Southwest Airlines' Executive Chairman Herb Kelleher Testifies at Senate Subcommittee

[sf260pilot]

The people who are pro-Wright Amendment......DFW, Ft. Worth, etc. are using the argument that DFW airport will suffer from repeal, and that the cities had a deal back in 1968. They keep stating this but yet they do not make their case very well. They sound like a bunch of little kids who keep saying,"that's not fair". The way in which Jim Wright got this federal law amended with out any hearing is what was not fair. It is hard for me to have any sympathy for DFW airport and Ft. Worth, Their argument continues that Ft. Worth tore thier airport down. They had too, it was too close to DFW. The last time I checked Meacham was still in operation, and I don't recall anyone crying foul when Mesa started commercial service from Ft. Worth. The pro-Wright faction needs to do a better job of making their case. Herb and SWA have maintained that this is good for consumers not just them while everyone else including American is afraid that it will hur them. Almost as if they don't care one bit about airfares in the metroplex.

 

[N7167L]

I have watched all three web presentations from the recent Hearings. (thanks Chase)

One point (of the many) I found compelling was Dr. Campbell’s testimony; (and I Para-phrase) - Why isn’t AA jumping up and down telling us “how bad” things are over at ORD/MDW and MIA/FLL, airport pairs where they already compete with WN!? This was a very good point!


The fact is, they, like WN, will enjoy greater customer demands; not less. (as the facts have shown) SF260Pilot said it best: AA needs to do a much better job at defending/presenting their (so-called) case.


The positive momentum continue to builds for WN; it is only a matter of time, before the Wright Admen. is totally repealed.

 

[chase]

Editorial from New Hampshire Newspaper

An editorial from Southwest's friends in New Hamsphire...thanks from your friends in Dallas.

Granite Staters should be free to fly to Dallas​

The Union Leader November 10, 2005
Granite Staters should be free to fly to Dallas
By KEVIN DILLON


This morning at 10 the U.S. Senate Commerce, Science and Transportation Committee's Subcommittee on Aviation will conduct a hearing in Washington, D.C., to discuss the future of the Wright Amendment, an antiquated, restrictive and unnecessary anti-free trade law enacted by the federal government in 1979 that prohibits Southwest Airlines from providing flights beyond the four states surrounding Texas from its corporate headquarters at Love Field (DAL) in Dallas, Texas.

Many Southwest Airlines cities across the country are uniting in support of eliminating the Wright Amendment with the hopes of increasing convenient one-stop service opportunities for their air travelers and possibly the addition of new nonstop service to Dallas in the future. Manchester has joined the fight.

Wright is wrong, and here's why.

The Wright Amendment has served its purpose. When Dallas and Fort Worth, Texas, began planning to build a massive new airport, Dallas/Ft. Worth International Airport (DFW), there was great concern that airlines would be reluctant to leave the far more convenient Dallas Love Field (DAL) and move further away from the city to DFW. American Airlines finally agreed to move its operations to DFW in exchange for a federal law that prevented any airline from flying out of Dallas Love Field to anywhere outside the states bordering Texas.

Twenty-six years later, DFW has become the fourth busiest airport in the country, serving more than 56 million passengers a year. Employing the "secondary airport philosophy" that has made them (and Manchester Airport) so successful, Southwest doesn't operate out of DFW, but chooses to operate out of DAL to keep its costs (and costs to passengers) low.

The Wright Amendment restricts "free trade," is anti-competition and affects air service at Manchester Airport. Southwest Airlines is Manchester Airport's largest air carrier, offering 30 daily departures and providing service to more than 1.6 million passengers each year.

Unfortunately, Southwest is not permitted to offer non-stop, or even convenient one-stop, service to Dallas from Manchester Airport because of this antiquated, restrictive and unnecessary law. The airline isn't even allowed to advertise the availability of flights from DAL to destinations outside the scope of the federal law. Historically, Dallas is a very popular destination for New Hampshire air travelers and among our top destinations.

The aviation industry has changed dramatically in the past quarter century. Low cost airlines now carry over 30 percent of all commercial passengers in the United States. Bankruptcies, consolidations and mergers among the nation's airlines are increasing as they all fight for survival. It's time to level the playing field among all airlines and repeal this antiquated anti-competition, anti-free trade law. It's the "RIGHT" thing to do. Kevin Dillon is director of Manchester Airport.

 

[Hamburgler]

Chase, I see what you're saying, sorry if my first post was confusing - I just meant that SWA has not met the fate of other airlines recently with bankruptcy, etc. on the contrary, it road this recession out with flying colors - so it's not like they're in a precarious position and couldn't go up against a big dog like they have at other hub airports...

