I guess no doesn't mean no for Delta

[HowardBorden]

It's called capitalism ladies and gentlemen! Delta had every opportunity to outbid SWA for those gates but they chose not to. Now SWA controls the gates through a sublease from United.



Delta Air Lines today detailed its many potential losses from revenue to customer satisfaction if it's not allowed to continue flying at Dallas Love Field.
"It's going to come down to our brand, our reputation, Joe Esposito, Delta's vice president of network planning for the Americas, said in federal court in Dallas. "There are two parts to the damage: What happens to the airline and what happens to the market. There won't be competition."
On their second day of a federal court hearing, Atlanta-based Delta and Dallas-based Southwest Airlines are fighting over whether Delta should keep flying at the city owned airport.
Delta operates five daily flights to Atlanta from Love Field using a gate under a licensing agreement with Southwest that was set to expire tomorrow. It can continue to fly there until U.S. District Court Judge Ed Kinkeade rules on the case. (Delta also flies out of Dallas/Fort Worth International Airport.)
Delta says the city of Dallas' policies require it to make room for the airline at Love Field. Southwest says its lease with the city of Dallas gives it "preferential use" of its gates.
Delta's current flying arrangement at Love Field is the third temporary agreement with an airline since October, when federal flying restrictions lifted there. Since then, Delta has been trying to gain a permanent foothold at the airport.
Esposito confirmed that Delta has gained 1,798 customers who shifted from flying out of D/FW Airport to Love Field, accounting for around $230 million in revenue a year.
"The flying public is going to have less options," Esposito said. If Delta can't fly out of Love Field, "we're going to have some pretty unhappy customers."
However, Southwest's lawyers repeatedly pointed out that Delta previously has shifted passengers without any problems from flights at Love Field to flights at D/FW Airport.
Delta officials yesterday said the airline sees D/FW Airport and Love Field as two separate markets. Today, Esposito said Delta cannot serve Dallas business, leisure and international customers from D/FW Airport.
For example, Delta created a map showing that 13 of 19 Fortune 500 companies in the Dallas-Fort Worth area are closer to Love Field than D/FW Airport.
Kinkeade said it looked like most of the Fortune 500 companies were located in Irving, which was about half way between the two airports. He asked why Delta didn't consider the largest employers in the area, not just the largest companies by revenue.
Delta also did a "gate plot" analysis fitting its five flights plus its plan to offer eight more flights into Love Field gates based on Southwest's published flight schedule, assuming at least 30 minutes of ground time between flights.
"We concluded there was plenty of space at Love Field," Esposito said. "It all fit."
However, he acknowledged that 10 slots did not provide enough ground time and where schedules would have to be tweaked.
Earlier this year, both Southwest and Delta vied to sublease two gates from United Airlines, which left Love Field, to expand their operations at the airport. Then, United talked with four airlines about its Love Field gates Delta, Southwest, Spirit Airlines and Virgin America, Kate Gebo, United's vice president for corporate real estate, said in videotaped testimony showed today by both Southwest and Delta.
Spirit wasn't interested and Southwest's offer ended up being better than Delta's or Virgin America's, she said.
Southwest revealed yesterday in court that it paid $120 million plus monthly rent to United to sublease the gates.
Delta claims the $120 million payment was "illegal."
United also offered a gate deal to Delta in September 2014 and Delta didn't want it, Gebo said.
When asked by a Delta lawyer, Southwest's vice president of airport affairs Bob Montgomery today said the airline did not tell the city of Dallas, the U.S. Department of Transportation or the Federal Aviation Administration about the $120 million payment.
"I didn't see it as illegal or against [the city's] competition plan or the lease," he said. "And I wasn't required to tell them."
However, Montgomery did tell the U.S. Department of Justice because it was required to under anti-trust laws.
"Would you agree this is about as sharp-elbow a deal as can be?" Kinkeade asked Montgomery. This is a pretty sophisticated deal."

 

[nimtz]

This board really needs a LUV Field Section. Stunning how we see all this blabbering given that 99% of us could not give two shats.

 

[Andy]

Approaching Thanksgiving and Delta's still using the gate with no ruling - which Delta says they'll appeal IF there's an adverse ruling. Looks like Delta will have flights to Love field through 2016 as a minimum. http://aviationblog.dallasnews.com/...ted-to-the-dallas-love-field-gate-fight.html/

 

[maru657]

As long as it keeps Southwest from having a no competition base with public support, it's all good.

 

[canyonblue]

As long as it keeps Southwest from having a no competition base with public support, it's all good.

Yeah, it's funny how we had no competition in Dallas for over 30 years and no one cared. Now every clown airline shows up and demands we should have competition. Where ya been all these years?

 

[hockeypilot44]

Yeah, it's funny how we had no competition in Dallas for over 30 years and no one cared. Now every clown airline shows up and demands we should have competition. Where ya been all these years?

Southwest started going into LGA/ATL/DEN/DCA/etc. Did Southwest really think it was going to encroach on the high value markets of other carriers and not have them do the same back?

 

[Flopgut]

Yeah, it's funny how we had no competition in Dallas for over 30 years and no one cared. Now every clown airline shows up and demands we should have competition. Where ya been all these years?

