Eclat report on Wright Amendment (a crock)
 

Posted on Mon, Oct. 10, 2005


Report: Region would suffer if flight limits lifted at Love Field

DAVID KOENIG
Associated Press

FORT WORTH, Texas - A consultant hired by American Airlines says the nation's biggest carrier would lose 36 percent of its business in Dallas if Southwest Airlines Co. gets its wish and begins operating long-haul flights from Love Field.

Eclat Consulting of Arlington, Va., said Monday that expanding flights at Love Field would also result in fewer overall flights in and out of North Texas by hurting traffic at nearby Dallas-Fort Worth International Airport, American's hub.

That's because AirTran Airways and other low-cost carriers at DFW would shift flights to Love Field to compete with Southwest, the consultant said.

American and its consultant intended the report to buttress their case against repealing limits that Congress placed on Love Field in 1979, but the study also highlighted the financial importance of the fight to American.

A consultant hired by Southwest estimated in May that American stood to lose up to $300 million a year if forced to compete with low-cost Southwest for travelers going to and from the Dallas area. By opening up Love Field, travelers would save $700 million a year and travel to Texas would increase, boosting the local economy, Southwest's consultant said.

William Swelbar, managing director of Eclat, disputed those findings, although he conceded that letting Southwest expand would lead to some lower fares.

Eclat Consulting said Love Field would add 251 flights a day if Southwest added flights to 15 far-flung cities, but DFW would lose 436 daily flights. DFW's losses would be greater than Love's gains because fewer travelers at DFW would force the scrapping of some connecting flights there.

American's consultant said service to smaller cities in Texas and the Midwest would be eliminated or reduced, while Southwest's new service at Love Field would go to big cities already served from DFW, such as Los Angeles and Chicago.

Southwest dismissed the new study, with spokeswoman Beth Harbin calling it "a continuation of the threats that American has been making." She said repealing the 1979 Wright Amendment would lead to lower fares, stimulate more travel and increase flights to other cities, even from DFW.

American, a unit of Fort Worth-based AMR Corp., and Southwest have been dueling for nearly a year over Southwest's proposal to expand flying at Love Field.

Legislation has been introduced in the House and Senate to repeal the limits at Love Field, but even lawmakers who introduced those bills have said they doubt Congress will act this year.

American argues that if Southwest wants to offer long flights from the Dallas area, it should fly out of Dallas-Fort Worth International Airport.

But Southwest is not eager to take on American at American's strongest hub - American and sister carrier American Eagle operate 800 flight a day there, about four times the service of Southwest's busiest airport. Southwest would prefer to stay at smaller Love Field, where it is the top dog.

American likewise does not want to split operations between two airports 10 miles apart, Eclat said, but not competing at an expanded Love Field would risk losing customers altogether, "a much worse outcome."

Southwest has dressed its flight attendants in T-shirts urging repeal of the 1979 Wright Amendment, and both sides are using television and print advertisements to appeal to the public and Congress.

Like it or not.........

Rules are rules!

Abide by them or face the concequences.

Does anybody know why the Wright Amendment was passed in 79? It doesn't seem to have any reasonable applicability to today's marketplace.

Believe it had something to do with DFW being built.

Here's a brief history lesson. I recommend visiting the sites listed below for the rest of the story. Do keep in mind that the sponsors of these sites have specific agendas regarding the repeal/continuance of the Wright Amendment so read them accordingly.

In 1968, prior to the opening of the Dallas/Fort Worth International Airport, an agreement was made requring any airlines operating at Dallas Love Field, Fort Worth Meacham, Greater Southwest Regional, and Dallas Redbird to move to DFW upon its opening.

When DFW opened in 1973, all the airlines in the Dallas/Fort Worth metroplex moved ... except Southwest Airlines which hadn't started operating until 1971 and was not a signatory party to the agreement.

DFW, Dallas, and Fort Worth sued to have Love Field closed to passenger airlines. However, the Texas Supreme Court decreed that it was impermissable to close Dallas Love Field because the Texas Aeronautical Commission certified carrier, Southwest Airlines, had been given specific permission to operate intra-state flights from that airport.

Though bitter about their inability to close Love, the situation remained intact until Federal Airline Deregulation in 1978. No longer limited to intra-state operations, Southwest began serving New Orleans from Dallas Love Field. Seeing the potential for increased competition, and having had their repeated court cases tossed (including those taken to the US Supreme Court) the DFW parties went to then Speaker of the House and Fort Worth congressman, Jim Wright.