The thing that really struck me about the hearing was the person who read stats on what opening up Love Field would do to the economy of DFW - something like 200 fewer flights a day, 10s of millions of dollars lost, it would basically set the airport back 20 years. That and the person who said competition between *airlines* is good for the consumer (cheap tickets, etc), competition between *airports* is not. I don't think people fully understand the economic ramifications repealing Wright would have on DFW and the surrounding area...

(Hope you all had a good weekend, I was off the grid, so I'm just coming back to this now!

 

[N1kawotg]

Every one has a study that fits their agenda. As for DFW losing 200 flights a day. Herb said it best by showing stats at the other cities. AA said the same thing about the sky is faling when SWA started into Midway. They said the smaller markets would sufferr and they would have to pull service from them. What actually happened-- tremendous growth at both.

A deal is a deal defense is like Nanny Nanny Boo Boo. Nothing is in writing. And if a deal truly was a deal, why isn't Delta being held liable for all those gates they left. Make them come back -a deal is a deal. If these gates weren't opened it would be tough to defend AA's position. But I know it was a financial decision for Delta as it is for SWA and AA. So who can blame any of them.

 

[SWA/FO]

We all can blame AA...

 

[chase]

Hamburgler,

Thanks for the respectful reply....there are many sides to the issue. Dr Campbell (2nd panel, president of the company that did the study for SWA) addressed your concern & the "assumption" that Eclat uses as one of their basic economic assumptions; AA will move large number of flights over to Love.

As Dr Campbell stated, AA nor United took that approach in Chicago as MDW increased in size....MDW has less than 10 flts a day out of MDW & hundreds out of ORD....they haven't shifted flights to MDW & the consumer has saved money as fares at ORD have decreased....the same thing happened in MIA when FLL & PBI started to grow....flts in MIA increased (I believe) & fares have decreased....they are flying fro FLL but no wholesale shifting of assets, at least as far as Dr Campbell could see.

The threat to move aircraft is very different than actually doing it. I can't find the quote but I remember nearly one year ago when this battle began Arpey came out & made the comment that (I'm paraphrasing)...."We'll go to Love to compete, of course we'll lose money doing it but we 'have' to do it."
A rather revealing comment since they haven't done that in the past & he said at the time (again my apologies for not having the quote) that business decision would result in losing money...what leader would make a decision that knowingly loses money? He won't...he is too smart. AA can cmpete from AA & have lower fares & keep & even increase passengers.....can anyone say "Ft Worth"? These folks fly also....they make it sound like only Dallasites use airplanes....Ft Worth will benefit by having cheaper fares & yey they won't have to drive all the way to Dallas. There is no incentive for the carrier that controls 84% of the paxs out of DFW to lower fares....they will have it now if the WA goes away.

I respect your view & if job lose was inevitable, I"d be concerned....however, the other variable is the fact that other carriers maybe willing to come to DFW & compete....other LCC or regionals if AA closes the market....if there is money to be made on these smaller routes (Eagle does quite well...the best RASM of regionals out there) other carriers will fill that voide, no doubt...no one walks away from easy money.

Thanks again & I look forward to continued debate.

 

[sf260pilot]

AA will want to change the Love Field Master Plan

Just wait, If the WA does go away I'll bet that either one of two things will happen.
1. AA does nothing and the Southwest effect is better than anticipated.
2. AA needs more flights at Love and tries to change the Master Plan.

There are only 7 or so gates at Love field that SWA does not have options on. (6 more at the old legend term on lemmon) The Airport is capped at so many flights per day....right now they are well below that number. If the WA is gone then SWA will ramp up their effort and fly many more flights from many more gates. It will take AA and Continental some time to set up shop. AA will not be able to "move a significant amount of flying" from DFW to Love Field without changing the Master Plan, which by the way IS a local issue. Gerard Arpey said it in the hearing many times, he doesn't want the WA to go away ever, and he commented on the master plan a couple of times because it would at that point limit competition at Love.

 

[Hamburgler]

Hi all,

I feel like these arguments get rehashed about once a week! But, nice to see this one hasn't devolved into any tit for tat nonsense yet!

I'm for DFW on this one, simply because I think SWA dodged a bullet back in the day when they, as a new intrastate carrier, didn't have to move to DFW. They know what they signed up for. Now we change the rules...why? Airlines moved to DFW because the community agreed that supporting one airport and its economy was most beneficial. All SWA has to do is take a pretty sweet deal from DFW (which has also become more effcient of late with longer runways, hold pads, etc), and it can keep running short haul from Love.

