Kelliher's Strategy for Repeal of the WA

[chase]

Kelleher reveals strategy



[size=+1]Proposal to lift limits at Love, Reagan National draws fire from D/FW
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[size=-1]12:14 AM CDT on Friday, April 22, 2005 [/size]

[size=-1]By ROBERT DODGE / The Dallas Morning News [/size]

WASHINGTON – Southwest Airlines Co. chairman Herb Kelleher outlined a strategy Thursday that could help build political support for repealing the Wright amendment.

The founder of the discount carrier said removing geographic flight restrictions at Dallas Love Field could be combined with a similar move at Ronald Reagan Washington National Airport in Washington, D.C.

Speaking to reporters at a U.S. Chamber of Commerce aviation conference, Mr. Kelleher also said he would be amenable to an incremental phaseout of the Love Field limits. Although he didn't have a specific timetable, Mr. Kelleher said the federal law could be eased over time by gradually allowing routes between Love Field and additional cities.

"We are totally open to how you approach it," Mr. Kelleher said.

The 1979 Wright law was written to protect Dallas/Fort Worth International Airport by limiting standard commercial jets flying to and from Love Field to Texas' adjoining states. The law was later amended to allow flights between Love Field and Mississippi, Kansas and Alabama.

Southwest officials rekindled the Wright debate last year when they broke their long-held neutrality on the rules and called for their repeal.

Mr. Kelleher's remarks marked the first time a Southwest official has described a legislative strategy that might encompass both a phaseout of the Wright amendment and tying it to lifting restrictions at Reagan National.

His comments came just days after Sen. John Ensign, R-Nev., revealed in an interview that he is working on legislation to repeal the amendment.

Texas' two Republican senators have been cool to the idea of changing the Wright amendment, voicing support for continuing to protect D/FW Airport.

But in a statement Thursday, Sen. Kay Bailey Hutchison said she will "carefully consider what Mr. Kelleher is suggesting," adding she also would want to know if the proposal is "feasible at this time, given the potential impact on surrounding airports and communities."

Sen. John Cornyn did not have a response to Mr. Kelleher's proposals.

Mr. Kelleher's phaseout proposal drew sharp criticism from officials at D/FW Airport.

Jeff Fegan, D/FW Airport's chief executive, said the suggestion of a phaseout shows there is no immediate need to repeal the Wright amendment.

"The whole issue of this repeal is an attempt to scare off competition at D/FW so they can maintain their Love Field monopoly," Mr. Fegan said. "We would not be interested in a phaseout."

American Airlines Inc. spokesman Tim Wagner also said phasing out the Wright amendment does not make the idea more acceptable to his airline.

"It would not make any difference to us," Mr. Wagner said. "Mr. Kelleher's statement does not change what we are doing at all."

As part of a phaseout, Mr. Kelleher said, he would first like to eliminate restrictions that prohibit Love Field passengers from making connecting flights to reach destinations throughout the country. Currently, passengers wanting to travel beyond the nearby states must purchase two tickets and change flights.

"The first thing that should go is the most crazy, exotic, quirky restrictions on passenger air transportation that ever existed in the history of the United States," Mr. Kelleher said.



Link to Reagan National


Including a repeal of the geographic perimeter at Reagan National could help broaden political support for eliminating the Wright amendment.

"At principle, the same things are at work," Mr. Kelleher said. "It seems to me there might be some synergy there."

Mr. Fegan said tying Love Field and Reagan National together was a diversionary move.

"It is a tactic that Southwest wants to use instead of dealing straight on with the merits, and that is unfortunate," he said.

Currently, nonstop flights are permitted only to airports within 1,250 miles of Reagan National, which includes D/FW Airport. Congress has granted exemptions, allowing limited nonstop flights to Denver, Las Vegas, Los Angeles, Phoenix, Salt Lake City and Seattle.

The restrictions are designed to control traffic at the limited-capacity but popular airport. Aviation experts said lawmakers from Western states might support a repeal of the Wright amendment if the proposal also lifted restrictions at Reagan National.

Among those might be Sen. John McCain, R-Ariz., who sits on the Senate Commerce, Science and Transportation Committee, which has jurisdiction over aviation. He has been a long-time critic of the geographic restrictions at Reagan National.

Mr. McCain said this week that he has "always been deregulatory," and then added: "I would rather see the whole perimeter rule lifted."

Through a spokesman, Mr. Ensign, declined to comment Thursday.



Question of strategy


Lawmakers pushing for a repeal of the Wright amendment eventually will have to decide on a legislative strategy.

In addition to a Reagan National provision, they also will have to decide whether to push their proposal this year or in 2006.

Some legislative experts say it would be best to wait until next year, given that Congress is dealing with weighty issues such as restructuring Social Security.

There also is aviation legislation coming up for reauthorization next year, which would provide a logical home for repealing the Wright amendment.

