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Old 06-06-2005, 10:38 AM   #1  
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Default Logic lacking from Wright backers

from the Dallas Morning News:

Logic lacking from Wright backers
by Mark Davis
12:02 AM CDT on Wednesday, June 1, 2005

Those who join me in calling for the unplugging of the Wright amendment share two beliefs.

First, an open marketplace for Southwest Airlines (and others) at Love Field would bring American Airlines fares down at D/FW International Airport, and second, AA and D/FW can withstand that competition and perhaps even benefit from it.

The factions fighting to keep the shackles of Wright on the flying public have two replies:

1) The "Southwest effect" would be so meager that the fare reductions would not be as thrilling as people say, and

2) Opening Love Field would be a seething disaster for American and D/FW, wounding the local economy for heaven knows how long.

Anyone notice that those two are contradictory?

Wright amendment proponents need to make up their minds. Love Field is either so small that it cannot spur lower fares at D/FW, or so dauntingly large that it will cripple one of the planet's largest airports and one of its biggest airlines.

This is the irrational bed Wright's advocates have made for themselves, wrapping themselves in its quilts of outdated logic and concocted fears.

Wright made sense when it passed in 1979. D/FW Airport had to have every chance to flourish; there was simply too much invested in it to subject it to the vicissitudes of the marketplace.

The success Wright helped create at D/FW is now the best argument against keeping the law. The voices at American and at D/FW invoke apocalyptic economic doom if little Love Field opens up, and most people have correctly shaken their heads in disbelief. How odd is it that those of us looking to scrap Wright have more confidence in AA and D/FW's future than their own leadership seems to have?

D/FW is one of the world's great airports. American is one of the greatest airlines in the history of aviation. 9-11 knocked them both against the ropes.

The best road to recovery for all airlines and airports comes not from stifling competition, but from additional years of safe skies and a strong economy, so that more and more people can conjure the confidence and money to fly.

The best point Wright supporters make is that Love Field should have simply shut down when D/FW opened for business.

Well, it didn't, and we don't have that magic time tunnel to take us back to relive the history that drives Wright's fan base nuts more than a generation later.

In a textbook case of the pot calling the kettle black, former AMR CEO Robert Crandall has scolded The Wall Street Journal for its pro-consumer stance that Wright should be overturned, arguing in a recent letter that Southwest has enjoyed "a unique monopoly position" at Love Field.

American can fly from Love anytime it wishes. Meanwhile, those Southwest fliers are really getting gouged, aren't they? You can see them grimace as year after year they make Southwest the rarest of all corporate species – a profitable airline.

If you want to see monopoly pricing, examine American's fares to various cities from D/FW, and then compare them with the cost of the trip from any other Texas city where Southwest is a direct competitor.

This proud, massive airline and a very proud, massive airport are following understandable instincts: They are fighting for their bottom line. But the scare tactics must stop and Wright must go. It is ridiculous to dwell on bad blood and what-ifs from the era of disco and bell-bottoms.

After D/FW and AA shake off an initial sting, lower fares will create more demand for flights to and from the Dallas-Fort Worth area. As the vast majority of our area's growth extends north and west, D/FW will remain the favored airport by a vast majority of fliers.

Reps. Sam Johnson and Jeb Hensarling have boldly introduced the Right to Fly Act, which would repeal Wright immediately. There is no excuse for any Texas member of Congress – especially not the Republicans, who are duty-bound to support free markets and consumer liberty – to stand in its way.
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Old 06-07-2005, 06:05 AM   #2  
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Default Davis Rebuttal

SWAjet,

Mark Davis is a morning DJ for WBAP here in Dallas. He will debate our former CEO, Bob Crandall, this morning between 9 and 12. If you want to follow the debate, you can go to the following link to hear it live.

http://www.wbap.com/

Here is my letter to Mr. Davis,

Mr. Davis

I usually agree with most of your views, but on the Love Field debate we are on opposite ends of the spectrum. Make no mistake about it, Southwest is trying to fly out of Love for one simple reason – they want to drive a dagger into the heart of American Airlines.

