mr. Arpey said.
It wasn't the first time that an American executive threatened to shift significant operations to Love Field from D/FW.
Faced with the prospect of Legend Airlines flying American's best customers from Love Field in the late 1990s, American's chairman at the time, Robert L. Crandall, said he would aggressively enter the city airport.
Mr. Arpey declined to say how many flights American would shift to Love Field. He said American's response would depend on what the competition did, including how other airlines serving D/FW might move operations to an unrestricted Love Field.
Much of American's argument is based on where its best North Texas customers live.
At the meeting, American officials presented a map showing their greatest concentration of frequent fliers living closer to Love Field than to D/FW.
"I think Southwest has a chart just like this, and if I had a downtown monopoly hub airport in a city like Dallas, I would try to get it just like they are," Mr. Arpey said. "If I had the option of a shorter drive time to an airport, I would take it."
A forever thing?
American officials say they signed off on the Love Field master plan with the assumption that the Wright amendment would stay in place forever.
Dallas owns the airport, and its master plan limits the number of gates to 32 and curbs total flights.
Ms. Miller said she would like to lower the maximum number of gates available to 24 to minimize the impact of any airline expansion at Love Field.
Southwest insists the master plan won't change if the Wright amendment is repealed.
"The master plan followed the prescribed process, it had [American's] input," said Bob Montgomery, vice president of properties for Southwest.
Since the Federal Aviation Administration approved the master plan, he said he doubted American would be able to change it.
"I have a thing on my wall that has American Airlines' signature on it," Mr. Montgomery said.
Dueling hubs
American's argument against changing the Wright amendment leans on what it believes would be the detrimental effects of dueling hub airports in North Texas.
For many of American's flights to make money, they require lots of connecting passengers at D/FW, where nearly two-thirds of its 53.2 million passengers changed planes last year.
The carrier will fly 819 daily flights from D/FW by this summer and is adding several international flights in concert with the opening of a new international-only terminal.
Had the airline known in 1998 that the Wright amendment might be altered, Mr. Arpey said, it would not have participated in the $2.7 billion capital improvement project that has created Terminal D and the SkyLink passenger shuttle system at D/FW.
D/FW officials said the Wright amendment has to stay to protect the multibillion-dollar investment in new facilities.
"When you begin to splinter a hub and divest it between two airports, you inevitably lead to the unwinding of everything that has led to this economic engine," said Kevin Cox, the airport's chief operating officer.
American's plans to expand aggressively at Love Field are no surprise to D/FW, where the airline pays three-quarters of the operating expenses.
"It's precisely what we would expect from them, unfortunately," Mr. Cox said.
Mr. Arpey said his carrier will continue to "educate" officials on their stance and dispel what he sees as "a lot of confusion" about Southwest's position.
"No injustice has been done to Southwest Airlines," he said. "In fact, I think [one] could argue just the opposite, that back in the 1970s they were given an advantage in their ability to stay at Love Field when everyone else was forced to go to D/FW."
E-mail [email protected]
_________________________
Good strategy on AA's part in my view but it won't lessen the desire of SWA to move forward with abolishing the WA. Arpey implies such a move is in defense of DFW operations but that in doing so it will hurt his efficiency. Some would argue then why do it? Cutting off one's nose to spite one's own face just leaves lots of scars IMHO, holding your ownself hostage & hoping someone will save you from yourself isn't a good strategy but Mr Arpey appears to want someone to save them from themselves.
Those same might argue use the strength of his hub at DFW to generate more customer loyalty through price, service, routing and if they do this then they can keep the pax they want & generate more. Can AA squeeze more efficiency to compete with an airport less than 1/4 it's own size? Folks will say this is an admission they can not. Economy to scale should mean something & efficiency should mean something but apparently decreasing one's efficiency makes more sense (diluting the product & splitting operations) than improving one's efficiency. AA is no paper-tiger and they have reasons for doing what they are doing, I applaud their courage to take on the fight. I wish them nothing but good luck and hope the traveling public sees a long-term benefit through open & free competition...something that doesn't occur at the present time. Southwest has never wanted anything but an even playing field(s), DFW & Love. Southwest decided not to play on DFW's field, AA now appears to want to play on Love's Field...so be it...let the games begin I say
! I believe the trap was set & AA has stepped into it....be careful what one asks for, one may get it Mr Arpey....Southwest will welcome the competition and hopes the passengers of N Texas will see the benefit from it....the WA needs to be abolished, period, dot!!!!
To the folks who are looking for employment, I believe the sooner government gets out of the business of regulating air travel (even if it results in lower wages) the more folks will be able to return doing what they love to do, fly airplanes...I wish you all the best & a quick return to the cockpit of your choice!!!
Last edited:
TC