 

[lowecur]

The flavor of the week

Southwest will find that reinventing it's strategy on a quarterly basis will be the norm for the next few years. The Wrong Amendment is on the front burner now that the East Coast is not looking too healthy. From the CC with comments from Holly Hegeman & The Twit:


For the quarter the airline saw PRASM up 1.3% while yield declined about 1%. CASM was down 1.5% to 7.70 cents, while CASM ex-fuel came in at 6.32 cents. For the quarter, the airline saw RPMs up 12.3% while ASMs were up 10.1%. This produced a rather underwhelming 1% increase in load factor. Gary Kelly admitted, in response to a question from Jamie Baker, that the airline was seeing "pressure" in both the Manchester/Boston market (also Providence for Southwest) and at BWI. Kelly also admitted that while demand "seems" to be improving, it is not doing so across the board. He cited the East Coast in particular. Sounds like Jetblue is stealing lots of business in Boston, and the PHL thing is cannibalizing BWI. Wait until Jetblue heads into Islip in the next 8 months.

Next Q has weak April bookings that will be fueled by a 13% increase in capacity. IMO the bloom will come off the rose for Mr. Kelly in 2006 as the present Sect 6 pilot contract talks will begin to turn adversarial as LUV will undoubtedly ask for concessions. Concessions in line with the industry will be necessary as LUV will also be faced with higher fuel bills of $300-500M, $605M in debt maturities, and a backloaded FA contract will begin to hurt profits in 2007.

They based much of their revenue projections and growth on a UAIR failure. If this doesn't materialize in the near future, LUV will need to re-examine their focus, again.

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[Dangerkitty]

......

 

[N1atEcon]

LowerIQ! Please help us in remembering the last time you and your Mrs Cleo predictions were correct. (It sure wasn't MDW) You need to go clean off the cyrstal ball because, once again, it is too cloudy for you to see.
The vote is going out. The company and the Union want to defer the section 6. Will it pass the vote? you bet your A$$. From the mouth of the insurance world another goof:
" IMO the bloom will come off the rose for Mr. Kelly in 2006 as the present Sect 6 pilot contract talks will begin to turn adversarial as LUV will undoubtedly ask for concessions."

 

[Indapool]

Lowecur...more proof that crack is BAD

And who the he!! is Kelliher

IMO the bloom will come off the rose for Mr. Kelly in 2006 as the present Sect 6 pilot contract talks will begin to turn adversarial as LUV will undoubtedly ask for concessions."

If the talk become "adversarial" it won't be until early 2007....So the birdies tell me.

 

[flyingitalian]

IMO the bloom will come off the rose for Mr. Kelly in 2006 as the present Sect 6 pilot contract talks will begin to turn adversarial as LUV will undoubtedly ask for concessions.


Wow one statement of opionion and both wrong. The pilots have in fact agreed to postpone negotiations until at least April 2006, and have received agreement that the scheduled September RAISES will happen. Stick to insurace, at least I hope you are better at predicting the future there.

 

[TrumanSparks]

Lower and others,

The pilots and SWA have decided not to open the section 6 until at least April 06. We have not or will not vote to extend the current contract for sometime (if ever). I personally feel that we will open the negotiations by summer of 2006. As far as the comment about the talks becoming adversarial, well this, and just about everything else you post, proves how little you know about what is going on at SWA. Don't judge the SWA pilots negotiations by the way other work groups have negotiated in the past.



Oh, by the way I’m still looking for the order.

 

[lowecur]

I fell asleep reading all the replys

Why postpone section 6 if everything is going great? I'll tell you why, mgt is willing to keep the status quo until they have a better handle on where they are going to put all the excess capacity they will be generating. Gary hopes that either UAIR or UAL will be history in the next 12 months, and that will solve his problem of where to put all the new planes. A worst case scenerio would be a reduction of capacity through consolidation. If it's consolidation then there will be an orderly reduction in capacity and most of the other LCCs will then be able to compete for routes and gate space as it becomes available. Could you work without a contract? The FA's did for 2 years, but SWA was making money on operations back then.

2006 could bring consolidation only, and if that happens then SWA will be unable to offset an annual loss on operations with fuel hedging......hence concessions.

 

[FLB717]

The Snake (Lowiq) has spoken, so be-ith say he.

 

[N1atEcon]

Why postpone section 6 if everything is going great?

No one said things are going great. We the employee's of SW are very well aware of the state of the industry. If we had our blinders on we would ask for a sec 6. The company and the union feel now is not the time. I know your getting your jollies trying to start the "SW pilots concessions are coming" flame bait. The problem for you is we have our finger on the pulse and you don't. We are employee's, we see the data, we see the loads, we are fighting to save every penny. You are answering your phone and giving out rates to insure an 18 year old in grandpa's old 1987 Buick.