Mr. Davis, do you know that Southwest has most of their fuel hedged for the next two years in the $24-$26 price range while American is paying the going price in the high $50’s. The $24 -$26 fuel hedges run out in a couple of years. Mr. Kelly knows he has a limited window of opportunity with a major price advantage, hence the move now to open up Love Field.

You also seem to think DFW and American “will just be fine” if Southwest wins. Mr. Davis, surely you know the precarious financial footing that American has been operating on since 9/11. Our employees have taken severe paycuts on the magnitude of 23%-40% to help keep our company out of bankruptcy. Many, many jobs in the metroplex have been lost at our airline. Our management has made great strides to cost our costs, yet due to the high fuel costs we are just barely keeping our heads above water. I hope you realize that our airline can not even afford to put pillows on the planes anymore. We are just now starting to see the fruits of our labor.

Meanwhile, DFW has taken on billions in new debt building both a drastically needed new international terminal and airport train the last few years. Now you and other misguided congressional leaders want to let Southwest have their cake and eat it too. You want to help one of the few strong airlines and body slam American just as we are just getting back on our feet.

Wise leaders sought to prevent this type of airport turf battle by drawing up the Wright agreement years ago, but Southwest has constantly tried to jump through legal loopholes to keep their monopoly going in North Dallas.

The sad fact of this matter is that if Southwest wins, either American loses many of their best customers in North Dallas, who will choose the shorter commute to Love Field, or American will have to split their operations (which will cause an enormous rise in operating costs) to compete with Southwest over at Love.

What is lost in this argument is that Southwest is free to come right over to DFW and fly anywhere in the US. There are plenty of open gates. Yet, it chooses to stay at Love. Now ask yourself, why doesn’t Southwest want to move to DFW?

Yes, we all love cheap tickets, but is the support for Love field worth putting American into bankruptcy or having double the airline traffic at Love? Will this be better for the metroplex? Ticket prices are already hovering near a 15 year low. American, its employees, and the DFW Airport Board have made enormous investments and upgrades to DFW airport and the local community based on keeping the Wright Amendment intact. Now you want to pull the carpet from under our feet. This is a case where one company wins all the marbles while the other one gets screwed. How fair is that?

Like I said, I enjoy your show, but your support for Southwest will have severe repercussions for American and its employees. Unfortunately the fallout will be felt around the Metroplex. I hope you reconsider your stance.

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Old 06-07-2005, 10:59 AM   #3  
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Quote:
Originally Posted by AA767AV8TOR
SWAjet,

Southwest is trying to fly out of Love for one simple reason – they want to drive a dagger into the heart of American Airlines.

AA767AV8TOR
YGTBSM. All this from the the airline that reconfigured it's F100's to 56 seats to "compete" with Legend Air. As soon as AA drove the dagger in the heart of Legend, it packed up and went back to DFW. And now YOU are crying foul?

Quote:
Mr. Davis, do you know that Southwest has most of their fuel hedged for the next two years in the $24-$26 price range while American is paying the going price in the high $50’s. The $24 -$26 fuel hedges run out in a couple of years. Mr. Kelly knows he has a limited window of opportunity with a major price advantage, hence the move now to open up Love Field.
Inaccurate. We have significant hedging out through 2009. Additionally, we are continuing to acquire further hedging as the marked warrants. They don't "run out". Therefore your thinly laced theory that we are doomed without the end of the WA because of no more fuel hedging is not supported by fact. Or reason.
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Old 06-07-2005, 12:25 PM   #4  
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Here is a summary of the arguments:

AMR employees understandably don't want their airline to suffer from the competition SWA would bring to many lucrative AA DFW-? routes. So they're willing to make any argument EXCEPT that customers would largely benefit by the reduced fares and greater choice of flights/carriers. (any argument that AA would go under is absurd).

SWA employees want to be able to fly anywhere they want to, and a federal law banning them from certain city pairs flies just isn't right in 2005.

