Southwest is expanding at Love Field thanks to an agreement secured at the end of last week with United Airlines. United’s two gates will be subleased on a long-term basis to Southwest, allowing the Dallas-based carrier to operate the additional flights to nine new cities. With the move Southwest will have control over 18 of the 20 gates in the airport; the other two are controlled by Virgin America which acquired the gates from American Airlines as part of a required divestiture related to that company’s merger with US Airways.
Halo by Eric Lumsden, on Flickr; CC-ND 2.0
The gates will shift over in April 2015, with United cutting back service to its hub at Houston Intercontinental. United’s use of the gates has been the subject of some sparring in the aviation community with accusations of willful inefficiencies to block other carriers’ access. In September 2014 United indicated to Dallas authorities its intention to increase service at Love field as part of its justification for not providing gate space to Delta at the airport.
Most recently United agreed to lease space to Delta to allow for continued service on the Atlanta-Dallas route. That was a 180-day agreement reached at the beginning of January which means it overlaps with the new sublease deal by about three months. It is unclear what will happen when the initial transfer of gate access is made or at the end of that 180-day window. But it is entirely possible that Delta will be pushed out of Love as part of this deal.
It is also worth remembering that United has previously fought aggressively to slow Southwest’s growth in Houston. But apparently the view is a bit different when the growth comes at the expense of United’s other competition. Also, the current United flights are run on 50-seat ERJ-145 aircraft, a type the company is significantly reducing in its fleet. Those reductions are affecting other routes as well, though this is the first where others have been angling for access.
The DOJ Antitrust Division approved the deal so it seems the government is convinced it will not adversely affect competition. And based on the earnings report from American Airlines last quarter the seems to still be some competition across the two airports; AA noted a sizable hit in local yields for Dallas traffic with the repeal of the Wright Amendment and growth of longer routes from Love Field. Still, one airline controlling 90% of the traffic at an airport seems like the sort of thing the Feds typically frown upon. Or maybe it is just that the government only really cares when such moves happen in New York City or Washington, DC.
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Any guess as to how many additional flights the 2 gates can add for Southwest? It sounds like they will announce 9 new cities so I’m curious how many additional flights per day they can add with the 2 new gates.
Typically a gate can handle around 10 flights daily at reasonably high utilization. Currently Southwest runs ~150 daily flights from 16 gates but doesn’t operate too late nor too early. But that’s a good framework to start from.
People in Memphis are pretty excited about getting 2X daily flights to LUV… hopefully timed for decent westward connections… and we’re definitely a market where AA has been mining high yields since DL stopped serving the route, so this should normalize things somewhat.
The Dallas Morning News article on this says that “Southwest spokesman Brad Hawkins said the carrier “will continue the current accommodation that United made for Delta, which runs through July 6.””
http://www.dallasnews.com/business/airline-industry/20150130-southwest-airlines-gaining-two-dallas-love-field-gates.ece
Not too surprising with that and it answers half of the question. Seems unlikely to me that Southwest is going to want to continue that arrangement past July. Then again, as has been made abundantly clear at Love Field, money talks.
Any guess as to how much Southwest will pay United for the sublease?
I have absolutely no idea. And I’m guessing that the details won’t see the light of day.