An Open Letter on the Amended Wright Amendment

Dear Legislators,

Dallas Love Field is in the process of redefining its role in the greater DFW community. For many years it served as the primary airport for Dallas, and it has long been the home of Southwest Airlines. Since the advent of DFW Airport, Love Field has been relegated to a supporting role, and the Wright Amendment codified unnatural economic restrictions on the field. In 2006, a number of to restrictions of the Wright Amendment were repealed or modified, most to take effect on October 13, 2014. However, the Wright Amendment was not repealed as a whole; in fact, new restrictions on Love Field were appended to the prior amendment at the same time as some of the older restrictions were lifted. Based upon available information, these additional restrictions are a grave mistake that will likely result in a loss of potential revenue for the cities of Dallas and Fort Worth.

At the crux of the argument for the complete lifting of restrictions lies in the nature of the marketplace. DFW Airport is an incredibly powerful economic engine, and one to which Love Field does not and cannot post a threat. DFW has a greater land area than the island of Manhattan, and it is in no danger of reaching its maximum capacity. Despite this, the increase in domestic air travel demand has been focused on Love Field, largely because of its vastly more convenient location to Dallas and the eastern cities of the metroplex. The intense debate over the allocation of Love Field’s two unassigned gates demonstrates the desire of multiple carriers to enter the Love Field market, including the desire of at least one carrier to relocate from DFW to Love Field. The airport has a great deal of capacity demand, and yet it is permanently capped at the number of gates it currently has, and there is no prospect for the entrant of another carrier into the Dallas market via Love Field. The nature of DFW and American Airlines’ firm grip on it makes the airport a traditionally difficult one for new entrants into the greater DFW market.

From a competitive standpoint, artificially limiting the capacity of Love Field serves only to decrease competition and increase prices in the marketplace. As part of the new agreement, Southwest Airlines is effectively bound to Love Field, where it has only 16 gates. In order to gain more gate space, Southwest would have to relocate to DFW airport, but it would be forced to give up one gate at Love Field for every gate it gained at DFW, meaning that it would have to surrender all 16 of its gates at Love Field in order to increase the number of gates it holds. In light of the consolidation of American Airlines and US Airways, Southwest stands a greater chance than ever before of providing meaningful competition for metroplex residents, and yet these new restrictions effectively eliminate that possibility—a fine way to repay a remarkable business that has been contributing significantly to the Dallas economy for decades, in spite of ample reasons to relocate elsewhere. In addition to Southwest, Delta, Virgin America, and JetBlue have all expressed interest in starting or expanding operations at Love Field, but this would currently be impossible. JetBlue, for instance, currently operates a single route to DFW from its Boston hub using its smallest aircraft type. The American fortress hub at DFW made it virtually impossible to upgrade this route or to add service to the even larger hub of New York-JFK. Virgin America’s service to three additional cities from the metroplex was contingent upon the ability to operate them from Love Field, rather than its previous home of DFW. Despite the desire of a fourth airline to create a hub in the DFW area, the restrictions currently in place make that virtually impossible, and it can only translate into an economic loss for Dallas.

Finally, the needs of the DFW marketplace need to be addressed. DFW is currently the fourth largest metro area in the United States, and it is estimated that it will surpass Chicago to take the third spot within a decade. Virtually all of the largest metro areas in the United States are served by multiple commercial airports—particularly those whose city centers are located a substantial distance from the primary airport. New York, Los Angeles, and Chicago all have a primary airport larger than DFW and at least one secondary airport larger than Love Field. In Chicago, for instance, between O’Hare and Midway, has a gate capacity of approx. 225 (ORD 182/MDW 43), compared with just 185 in the metroplex (DFW 165/DAL 20). It is also worth noting that Chicago’s airports are both located in proximity to downtown and are both accessible by accessible, reliable public transportation. In fact, it is possible to travel directly from one terminal building to the other via the CTA. The metroplex has neither of these advantages, which severely limits consumer choice and effectively prevents hybrid itineraries, particularly for international connecting passengers.

Although an unrestricted Love Field would continue to require work on the part of the city to improve connectivity and infrastructure, it would have an untold positive economic impact and create meaningful choice for consumers. The current airport has the space to extend the new terminal at both ends (only slightly on the west end, but substantially on the east end), as well as to construct a satellite terminal, possibly for short/medium-haul international services. In doing so, Dallas will assure its place in a substantial air travel market, allowing the city to capture additional revenue that would otherwise be spent in other cities. Additionally, it would create more consumer choice and end the reliance on connections in cities like Houston and Austin when flying Southwest. An unrestricted Love Field must be an integral part of growth plans for the modern metroplex.

 

Regards,

Austin Speaker