What I think is funny is that a majority of citizens, " want the Wright Amendment repealed" and a majority of citizens also "want SWA to fly out of DFW"... !

 

[sf260pilot]

Hi all,

I feel like these arguments get rehashed about once a week! But, nice to see this one hasn't devolved into any tit for tat nonsense yet!

I'm for DFW on this one, simply because I think SWA dodged a bullet back in the day when they, as a new intrastate carrier, didn't have to move to DFW. They know what they signed up for. Now we change the rules...why? Airlines moved to DFW because the community agreed that supporting one airport and its economy was most beneficial. All SWA has to do is take a pretty sweet deal from DFW (which has also become more effcient of late with longer runways, hold pads, etc), and it can keep running short haul from Love.

What I think is funny is that a majority of citizens, " want the Wright Amendment repealed" and a majority of citizens also "want SWA to fly out of DFW"... !

So now you are going to get this thread about the hearings going back down the tit for tat road with your misguided view that SWA can not grow at their home base airport because of an outdated law which has helped DFW and AA grow beyond expectations.

 

[mdf]

I don't know why I bother, but here goes. For people who live in a free country there is no logical, I repeat no logical argument for the Wright Ammendment!:smash:

 

[Snoopy58]

Gotta comment on the "majority of citizens want SWA to fly out of DFW" line.

First, those numbers come from surveys taken at DFW by people already physically there to fly. Not couched as "do you favor repealing Wright or SWA coming here," but simply "would you like to see SWA at DFW?" Well, in the absence of any reason for the average Joe to say "no," since it wouldn't seem to cost him anything, everyone who doesn't recognize this as a Wright argument is disguise is strongly prone to say, well, sure, why not, seems good to me. A more honest question would be, "would you prefer to fly longhauls on SWA from Love Field, or from DFW?"

Second, it's a pointless question. There are bills in both houses of Congress to repeal the Wright Amendment. There is no plan on the table anywhere that would force SWA to operate out of DFW. A couple of loonytoon legislators propose to shut down SWA at Love Field (and they're receiving exactly zero serious attention in Congress), but even that wouldn't force them to DFW, and "Would you like SWA to fly out of DFW" is NOT the same question as "Would you like to see SWA shut down at Love Field," and the results would be vastly different if the question were phrased that way.

Repealing Wright is a decision before Congress. Southwest operating out of DFW has been considered by Southwest & rejected, and they're the ones with the (well-established) right to make that decision. Trying to reject a bill before Congress because people seem to (also) like an idea that's not under consideration and won't happen (even if Wright remains) is pretty flawed logic.

The reporter at the Dallas News who writes on SWA & DFW & North Texas commercial aviation has said that if it were put to a vote, 85% of North Texans would vote to repeal Wright. Why? Lower fares, plain & simple.

"Would you like to see SWA flying out of DFW?" is about as relevant as asking "Would you like to inherit a million dollars?" when nobody you know has that kind of money.

 

[sf260pilot]

I think that if Eddie Bernice Johnson and the Moron from Tulsa got their way, and shut down Love field to "All Commercial Traffic" that SWA might just leave and wait for Dallas and Ft. Worth to come begging for the service that they used to have. This won't happen of course, but, SWA or WN, if you are so inclined, really feel that this is based on Free Market Economies, Free Trade, and basic American Values. I have had many retired AA pilots make this arguement for me. What Jim Wright did back in the late 70's was for all pratical purposes, with regards to business in the USA, illegal.
This is all Braniffs fault. They refused to move to Greater Southwest in the 60's and Ft. Worths own Jim Wright made sure that another Dallas based airline would not screw it up again. I have lived in both Ft. Worth as well as Dallas and I have one thing to say about this little rivalry. Dallas seems to love what Ft. Worth has to offer, Museums, Art, The Stockyards, Joe T's , and a downtown area that they want in Dallas. People in Ft. Worth really have a huge chip on their shoulder about being in the shadow of Dallas. Amon Carter is the reason. The terminal at GSW was called Amon Carter Field. YaDaYaDaYaDa!.......

 

[Hamburgler]

I agree that stats can be skewed any way you want them to be - and that people in a lot of polls either a) don't have/receive all the info they need to make a sound decision or are b) asked an unfair question.

Annnyway, that being said, I stand by my points from earlier. I think the hearings were an interesting insight into the players and their strategies - I just happen to believe that a deal is a deal, and that the economy, neighborhoods and airline customers would benefit from direct competition at DFW.

 

[Chest Rockwell]

I think the simple standard is this: If it were not a law today, would it merit being made into law?