Wright's original proposal was to issue a federal mandate to close Love Field to commercial passenger traffic thereby sidestepping the Court's rulings. (Today this would be called a "nuclear option!") However, such a drastic action did not have enough support to pass in Congress. A compromise was worked out that restricted commercial service from Dallas Love Field to Texas and the neighboring 4 states (NM, OK, AR, and LA.) Several other restrictions were included in the Amendment including through ticketing, marketing, and small-aircraft (<56 seats) permissibility.

With the passage of the Wright Amendment, D/FW was now protected from any meaningful competition that might prevent its developing into a self-sustaining and viable entity. (It may have had a purpose at that time though the true effect of the ruling is debatable in theoretical circles.)

Now, in 2005, DFW is listed as one of the top 5 airports in the world in virtually every category (total movements, total passengers, etc.). It would seem to the reasonable person that the Amendment has served its purpose and is no longer needed.

American Airlines' fares from DFW average 40% more (on a per mile basis) than what they charge from their other hubs. Thus, understandably, you can see the incentive for DFW and AA to do whatever they can to keep the Wright Amendment in place.

Southwest could move to DFW and begin offering long-haul flights. However, the cost of doing so would be excessive and negate the economies that could be realized by utilizing existing facilities at Love Field.

Here are the competing sides' websites:

Set Love Free!: www.setlovefree.com
Dallas/Fort Worth Airport: www.keepdfwstrong.com
A citizen's site: www.fightwright.org (Check out the NPR audio comentary link!)

-- Corl
(Disclaimer: I'm a SWA employee and so read my writings with that in mind. I try to be balanced and level but occasionally I may lean!)

Eclat is Randy Babbit
 

http://www.eclatconsulting.com/bios.htm

As a subnote to this thread it's interesting see that Randy Babbit is CEO of the consulting firm. While his bio says that "...In his capacity as a specialized aviation and labor consultant, Babbitt has been instrumental in advising both airlines and labor unions throughout complex restructuring initiatives and negotiations..." I'm not aware of any labor group that he's consulted, anyone? I do know that he has been proactive in advising UPS on how to stick it to IPA and others. Your ALPA dues dollors at work...and he still has his $350K+ retirement from ALPA. Setting a good example for Duane I'm sure.

It is all pure crapola, and is going to backfire on AA. Each airport has its advantages and disadvantages. If they had an ounce of confidence in their product and a twig of a backbone they would just focus on their services and the advantages of DFW and ignore Love, JUST LIKE HAPPENS IN CHICAGO AND HOUSTON.
What they are doing now is just admitting to the public and the media that they know they can't compete.

I knew It would not take Widows son long to get ugly.

Why does not SWA market their "product? at DFW?
Same could be said about your airline.


As I have said before there is plenty of room at DFW!

Or does SWA have no confidence in their product?
Maybe its a lack of backbone actually competing on level ground?

Windows son .......You make me laugh
You write some of the stupidest stuff.

Ha ha ha ha all the way to DFW
Its bonehead people like you that make your lame cause so damn funny

I'm not yet an airline pilot, but here's my take. Help me out if I'm way off target!

American views Southwest over at DAL, with Wright lifted, as a big threat to its DFW business model. American is only trying to keep competition at bay, lest they lose their fortress hub behind to a sharky competitor like Southwest.

So you can understand it when they (American) commission bogus, in my opinion, studies like the one done by Egaad.

A common tactic when someone simply cannot refute the message is to ignore the message entirely and personally attack the messenger.

It's the DFW airport administration that wants SWA to come there, not AMR. AMR wants SWA to stay federally hobbled at Love. AMR must wince every time DFW makes another sweetheart offer to SWA. The best option for both carriers and the flying public to let each airport and airline to do their respective thing at each airport like is done very successfully for all, at Chicago.

SWA will most likely win the WA war and do just that, and both airlines will do fine. But if not, they will all of a sudden take DFW up on all their freebies and roll into DFW with a vengeance and perform a Texas style whoop assing on AA. SWA could sell every seat for $20 for years without any pain. AA would be BK in months, if not weeks.
There is no possible way to beat a competitor that has lower costs, lower debt, about a 10 billion dollar difference between respective profits and losses over the last few years, hasn't crashed several airplanes, and can borrow with an investment grade credit rating while you have to borrow, if you can find a lender, at junk rates.
Compared to their pathetic peers, AA has the best chance to return to their former glory, but the best way they can assure that is to ignore and let be the sleeping dog at Love.

Yes its a great idea for sure!

Have SWA spend all their money trying to convince everyone
they need "special treatment"
Keep spending your cash SWA , remembering it aint
gonna last forever.
Meanwhile AA will suck up all those premium fares at DFW
to all the cities SWA won't go to from north Texas.

I say "won't " because if SWA wanted to fly they would already be based at DFW.

