It was 1979 when Jim Wright, a Congressman from Fort Worth, Texas added an amendment to the International Air Transportation Act which would change the commercial aviation market in and around Texas. And now, 35 years later, the Wright Amendment has been repealed, leaving Dallas’s Love Field as pretty much just another airport. There are still arbitrary limits – only 20 gates in the terminal – and those artificially cap the number of flights at the airport. Plus the runway is only 8800 feet long which also limits some operations. But any airline can now operate just about any domestic flight, so long as it can acquire a gate.
For Southwest Airlines this means more than doubling the destinations served from Love Field over the next three months from 16 to 33. The number of daily flights will peak above 150 by January. The change also means Virgin America can fly to its desired destinations with the gates it acquired from American Airlines. It means press conferences with bad puns and water canon salutes for a bunch of flights. A new airline is operating and another is struggling to figure out if it can continue to do so. And, in many ways, it means Love Field is much more normal than ever before.
Then again, Love Field is a fortress hub in the worst sense of the term. More than 96% of the 4 million passengers carried in or out of the airport in the past year flew on Southwest Airlines. That’s the highest skew of any airport in the country where more than one airline operates. And while Virgin America hopes to add some competition with service to major cities (New York, Washington, Los Angeles & San Francisco) they’re still only going to be offering 10-12% of the flights Southwest has planned. Their market share will necessarily remain absurdly low without much chance for that to change. And the City of Dallas doesn’t really seem to mind so much; at least the elected and appointed officials do not. They’re actually considering changing the name of the public road leading into the airport in honor of the founder of Southwest, because a bit of free advertising wouldn’t hurt, right??
And for the people flying in and out of Dallas the repeal of the restrictive route rule will, in part, be responsible for reducing the number of airlines flying in and out of their airport. Less competition is rarely a good thing for consumers, though in this case more destinations served might help a little bit to offset that sting. And, at least in some cases, the fares are definitely more competitive than they were in the past. Looking at advance purchase, one-way fares from Dallas to Washington, DC, for example, and it is clear that the new flights from Southwest have an impact. American is charging $420 on half of its daily departures and $135 on the other half for one day in mid-November. The cheaper half just happen to line up with the departure times as most of the newly introduced Southwest flights. Both Southwest and Virgin America have their cheapest fares set at $78.
Then again, those $420 fares book directly into first class, so there’s something returned in value for the higher spend, though not likely enough to justify the fare difference.
Today is day one of the new era at Love Field. The era in which it is mostly just another airport, except the part where one airline has been granted control of 80% of the gates. I’ve got a bucket of popcorn at the ready to watch this one play out. It should be most entertaining.
Related Posts:
- Delta at Love Field: Not dead yet
- Southwest adds Bay Area flights from Dallas Love Field
- What would a Virgin America hub look like in Dallas?
- Who gets Southwest’s LUV from Dallas?
- Virgin America to establish east coast operations
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Your normally even-handed analysis left out the part where DAL and DFW are 22 minutes apart and serve the same market. What percent of flights does WN have of the combined DAL/DFW market? How about AA?
When you say things like, “Then again, Love Field is a fortress hub in the worst sense of the term. More than 96% of the 4 million passengers carried in or out of the airport in the past year flew on Southwest Airlines. That’s the highest skew of any airport in the country where more than one airline operates.” without clarifying that it’s one of two airports right beside each other, it’s misleading.
It is also interesting to note that the Wright Amendment, which was specially designed to hurt WN, is what caused WN’s incumbency through the tough years at DAL and gives them the position they have today.
So many other airport pairs are similarly spaced; I’m not so sure that’s completely an excuse. Even at Hobby Southwest doesn’t have the same level of domination.
DFW is way bigger in terms of passenger count, destinations and airlines. But I’m still not sure why that means it is OK to essentially force a monopoly at DAL. Especially when the position of the City is that if others want access to DAL they need to buy their way in from those to whom the leases were granted by the city.
As for the position they have today, the 16 gates is more than they were using under the old rules (though fewer than they were technically assigned). More significantly, it is a higher percentage. And without the ability to change that aspect of things the City of Dallas essentially has decided that Love Field is to remain a Southwest operation.
It is what it is. And the City has repeatedly shown that they don’t mind at all. I just wonder how long it will be before fares start ticking up just like they seem to do in other airports where Southwest (or any other carrier) has such a large share of the market.
I’m all for opening more gates at DAL. However, the near-monopoly that WN has at DAL doesn’t bother me because of DFW 22 minutes away. Furthermore, the alternative to opening gates would be to force WN to divest gates, which would be wrong and *harm* competition by reducing the competition WN is providing for AA.
If it is only 22 minutes away then couldn’t that same competition simply be provided at DFW where there are no such problems with gate space?
But it cannot, because it isn’t really only 22 minutes away for most travelers. And the 22 minutes number belies many other factors about the two facilities, from rental car return hassles to the distance between gates.
It is a shitty situation and there is no perfect solution. But I’m not convinced that capping the gates and giving WN more of the limited resource was the best solution for competition.
“Then again, those $420 fares book directly into first class, so there’s something returned in value for the higher spend, though not likely enough to justify the fare difference.”
How would you characterize this vs. DL’s First Class Monetization (FCM) and UA’s HOD/TOD buy ups to first?
Is the end result the same? (Less complimentary upgrades for elites)?
It is different from UA’s buy-ups but the same as the discounted *UP fares which book straight into P (though I suppose some of the TODs are the fare difference of that).
As for my opinion on them, good for the airlines if they can sell the product. Domestic upgrades aren’t something I care about very much as a customer and I’ll never begrudge a company for figuring out the correct price at which to sell their product versus giving it to me at a steep discount. Mostly because at the end of the day I have to run a business, too, and that is the way I operate.