I believe the answer for both the WA and age 60 is no.

 

[indiglo]

I agree that stats can be skewed any way you want them to be - and that people in a lot of polls either a) don't have/receive all the info they need to make a sound decision or are b) asked an unfair question.

Annnyway, that being said, I stand by my points from earlier. I think the hearings were an interesting insight into the players and their strategies - I just happen to believe that a deal is a deal, and that the economy, neighborhoods and airline customers would benefit from direct competition at DFW.

Hamburgler, I'll make you a deal. If you can prove that SWA made a "deal", I'll start a thread in your honor.

However, I don't believe that you can do so. SWA did NOT make a deal. Fort Worths own Jim Wright snuck the limitation language into another bill. SWA complied with the law, but was not in agreement with the law.

 

[Hamburgler]

Ok, that was a good one and you really got me thinking!! It's hard to look back that way though b/c it was all done b/c the community wanted to support one strong airport.

I think if SWA wants to keep short service at Love they should go for it, but come over to DFW and help consumers out by offering tons more flights from 2 airports and compete with other airlines so prices stay low for those of us flying!

I have to say that these threads DO make you really think about the issue inside and out - and I think we all appreciate it when comments stay above board and don't get nasty!

 

[canyonblue]

but come over to DFW and help consumers out by offering tons more flights from 2 airports and compete with other airlines so prices stay low for those of us flying!

Ok. But the so called "splitting of the hub" is detrimental to American, but ok for Southwest to operate out of 2 airports. uke:

 

[Hamburgler]

Hamburgler, I'll make you a deal. If you can prove that SWA made a "deal", I'll start a thread in your honor.

http://www.fwbusinesspress.com/display.php?id=208&search=Kelleher quotes

Very interesting article in its entirety, I think at the very least it shows that Herb didn't exactly get the wool pulled over his eyes and knows the issues that this presents - and at the time Wright was passed issued some statements to the effect that SWA was pleased with the outcome - as the alternative was them getting booted to DFW to compete with the then-current big guns. Wright was born out of community interests around Love Field and to support DFW - two claims which I think stand today.

More recently (11/05) from the Dallas Star-Telegram:
"Kelleher, who maintains that he accepted the Wright Amendment in 1979 to keep his airline together, has been leading the campaign to repeal the law that limits long-haul flying out of Love Field."
http://www.dfw.com/mld/dfw/business/13141291.htm

And to SWA's credit, look where they are today - I think SWA dodged a bullet back in the day, and maybe it's finally time for them to compete with everyone else at DFW.

Ok, I have my Kevlar body armor on...

 

[flyingitalian]

http://www.dfw.com/mld/dfw/business/13141291.htm

And to SWA's credit, look where they are today - I think SWA dodged a bullet back in the day, and maybe it's finally time for them to compete with everyone else at DFW.

If you call two victorious trips to the supreme court dodging a bullet only to be shot down by legislation pushed by the congressional rep from the area who also happend to be the mojority leader....OK.

Listen these other carriers would have moved to a bigger airport anyway, because of the size of Love field and the desire to fly equipment that requires a longer runway. Dont think this would have happened? They why did it happen at every other large city in the united states?

As far as Herbs comments about two full fledged hubs not being a good thing, I believe he stood by those comments and rightly said hey we are not a hub and spoke operator. We dont hub. If Amerian wants to split their hub well they are certainly free to do so, but it would not be positive for their profitability. They can operate just like they do in Houston, Chicago, New York, Miami, San Fran, Boston and in the past Dallas when they killed Legend.

The wright ammendment in wrong ,un american, un competitive, and antiquated...it needs to die.

 

[indiglo]

http://www.fwbusinesspress.com/display.php?id=208&search=Kelleher%20quotes

Very interesting article in its entirety, I think at the very least it shows that Herb didn't exactly get the wool pulled over his eyes and knows the issues that this presents - and at the time Wright was passed issued some statements to the effect that SWA was pleased with the outcome - as the alternative was them getting booted to DFW to compete with the then-current big guns. Wright was born out of community interests around Love Field and to support DFW - two claims which I think stand today.

More recently (11/05) from the Dallas Star-Telegram:
"Kelleher, who maintains that he accepted the Wright Amendment in 1979 to keep his airline together, has been leading the campaign to repeal the law that limits long-haul flying out of Love Field."
http://www.dfw.com/mld/dfw/business/13141291.htm

And to SWA's credit, look where they are today - I think SWA dodged a bullet back in the day, and maybe it's finally time for them to compete with everyone else at DFW.

Ok, I have my Kevlar body armor on...

