Study Finds Opening Love Field to Long-Haul flying would have Serious Conserquences

[kelbill]

SWA is not asking the government to legislate a competitive advantage for themselves. We are now asking the government to remove a Congressional Anti-competitive Amendment from the books in DC. Kind of like the Bill of Rights being added after the Constitution was written. We are trying to change things for the better. The only legitimate arguments I see, and they are truly legitimate, is the fact that the other carriers were forced to up and move (pseudo forced, as I'm sure they actually had a major part in the design and expenditures of DFW), and hence they had expenses to deal with and have based their business plan on that fact since its opening.

But as others have alluded to, why is this not a problem in LAX (Burbank, Orange County, Long Beach, Ontario) or ORD (MDW), or Houston with Hobby and Intergalactic? Why didn't DFW FORCE DAL to keep hundreds of flights there and not pull out? The market per chance? Then let the market determine this situation. As a SWA employee I want it to go away because it would be good for business and I think it is quite unfair. As a consumer who might live in the metroplex, I would be livid that my choices were extremely limited, and hence my costs much higher than need be. Econ 101.

And if the purpose of the government is not to help one company over another, especially in such a competitive industry, how can keeping an anti-competitive Congressional restriction on a single airport in the US do anything but specifically help SWA's competition? They should have bulldozed it like Stapleton in Denver if they really wanted Love closed off.

 

[chase]

At 41:58 the Will Rix AA spokesman says:

There were just two conditions in which we (AA) want you (EClat) to operate under when doing this study. First of all, we want to make sure you take a look at this and you agree with us in principle as to what our advocacy is and secondly....ah ECAS said they would do....in fact they did agree with us...secondly we're not going to do your analysis for you...we're not going to give you proprietary material, we're not going to tell you how we think about it, we want you to take an independent, objective look at it based upon the tremendous number of years you have and then do an analysis and that is exactly what has happened..." 42.34 tape stop

At 44:54 with the first question from the crowd the very question was asked in regards to how much did the study cost & why should it be considered valid if the author had to agree with the client (AA) in advance to the study. As Risk states the bet was whether this would be the first question vs. on the content of the study but it is a valid question. Judge for yourself by his answer if you believe he answered it properly. It is a valid question but the material presented has some very interesting data.

I won't disagree with the assumptions (yet) but what is very interesting to see if the gloom & doom presented that small cities will lose service leaves out one very glaring issue....no where in the study is the assumption that another carrier, regional or major or new startup will fill the void. Historically where there is demand for service then the void is filled with some sort of air travel either generated by the demand or by subsidies from the government via the EAS system from the government. Will every regional out there pass on what Eagle decides to pass up on? If AA starts to lose money at Love will they remain there? No discussion about an average ticket fare is mentioned.

Arpey back in Oct '04 when this issue first came up stated then that AA would move to Love but admitted then "AA would lose money at it." The cost of fuel to AA currently isn't $65 a barrel but well over $100 due to the difference between what a price of oil costs and what distilled jet fuel costs...the dreaded "crack spread" is hurting them & many others....it is hard to believe they would move to MDW to compete with us so why does that business model make sense in Dallas? If AA is threatening to jump off a cliff should that mean nothing should change to make sure they don't commit a financial hari-kari? Threatening to make a bad business decision doesn't appear to me to justify keeping high fares in price.

Why was there no study to show why AA couldn't compete from DFW? What would happen if they moved out to Alliance? I bet the same thing would occur but why do that? Why not remain where they are & then do a study based upon what they could charge?

I respect AA for making a valiant effort at putting forth their reasons. There is much merit behind this study than the last one but I'll be looking for more behind it as I look at it. Folks of sane minds will come to different conclusions and whether it pushes anyone closer ot the other side I don't know but the debate is good....to those who are engaging in healthy debate, please continue, my initial review will continue through the Q&A....cheers,

 

[Jim Smyth]

(Please no comments on the bankrupcy courts, we all no that system is broke)

This is one of the bigger factors driving this WA issue IMO. Its been dormant for 30 years until recently. GK has to produce profits for the shareholders. So since 50 percent of the airlines arnt paying there 100 percent of the bills we have to find more ways to return shareholder value or whats the use.

 

[scoreboard]

Because we did not agree to it...

Since I am furloughed from AA and have moved to greener pastures I really could care less what happens to the whole Wright Amendment thing.

I just find it incredibly hypocritical that SWA now wants the Wright Amendment repealed when 30 years ago Herb himself signed off on the deal. The whole Wright Amendment was put into place to appease SWA so that they wouldn't have to move to DFW like everyone else. Now they are crying foul.

Again, spin on your part. We did not agree to it, we did not start it, we did not ask for it, we did not sign anything saying we would live with it, we were forced to operate under it. We don't want it any more.

 

[ivauir]

The Wright Amendmend has been a around since SWA was started ...

Not true.

 

[Draginass]

Screw the whole thing. Let the chips fall where they may. Screw the small cities in Texas, and screw the taxpayers in Dallas.

 

[FlyBoeingJets]

Screw the whole thing. Let the chips fall where they may. Screw the small cities in Texas, and screw the taxpayers in Dallas.

This threat to cut service to small cities is not relevant to the WA. AA will still be able to get the small town passenger where he or she wants to go, if they deem it in their best interest to do so. AA needs to fill those MD 80's. If AA wants to cut service to smaller cities they will do so with or without the WA. But, knowing AA, they will say service was cut and furloughes at Eagle were due to threat of WA repeal.

If SWA cut fares a few dollars for ticket to LA from Dallas you are telling me AA will lose all their passengers?? Right.....

Why aren't we talking about the huge benefit AA got when DAL pulled out of DFW?? AA's profit potential soared when that happened. And, as was discussed, SWA's traffic has not really grown in Texas. AA is DOMINANT in Texas. AA is crying wolf as they eat everything out of the picnic basket. AA loves their competitive advantage and will do anything they can to leverage it, including lying about it.

 

[On Your Six]

I agree with others on this board who bring up examples like Houston Hobby, Chicago Midway and Long Beach/Burbank/SNA. Can you quantify the detrimental impact to ORD from SWA's operation out of MDW? You can demonstrate that the consumer wins with more choice. DFW's and AA's arguments are laughable and contrary to anti-regulation spirit of American capitalism... Why constrain free choice?

 

[FlyBoeingJets]

Southwest Airlines spokeswoman Beth Harbin said that the study is nothing new.

"It's along the lines of what they have always said," Harbin said. "It's really less of a study and more of a bold threat that they're making to their smallest markets, which is unfortunate."

Southwest said the study has not swayed its position.
" ... D/FW is best for American and Southwest is best for Love Field ... We're two different animals and we have two very different locations for a good reason," Harbin said. "We thank them (American) for their advice. If we sought their advice for all of our operational moves, we'd certainly go out of business."

 

[hoover]

If competition is your argument then why doesn't SWA just come to DFW. DFW has been begging for SWA to launch service there.

Lots of airports are begging for SWA. They only go to the ones that fit their business plan. DFW doesn't fit into their business plan.

 

[hoover]

Since I am furloughed from AA and have moved to greener pastures I really could care less what happens to the whole Wright Amendment thing.

I just find it incredibly hypocritical that SWA now wants the Wright Amendment repealed when 30 years ago Herb himself signed off on the deal. The whole Wright Amendment was put into place to appease SWA so that they wouldn't have to move to DFW like everyone else. Now they are crying foul.

What would you do if you someone out a gun to your head and said "Sign this!"
All SWA wanted to do was stay at DAL. It was American and Braniff that wanted them to move so they could kill them off. SWA's choices back then were to move and die, or agree and live.

 

[erj-145mech]

Southwest Airlines spokeswoman Beth Harbin said that the study is nothing new.

Southwest said the study has not swayed its position.

" ... D/FW is best for American and Southwest is best for Love Field ... We're two different animals and we have two very different locations for a good reason,"

So if WN is happy with the status quo, why lobby for a repeal?

 

[flyinglow]

Lots of airports are begging for SWA. They only go to the ones that fit their business plan. DFW doesn't fit into their business plan.

So lets just change the law, so that it helps us. I am sorry but all your arguments would have made sense thirty years ago, but what was done then should not now be changed just because SWA wants too.

 

[Dangerkitty]

Again, spin on your part. We did not agree to it, we did not start it, we did not ask for it, we did not sign anything saying we would live with it, we were forced to operate under it. We don't want it any more.

Total and complete BS. Your ex-CEO Herb had a big part in establishing and signing off on the Wright Amendment. The Wright Amendment was started to make an exception for SWA so they wouldn't have to move to DFW like all the other airlines did.

I dont know where you are getting your information but it is totally inaccurate.

 

[Dangerkitty]

Lots of airports are begging for SWA. They only go to the ones that fit their business plan. DFW doesn't fit into their business plan.

Fine, then continue to operate out of DAL and abide by the restrictions that were put in place 30 years ago and were agreed to by SWA.

 

[Dangerkitty]

What would you do if you someone out a gun to your head and said "Sign this!"
All SWA wanted to do was stay at DAL. It was American and Braniff that wanted them to move so they could kill them off. SWA's choices back then were to move and die, or agree and live.

No gun was put to SWA's head.

SWA helped craft the agreement. Why dont you ask Herb?

 

[SWA/FO]

SWA rules and the "law" will go away. We will get "our way" - we usually do. End of story.

 

[canyonblue]

I just find it incredibly hypocritical that SWA now wants the Wright Amendment repealed when 30 years ago Herb himself signed off on the deal. The whole Wright Amendment was put into place to appease SWA so that they wouldn't have to move to DFW like everyone else. Now they are crying foul.

It's obvious you dont know the history of the Wright Amendment do you?

 

[Dangerkitty]

It's obvious you dont know the history of the Wright Amendment do you?

I have read it over a few times. And your point is? Please tell me where I have stated anything incorrectly. I would love to know.

 

[Dangerkitty]

Much needed reading for our SWA Friends

This is the full text of a story contributed by former Congressman Jim Wright and appeared in the Fort Worth Star-Telegram on on July 3, 2005.

After spending 35 years in Congress, I long ago lost count of the number of sundry amendments I offered to various bills. Surely more than 100 of them became law. But these days, whenever people in Texas ask me to explain "the Wright Amendment," I know the one they mean.

That law was a 1979 effort to keep faith with the people of Fort Worth and Dallas, whose cities had acted in unison to build -- with the help of some $96 million from the federal government -- a truly world-class airport.

Our government had granted that money and its official sanction on the clearly stated condition that both cities pass legal ordinances permanently closing Dallas Love Field and Fort Worth's Meacham Field and Greater Southwest International Airport to all commercial passenger traffic.

Both city councils had done precisely that. Wanting something far better, safer, more modern and more serviceable for everyone in the region, they formally shut down the two old nearby airports to all but private flights.

Greater Southwest, an earlier attempt to popularize a midway airport for the two cities, would be subsumed as a sort of southerly appendage to the new Dallas/Fort Worth Airport, and it of course would no longer independently originate any commercial passenger flights.

The Federal Aviation Administration correctly foresaw the growth of long-distance and international travel, requiring larger and larger aircraft with longer radius-of-maneuver requirements that would create dangerously overlapping takeoff and landing patterns if both D/FW and Love were initializing passenger flights in large aircraft.

Concerned for safety and fearful of aerial traffic jams, the FAA demanded wider separation than the close physical proximity of Love and D/FW runways.

FAA spokesmen insisted, before signing off on the ambitious development plans for D/FW, that commercial passenger service at Love, Meacham and Greater Southwest be terminated altogether.

Those conditions having been met by the closing of the two old commercial airports, bonds were sold, guaranteeing their purchasers -- in writing, on the good faith and credit of the two cities -- that there would be no commercial passenger flights at Love, Greater Southwest or Meacham.

In 1974, residents of our two largest cities and other nearby towns celebrated the grand opening of D/FW Airport. It was a triumph of reason over greed, we told one another. It proved that we'd outgrown our childish feuds and finally buried our hatchets -- elsewhere than in one another's skulls.

Progressive leadership in both towns hailed the dawn of cooperation to drive away the long night of feuding. That old rivalry had fed for more than a century on a colorful if flinty-hearted past.

In the days when wagon trains were bringing settlers westward, Dallas merchants would regale westbound migrants with lurid tales of mortal danger and/or lethal boredom that lay in wait to devour them if they ventured as far as Fort Worth. They'd be scalped by Indians, eaten alive by wild animals or condemned to terminal stagnation.

Fort Worth, aside from being dangerous, was described as already dead itself -- so sleepy, according to one warning, that a panther had been seen dozing languidly in the middle of a downtown street.

To counter this verbal roadblock, Fort Worth organized teams of outriders to intercept the wagon trains east of Dallas and escort them to Fort Worth by a circuitous route that skirted any sight of the rival village.
Both towns whetted their competitive skills and reveled overly long in the two-way surfeit of one-upmanship.

When Dallas in 1936 hosted a yearlong exposition in honor of the Texas Centennial, Fort Worth countered with a gaudy Frontier Exposition of its own.
"Come to Dallas for culture," Fort Worth sloganeered, "but come to Fort Worth for fun."

An earlier attempt to operate a mutual airport had faltered in the late 1940s and early '50s. Runways had been located meticulously halfway between Fort Worth's Texas Hotel corner and the Adolphus Hotel corner in Dallas. Then Dallas discovered that the terminal building would face west from the centerline toward Fort Worth, and the deal was off!

Legend says that Fort Worth's No. 1 booster, publishing icon Amon G. Carter, carried his lunch in a paper sack when going to Dallas to avoid patronizing any Dallas eatery. And Dallas' merchant prince, Stanley Marcus, refused to order merchandise from any company whose salesman had flown into the midway airport, known variously as "Greater Southwest Regional Airport" and "Amon Carter Field."

But in 1974, we all mutually rejoiced that we were, at last, singing from the same hymn book and working together!

In this euphoric spirit, things rested -- until the intercession of a state agency known as the Texas Aeronautics Commission. That now-defunct commission, on being petitioned by Southwest Airlines, ordered Dallas to reopen Love Field for use by Southwest, which then was headed by Lamar Muse.

The state commission's edict had to be obeyed by the cited city, but it had no jurisdiction outside Texas.

If Southwest had wanted to establish out-of-state schedules, it could have done so by flying from D/FW, just as all the other airlines were doing. At the time, however, Southwest was principally interested in launching flights linking Dallas, Houston and San Antonio.

Meanwhile, freed from certain landing fees that helped pay off the D/FW bonds, Southwest adopted "no-frill" service, advertised low rates and began to flourish. Its owners began to dream of interstate flights.

All its Love Field destinations were in Texas. Invited to use D/FW, the management expressed little interest.

Then came 1978. A movement -- quietly supported by the economically dominant airlines and a group of laissez-faire economists -- to deregulate U.S. aviation was gathering steam.

From the birth of the federally subsidized industry, scheduled passenger flights and fares had been approved and closely monitored in the interest of the flying public by the Civil Aeronautics Board, just as safety matters were monitored by the FAA. The CAB saw to it that all markets were served, that fares were reasonable and that no airline was allowed to monopolize service.

President Carter, somewhat surprisingly, endorsed the concept of deregulation. A bill to effectively abolish the CAB's work swept through the House. Suddenly, prevailing aviation laws would expire, and we'd simply let any airline fly from and to wherever it wished and charge whatever fares it might choose.

Civic leaders, frequent travelers, mayors and city council members from Fort Worth and Dallas saw this as a potential danger to D/FW's contractual agreements. If any company could fly anywhere it wanted out of a reopened Love Field, this could easily renew all the old cutthroat battles that the international airport had been created to settle.

In 1979, this group of concerned citizens came to me for help.

My original amendment, the one that initially passed the House, would have prohibited any interstate commercial passenger flights to or from any airport within a 20-mile radius of D/FW. It was enthusiastically supported by the official leadership of Fort Worth and Dallas.

It set off, however, a massive lobbying effort in the Senate, which rejected the amendment as written and called for a conference committee to resolve differences.

It was at this point that my office participated in discussions with every party at interest, seeking a solution that everyone would recognize as fair. Through these negotiations, we ultimately reached an agreement that all parties embraced.

It allowed Love Field to serve interstate traffic limited to turnaround service between Love and the contiguous states: Louisiana, Arkansas, Oklahoma and New Mexico. This restriction applied equally to Southwest and all airlines.

Southwest was not singled out in any way.

Herb Kelleher -- founder, legal counsel and longtime leader of Southwest -- expressed satisfaction. He'd won a significant victory. And he was welcome, even overtly encouraged, to expand into other states with longer-range flights into and out of D/FW Airport.

Southwest is still welcome there. That Southwest has chosen not to accept the invitation has been entirely of its own volition.

That's about all there is to the "Wright Amendment." This compromise was designed to be in perpetuity, to settle once and for all this very divisive issue.

Although I was not personally involved in all of the negotiations with the parties, which included the Dallas and Fort Worth city councils, affected airlines and federal agency representatives, my office was represented in all of them.

It was well understood by each and every party, including Southwest Airlines, that this was an agreement that was to put this issue to rest once and for all, that all parties would abide by it and that none would attempt to unravel it.

At least, this was my understanding. My friend Herb Kelleher remembers it somewhat differently.

Herb, in my view, is a thoroughly honorable person. Who is to say that I am right and he is wrong?

I have no hostility toward Southwest. It offers splendid services -- well-run, on time, reasonably priced.

If its investors want to inaugurate long, cross-country flights from our market, that's fine with me. Just let them fly, like all the others, out of and into the airport that our region's taxpayers, and others, built for that precise purpose. Let them charge whatever fares they wish, be just as competitive as they can.