Well, this year’s Congressional machinations over the Wright Amendment are over and the outcome is about as satisfying as one of those hard-fought football games that used to end in a tie before the era of overtime. Rather than simply repeal the damn thing, Congress decided in a transportation bill to lift only the Wright Amendment restrictions on Southwest Airlines flights out of Dallas’ Love Field to Missouri. Thus, north Texans will now be able to fly direct from Love Field to St. Louis and Kansas City.
This Ft. Worth Star Telegram article notes an expert’s estimate that the result of the modification of the Wright Amendment will be that American Airlines — which controls most of the D/FW Airport — will lose up to $115 million in revenue because of new competition, Southwest Airlines will pick up about $80 million and consumers — often overlooked in the debate over the Wright Amendment — will save about 25 percent on fares. So, not a bad result overall, particularly given that an outright repeal of the Wright Amendment is not politically feasible, at least as of yet.
However, I find it ironic that the Wright Amendment was enacted to facilitate the growth of the D/FW Airport. The effect of the legislation is now having quite the opposite effect. D/FW is underutilized with numerous empty gates and very few low-cost airlines — JetBlue, for example, recently opted to fly out of Austin rather than D/FW. Consequently, American Airlines now controls about 85% of D/FW’s business, which is good for American’s business, but not good for consumers seeking the lowest possible fares.
Meanwhile, there is not much question on how most North Texans feel about the repeal of the Wright Amendment. Given the heavy public support for repeal, the real reason for some politicians’ opposition to repeal becomes even clearer. Could it have something to do with the fact that American Airlines stock — which traded at under $2 a share as recently as early 2003 — now trades at over $17 a share?
Wow, did you find that picture on an “Over the Top” promotional poster?
/back to studying
If DFW is underutilize and there are empty gates, then that is a bad thing. Part of the Wright Amendment was to recognize that a strong central airport can be good for a community. Keeping Love Field open at the expense of DFW is not what the community intended when DFW was built.
Traffic at DFW has fully recovered since the departure of Delta Air Lines; DFW is the 3rd largest airport in the world.
The only folks I can find subscribing to the notion that airport monopolies are good are the folks at the DFW Airport Board, American Airlines and their cronies/lap dogs.
Indeed, the Airline Deregulation Act of 1978 actually made a point of encouraging service to large metropolitan areas via multiple airports. Why did they do this? Simple, to encourage competition and lower prices.
Given the existence of the Wright Amendment and American Airlines’ 84% monopoly position at DFW, is it any wonder that DFW has some of the world’s highest airfares on a per mile basis?
Rick, I think George was referring to this line in the blog post:
“D/FW is underutilized with numerous empty gates”
If DFW is, in fact, underutilized, then that is kind of a waste of all the money the community has invested in the airport. I’m not saying we should ban Southwest from Love or anything, but it does seem like it would be more ideal if we were using DFW to capacity.
Frank,
On a percentage basis, Love Field has far more empty gates than D/FW. With respect to overall capacity utilization, again, D/FW is far more congested than Love Field.
With respect to “community investment,” D/FW is financed entirely by the airlines, not by taxpayers. In contrast, the City of Dallas is responsible for Love Field operations.
Several years ago, in response to significant Love Field expansion plans announced by American Airlines (and AA’s huge projections of increased passenger volumes), the City of Dallas built a huge parking garage to accommodate the demand they were told to expect.
Not only did it never materialize, American Airlines pulled out of Love Field entirely, leaving the City of Dallas on the hook.
If, indeed, we are to buy off on your arguements, then Love Field, not D/FW, is where traffic should be directed, at least in the near term.