'

"very interesting article in it's entirety"?????? Did you read it all? I started out with a Kevin Cox assertion, then proceeded to rebut said assertion for the next four paragraphs.

Next, accepting a situation is one hell of a long way away from agreeing to that situation.

Finally, words mean things. Read with a critical mind and you'll go far.

 

[Hamburgler]

I do fine with critical reading, just because we don't come out on the same side doesn't mean that either of us have comprehension issues.

I was careful to say that what I posted did not prove Kelleher signed off on Wright, but the *stand alone* quotes do show a modicum of understanding (at the least!) of the other side of the issue on the part of SWA. (It also shows, there ARE two sides to everything and everyone is entitled to their opinion, even on Flight Info!!

 

[Snoopy58]

Like Herb said in the hearings, he "accepted" the WA the same way the Germans "accepted" the end of World War One, i.e. with a gun to his head. To the extent that it didn't kill his airline, the WA was a compromise that he didn't have to oppose in order to survive, but that's a far, far cry from "a deal is a deal" and "agreeing" to never ever seek to have Congress relook the issue 25 years later!

The WA is a law, not a "deal," and a darned poor one at that. American opearating out of Love Field (when they came over to kill Legend) was a "deal." Delta operating a hub at DFW was a "deal." Circumstances change, and deals get renegotiated. Circumstances change, years pass, and laws get changed -- happens all the time. The WA got amended by Shelby, and now by Bond. Hopefully the next amendment will get rid of it entirely.

Set Love Free!

 

[Skyboss]

hey furloughed dude, SWA existed for about ten years before the WA came into being. The WA wasn't a part of the SWA business plan, it couldn't have been since it didn't exist when SWA was planned. SWA never asked for the WA, and it can be argued that the WA NEVER helped SWA. So why do you continue to try and spin the WA? I can be won over by a logical, well thought out, well presented argument; I'll never be persuaded by incorrect, unsubstantiated stuff like you write. Are you trying to make a point, or just being difficult?

The region never asked for DAL to stay open either, a lawyer did. A judge made a ruling on intrastate air travel for an airport that at the time making it a State issue. Times have changed, air commerce is now a Federal issue. Southwest is the one that didn't adapt. They should have been smacked 20+ years ago.

That do it for you???

 

[Skyboss]

The people who are pro-Wright Amendment......DFW, Ft. Worth, etc. are using the argument that DFW airport will suffer from repeal, and that the cities had a deal back in 1968. They keep stating this but yet they do not make their case very well. They sound like a bunch of little kids who keep saying,"that's not fair".

Isn't that what happened to keep the DAL money pit open in the first place. Someone stomping like a little kid who kept saying "that's not fair", and is to this day others saying "that's not fair".

I don't buy the "we're the little guy BS" either anymore.

 

[Hamburgler]

The "gun" to Herb's head was moving to DFW at a time when SWA arguably could not have played ball with the big boys. The "deal" allowed them to stay there and continue to grow, and I think everyone can agree that they made out on that front back in the day.

 

[canyonblue]

The "deal" allowed them to stay there and continue to grow,

Please stop using this stupid statement. There are 2 things that happened to SWA at Love.

1. We were asked to leave Love and go over to DFW. We said no and it stood up in court numerous times. That is an incontestable argument, the courts gave us the right to fly out of Love, no "deal".

2. The Speaker of the House Jimbob Wright helped his buddies at AA by squashing the new open skies of deregulation by regulating an airport, Love. We had to stay a Texas and a few select state airline for many years to come. Had the WA not taken place and we could fly non-stop to MDW, LAS, LAX etc. out of Love, I agree SWA would be a different airline today. We would be much bigger.

And who are you, Lowecurs son?

 

[Hamburgler]

haha, hardly! I've just kept up with this issue and am the vocal minority apparently!

Your two points are fact and are not disputable.

But, Wright was put in place for a reason, to support DFW and the local economy that stems from the airport. While DFW has grown a ton and is now a major airport, it is still important to support that. In the hearings, didn't they talk about how cities with one major airport (Minneapolis) in fact get more traffic than cities like Chicago and Washington? There is something to be said for the economy of an airport/community having everyone in one spot.

 

[ivauir]

. Southwest is the one that didn't adapt.

Riiiiiight.... too bad the facts don't back this hair brained opinions up AT ALL.

 

[canyonblue]

There is something to be said for the economy of an airport/community having everyone in one spot.

Yes, if you are the dominant carrier at that airport. The traveling public does not see it your way however, but feel free to continue to take up oxygen on this planet. Whats your background again? Insurance.uke: