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“IS SOUTHWEST A WHITE KNIGHT OR A BLACK WIDOW? By Dr. Bernard L. Weinstein PDF Print E-mail
by Special to DallasBlog.com    Tue, Mar 7, 2006, 05:09 PM

A seven-month truce has been declared in the battle over the Wright Amendment. Curiously, this truce was not reached by the cities of Dallas and Fort Worth, nor by American and Southwest Airlines. The combatants in this latest skirmish are Members of Congress from the Metroplex and other parts of the U.S. who claim to have an economic interest in the outcome of the Love Field “liberation” battle.

Ostensibly, the truce is supposed to give the mayors of Dallas and Fort Worth an opportunity to come up with a “solution” to the conflict. Through ticketing, one-stop service from Love, or a wider perimeter are among the alternatives that have been proposed. Another is to set up a regional airport authority similar to those operating in New York, Chicago, and Southern California. Some, including this author, have proposed closing Love Field to scheduled air service. And Southwest Airlines is once again threatening to move its headquarters from Dallas if the “solution” is anything less than full repeal of Wright.

Unfortunately, the press and the politicians are ignoring the fundamental problems with commercial aviation in the DFW region, which have nothing to do with the Wright Amendment restrictions at Love Field. First is the lack of any meaningful competition and second is the region’s excess airport capacity.

American Airlines, with 87 percent of the passenger traffic, possesses a virtual monopoly at Dallas-Fort Worth International Airport. Southwest, with more than 90 percent of the passenger traffic, enjoys a virtual monopoly at Love Field. Consequently, travelers to and from the Metroplex pay higher average fares than are found in any other major market. To make matters worse, both DFW Airport and Love Field are underutilized—especially DFW with the addition of Terminal D and the Delta Airlines pullout from Terminal E (now known as the “ghost” terminal) last year. Put differently, we’ve got too much concrete and not enough aluminum in the local commercial aviation industry.

Given the sorry state of U.S. airlines, with most of the legacy carriers in bankruptcy or skating on thin ice, repealing Wright won’t solve the excess capacity problem. It will simply result in flights being shifted from D/FW to Love, which is already occurring with the recent addition of Missouri to the Wright Amendment states.

Southwest wants to be perceived as the “White Knight” in its quest to “liberate” Love Field. But in fact, they’re being extremely disingenuous. Where were they 20 years ago, when the industry was healthy, profitable, and expanding—and I co-chaired a task force of the North Dallas Chamber of Commerce that was trying to repeal or modify the Wright Amendment?

If Wright had been repealed back then, we would probably have witnessed a more competitive evolution of commercial air service in the region, though we surely wouldn’t have invested $3 billion in upgrading and expanding DFW. Why did Southwest wait nearly three decades to abandon their “passionate neutrality” on the Wright issue? The answer is simple: They “love” their monopoly at Love. And they know that given the precarious financial footing of American Airlines and other carriers, any competitive response at Love will be limited. American has even admitted they’ll probably lose money on their new service from Love Field to St. Louis and Kansas City.

We should also be mindful of the fact that 64 percent of DFW Airport, as well as 100 percent of Love Field, is owned by the citizens of Dallas. Sure, Love Field is an important city asset. But it pales by comparison with the city’s $10 billion investment at DFW. While competition between carriers is always good, competition between airports can be bad—especially when they have the same owner, serve the same local market, and are only eight miles apart.

The ideal solution to the dilemma posed by the Wright Amendment—one that could help fill DFW’s empty gates, spur competition, and bring down north Texas’ high airfares—would be for Southwest to shift its operations from Love Field to DFW. Southwest claims it can’t operate profitably from a “congested” airport like DFW. But that’s sheer nonsense. They’ve been serving Los Angeles International for more than 20 years with more flights than they currently operate out of Love. Surely, LAX isn’t a loss leader for the company.

Citizens of Dallas should be concerned first and foremost with protecting the city’s huge investment at DFW International. But since Southwest has stated emphatically it won’t relocate to DFW, the only alternative is to close Love Field to scheduled air service. Love would remain an attractive airport for general aviation and industrial uses. And if Southwest then decides to pick up its marbles and leave the market—which is hard to imagine—so be it.

Dr. Bernard Weinstein is Director, Center for Economic Development and Research at the University of North Texas

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