They want to cozy up to your operation. See if they too can perfect flying with giant shoes, a foam red nose, and a rainbow wig

Idea: Help them with the bucket/water/confetti trick, and I'll bet theyll help you write a functional etops program

 

[Andy]

Southwest started going into LGA/ATL/DEN/DCA/etc. Did Southwest really think it was going to encroach on the high value markets of other carriers and not have them do the same back?

Reading through this thread, apparently, yes.

It appears to me that the Judge has decided to make a ruling by not making a ruling. Either way, I expect Southwest to have to lease space to Delta indefinitely.

 

[HowardBorden]

Either way, I expect Southwest to have to lease space to Delta indefinitely.

That very well may be true, but I don't think Delta is going to like the price. If SWA paid $120 million for the lease of the gate, I can only assume they would be able to charge a lease fee commensurate with a pro-rated portion of that total bill.

 

[Andy]

That very well may be true, but I don't think Delta is going to like the price. If SWA paid $120 million for the lease of the gate, I can only assume they would be able to charge a lease fee commensurate with a pro-rated portion of that total bill.

You might be right but precedent has been something different. In the past (distant and recent), Southwest and other 'disadvantaged' airlines have been given legacy gates and slots for well below value by the government.

It's interesting to watch you and others use the exact same arguments that legacy pilots were using when their companies were forced to divest gates/slots to Southwest and others. Those arguments didn't work for us but they may work for Southwest - in which case, perhaps a clawback of gates/slots previously given to Southwest and others under duress should be reviewed?

By the way, I don't think that the disclosure that Southwest paid $120M for those gates went over very well with the judge.

 

[HowardBorden]

You might be right but precedent has been something different. In the past (distant and recent), Southwest and other 'disadvantaged' airlines have been given legacy gates and slots for well below value by the government.

It's interesting to watch you and others use the exact same arguments that legacy pilots were using when their companies were forced to divest gates/slots to Southwest and others. Those arguments didn't work for us but they may work for Southwest - in which case, perhaps a clawback of gates/slots previously given to Southwest and others under duress should be reviewed?

By the way, I don't think that the disclosure that Southwest paid $120M for those gates went over very well with the judge.

But Andy, the slots you speak of were parceled out by lottery, at no cost to the airlines!

Delta had the same opportunity to make offers for the gate in question, and did in fact make an offer. SWA outbid them. If SWA had to pay the amount they paid to secure the gate, it only seems that their sublease agreement would need to address the the price they paid to outbid Delta for the use of the gate in question.

 

[Andy]

But Andy, the slots you speak of were parceled out by lottery, at no cost to the airlines!

No, I'm not talking about the Dallas Love stuff. All of the other auctions that were rigged so that there was only Southwest and maybe a couple other bidders. Those airlines selling the gates/slots did NOT want to divest their slots to Southwest or any other carrier. But you know that; you're just choosing to ignore all of those other auctions.

Those gates/slots were worth significantly more than Southwest and others paid for them.

Delta had the same opportunity to make offers for the gate in question, and did in fact make an offer. SWA outbid them. If SWA had to pay the amount they paid to secure the gate, it only seems that their sublease agreement would need to address the the price they paid to outbid Delta for the use of the gate in question.

I really hope you get your wish and Southwest jacks up the rates into the stratosphere on the gate Delta's using. I'd love to see how regulatory authorities would respond.

 

[HowardBorden]

No, I'm not talking about the Dallas Love stuff. All of the other auctions that were rigged so that there was only Southwest and maybe a couple other bidders. Those airlines selling the gates/slots did NOT want to divest their slots to Southwest or any other carrier. But you know that; you're just choosing to ignore all of those other auctions.

I'm not talking about the Dallas Love stuff either. All the slots at every airport that is slot controlled were specifically granted to the airlines through a lottery process and the airlines paid zero dollars to get them. The commodity of slots were awarded originally free of charge.

If and when an airline decides to enter a merger or acquisition with another airline they absolutely know going in that regulatory agencies may require divestitures from the combined carrier if the combination presents monopolistic issues as decided by those regulatory bodies.

 

[Flopgut]

If and when an airline decides to enter a merger or acquisition with another airline they absolutely know going in that regulatory agencies may require divestitures from the combined carrier if the combination presents monopolistic issues as decided by those regulatory bodies.

Wonder what things would look like today if Love had been parceled out all those years ago... Instead of: everybody leave but SWA

http://www.marketwatch.com/story/airline-stocks-pulled-down-by-southwests-lowered-outlook-2015-12-08

Very intersting^^^^^^

 

[Andy]

I'm not talking about the Dallas Love stuff either. All the slots at every airport that is slot controlled were specifically granted to the airlines through a lottery process and the airlines paid zero dollars to get them. The commodity of slots were awarded originally free of charge.

If and when an airline decides to enter a merger or acquisition with another airline they absolutely know going in that regulatory agencies may require divestitures from the combined carrier if the combination presents monopolistic issues as decided by those regulatory bodies.

You mean something was once free and now worth $120 million? Sound familiar?

Not all legacy forced divestitures were due to mergers. AMR and United were forced to give up assets at ORD about a decade ago.

Feel free to rationalize this any way you like, it doesn't matter. The DOT's not going to allow Southwest a virtual monopoly at Love field; I don't care if they buy gates for $1 billion apiece.