The door is and ALWAYS has been open for SWA to compete at DFW.

If SWA TRULY wanted to get into "long haul" from DFW
area
they would send a few planes to DFW slap up a sign, have
your silly television crew film everybody having fun fun fun.

But that will never happen!
SWA does not want a fair fight. they want to exploit their Love field Monopoly
by skirting the law.

Your boss is not stupid....... it is far cheaper to try to
change the law than actually "get into the race"

SWA has no interest in flying long haul from DFW.
They just want to harvest the decades old passengers from AA.

As I have said before the law is the law.

I will personally roll out the red carpet for you at DFW.
Just let me know when that will be.


HA HA HA

Assuming most pilots reading this forum are college educated individuals, I would expect most to realize that both SWA and AA are Texas based airlines. That means Texas jobs are at risk. Anyone who thinks that pols will let the Wright Amendment go away anytime before AA starts to make money needs to pull their head out of their crock! I am sure SWA will change their tune about DFW once a few more airlines like jetBlue announce service in/out of DFW. Plus don't forget that AA still hold the rights to 10 or so gates at Love field.

Interesting point. The irony of course is the fact that the repeal of the WA would only increase competition out of DAL since anyone would be free to fly anywhere. I believe the only "monopoly" that would be threatened, is the one 14 miles to the Northwest. :rolleyes:

Just as Love Field has always been open for AA to compete intra-state with SWA! (AMR still pays $350,000/year to Love Field to retain their leases on 3 gates!) :rolleyes:

Seriously, though, take a few minutes and read this study by the Boyd Group. While the link I'm providing is through SWA's "SetLoveFree" website, the actual study is not really supportive of either SWA's or AA's cases. It does, however, highlight the view that both sides of the issue have probably grossly overstated the effects retaining or repealing the Wright Amendment may cause.

http://www.setlovefree.com/reports.html
(Click on the "Michael Boyd Study" to download the 52-page pdf file.)

In particular, I found the description of Love Field's diminishing access to the total DFW metroplex market very interesting. As the metroplex continues to predominately grow west and northwest, Love is becoming less and less the attractive option for travelers. (As a SWA employee this aspect concerns me. However, as an SWA employee I also have confidence that Gary Kelly et al are carefully balancing the costs of moving to DFW vs. the marginalizing of Love Field.)

... until the law is determined to no longer be effective and is changed.

From the testimony of Sen. John McCain to the House of Representatives, Subcommittee on Aviation, Committee on Transportation and Infrastructure, Thursday, February 9, 1995, regarding the perimeter rule that limits the distance an air carrier may fly from Washington National Airport (DCA):

" The second issue I would like to focus my remarks on, Mr. Chairman, very briefly—the perimeter rule as imposed in 1968 as a way of helping Dulles Airport, which at that time was viewed as a white elephant. The perimeter rule—650 miles in distance. Then there was an extension of that perimeter rule; and the history is very clear that it was done by the former Speaker of the House, Jim Wright. And that perimeter rule was extended to 1,250 miles, which, coincidentally, happens to coincide with the western edge of the tarmac at Dallas-Forth Worth Airport."

:rolleyes:

My 2 cents.

I know BOTH sides of the ring are slinging as much
mud the other way as possible.

SWA wants to "move freely" through the USA. I can see that
the W.A. is a real thorn in their side. If I was a SWA flyer I would scream
unfair as loud as I could. Honestly it a dated rule. I think after
the mud dried off the walls both sides would probably say
"WOW that wasn't so bad was it?'

But I am on the other side so I need to fight for my team.
(and my job)

Both AA and SWA have very valid points, I think SWA would probably
make out better in the long run.
Anytime you loose customers to another carrier there is some
money lost. AA has a good grip at DFW, I do not follow the price war on a daily basis.
But the people I talk to in the back seem to be happy with their purchase
price. I base this as a full airplane and people still at the gate.

SWA has a wonderfull product to sell. Anybody that gets their paycheck
from them ought to be very gratefull for what they have. Just look around at the Airline war zone across the country.
AA is also a wonderfull company. I am still proud to put on my uniform and go to work. I am concerned with our "collective" airline future.
That is ALL CARRIERS.
It is really a crap shoot as to where your Company will be in Twenty years.

When I got hired at AA I had a friend that I helped get on at AA also.

He also interviewed at SWA nearly the same week as AA.

I was TOTALLY shocked when he told me he was going with SWA!

Now look at us. I am commuting to bottom line holder/reserve status in STL.
He is probably Captain by now.
Who took the right road?

Then AA was the way to go, today SWA seems like a steamroller.

Its all a gut feeling and a roll of the dice.

GOOD LUCK to all of us!

Touché my Brother, touché.