Industry awaits impact of Wright Amendment expiration

By Kate Rice
DallasLoveField410Airlines will soon be free to serve all 50 states from Love Field in Dallas with the Oct. 13 expiration of the Wright Amendment, the law that has limited long-haul flights out of Love for 34 years.

But the airline for which the expiration really matters most is Southwest Airlines, the Dallas-based carrier that controls 16 of Love’s 20 gates and has built itself into an industry powerhouse flying in, under and around the Wright Amendment’s limitations for three decades.

Southwest recently disclosed a plan to launch 15 routes from Love to points that were previously beyond the airport’s reach, beginning Oct. 13.

“Finally, we have free skies over Dallas,” said Henry Harteveldt, travel industry analyst for Hudson Crossing.

Although it’s a new era for Southwest and for the airport in terms of the allowable routes, some immutable realities remain. For one thing, the airport will remain prohibited by law from expanding beyond 20 gates.

SWA Love Field RoutesWith its 16 gates, Southwest will realistically be limited to no more than 140 or 150 or so flights a day. (Click here or on the image for a larger view of a map of Southwest's route map at Love Field.)

In addition, international service, a market Southwest only recently entered, will remain banned.

The Wright Amendment was signed into law by President Jimmy Carter in 1980 to limit competition with Dallas/Fort Worth Airport (DFW), then under construction, and the bonds that were being issued to finance it.

But Mike Boyd, president of Boyd Aviation International, predicted that the end of the Wright Amendment would have minimal impact on overall commercial aviation in the Dallas-Fort Worth region today and posed no threat to DFW.

He estimated that Southwest’s additional flights to a broader range of destinations would mean, at most, a 4% decrease in local traffic at DFW.

“Everybody go back to sleep,” he advised.

Even so, Southwest predicts that the post-Wright era will bring more competition and lower fares to Dallas.

And, when coupled with the carrier’s recent slot wins at Washington Reagan and New York LaGuardia, the airline claims the extra flights will mean lower fares and a larger passenger base for several markets.

Harteveldt agreed.

“Southwest will inject healthy and, no doubt, spirited fare competition in the market,” he predicted. “I think we’re well past the days of Southwest offering people free bottles of whiskey to fly them, although I wouldn’t be disappointed to see some of those stunts come back just for fun.”

Boyd, on the other hand, predicted the new routes would not be a “huge bonanza for low-cost service.”

“It’s not low-cost anymore,” Boyd said of Southwest. “It’s mature, it’s very efficient, but it’s not dirt cheap anymore, and they price their product so they can make money on it.”

Moreover, he said, Spirit Airlines, the ultra-low-cost carrier, now operates out of DFW, meaning travelers can get low fares from the area’s primary airport, as well.

Southwest’s chief commercial officer, Bob Jordan, said that low fares remain the airline’s core precept, and that helps build business for all airlines, not just for Southwest.

He said that even when Southwest enters a big market on a small scale, studies show that fares drop 20% and passenger numbers grow by 20%, not just for Southwest but for every carrier in that market.

“This opens a whole new level of competition in Dallas,” Jordan said.

For one thing, the new flights mean that passengers who fly into Love from other cities in Texas — Midland/Odessa or Amarillo, for example — now can fly nonstop from Dallas to 31 cities across the nation. Previously, travelers from those cities had to fly to a destination in one of eight neighboring states to get on a national grid.

Similarly, Love Field will become a far more attractive destination airport for Dallas-bound travelers, who will be able to fly nonstop from major markets such as Los Angeles, New York and Washington, Jordan said.

Harteveldt found some curious omissions in Southwest’s new flight schedule.

He noted that Oakland, a major West Coast hub for Southwest, was not on the list, nor were Seattle or Boston, both large markets with leisure and business appeal where Southwest already has a strong presence.

He said the 15 cities that Southwest just announced might merely be the first wave of new destinations, with others in the wings. He speculated that Southwest might have to drop some cities or scale back flights to some destinations to add more longer-haul flights.

One major carrier has already responded to Southwest’s announcement of its new flights. Delta Air Lines, currently operating five flights a day from Love Field to Atlanta using gates it subleases from American Airlines, has already loaded into its res system flights from Love to its major hubs and markets — Minneapolis, Detroit, Los Angeles and LaGuardia — starting Oct. 13.

Boyd dismissed that as simply an effort to “mess with Southwest,” not something that presages a major battle over Love Field.

The expiration of the Wright Amendment coincides with the modernization of Love Field itself. Southwest is operating out of what is essentially a brand-new airport. Love Field gutted its 1958 main terminal, knocked down concourses and transformed itself into what Harteveldt called a “21st century concourse.”

“It’s a wonderful facility that we’ve built,” Jordan said.

Love Field remains more conveniently located than DFW for residents of Dallas. However, DFW, which just celebrated its 40th anniversary, has been a successful economic engine for the region and is now surrounded by office parks, residential neighborhoods and hotels.

Much of the growth in the Dallas/Fort Worth metroplex has been to the north and west of DFW, which makes it a convenient location for growing number of travelers.

Follow Kate Rice on Twitter @krtravelweekly.
 
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