There ya have it.

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Old 06-07-2005, 01:11 PM   #5  
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AA is going to lose on this where it matters most which is the court of public opinion. The sooner they realize this the quicker they can lessen the damage.
AA had fuel hedges but they were cashed in to fortify the management pension plans. That isn't the AA employee's fault, but neither is it SWA's fault. AA has the cost advantage of lower wages. AA is a great airline with a great global network. If they can't compete in Texas on a level playing field then they might as well shut down now because they will never compete anywhere.
Their own doctored study showed airfares falling 50%, they just left that part out. The people of Texas aren't stupid, only a lot of the legislators and officials at DFW.
The best thing AA can do is drop this stupid facade and simply compete on their strengths like they do in Miami and Chicago. When that happens traffic will increase for everyone just as it has everywhere else the "Southwest effect" has taken hold. Delta and USAirways have already proven that raping the public is not in the best long term interest.
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Old 06-07-2005, 04:47 PM   #6  
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Not trying to sound like a skipping CD but,
AS I HAVE SAID BEFORE AND WILL SAY AGAIN....IF SWA WANTS TO FLY LONG HAUL COME ON OVER TO DFW AND SET UP SHOP.
ASK ANY DELTA EMPLOYEE, THERE IS PLENTY OF AVAILABLE GATES AND ROOM TO OPERATE.
I know it and so does EVERYONE else SWA and ONLY SWA wants to kick out the Wright FOR THEIR BENEFIT.

I just want to vomit on your cockpit floor when I hear all the business about

"This is what the customers want"

BULL**** This is what SWA wants.



I have a final soultion for this matter.
Repeal the Wright law CLOSE LOVE FIELD. to ALL AIRLINE TRAFFIC
and have EVERYBODY operate from DFW.
No more bickering one airport fits all, everybody moves the speed of the slowest airplane.
Try that shoe on SWA!
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Old 06-07-2005, 05:10 PM   #7  
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The door will be open (and always has been) open for ALL INTERESTED airlines
to operate out of DFW.
SWA has no interest in"adding competition" to the north Texas market,
They just want to skate the existing law whine and cry and make a quick buck.

My offer is this:
If SWA TRULY WANTS to offer all of USA flying from north texas,
Do what EVERY OTHER AIRLINE DID 30 years ago.
MOVE TO DFW.
I say this :
"PUT UP OR SHUT UP"
GET OFF YOUR CHECKBOOK AND COME PLAY WITH THE BIG BOYS
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Old 06-07-2005, 08:49 PM   #8  
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Quote:
everybody moves the speed of the slowest airplane.
And you wonder why you're loosing money.

Quote:
If SWA TRULY WANTS to offer all of USA flying from north texas,
Do what EVERY OTHER AIRLINE DID 30 years ago.
MOVE TO DFW.
Like I posted to you in another thread; We won't move to DFW for the same reasons we left DEN, SFO, and IAH. WAY too much pain (reference your post above) for the buck.

Quote:
"This is what the customers want"

BULL**** This is what SWA wants.
True on both counts. We want this because this is what the customers want. It makes good business sense.
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Old 06-07-2005, 09:02 PM   #9  
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Quote:
I know it and so does EVERYONE else SWA and ONLY SWA wants to kick out the Wright FOR THEIR BENEFIT.
Yes, you are correct. This is supposed to be a capitalist society.

Next.

Let me ask you again (from another thread); we pack up and move to DFW. We are now saddled by the same exorbitant leases and flow delays that you are. Now what? Feel better? You seem to advocate the best course of action if someone has fallen over a cliff is to not change course, but to jump over with them.

I post this once more as proof;

Quote:
everybody moves the speed of the slowest airplane.
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Old 06-07-2005, 09:33 PM   #10  
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The bottom line is MONEY.
It is FAR CHEAPER to attempt a change in the law than compete head to head
as in SWA DFW to ORD equals 159.00 dollars
AA DFW to ORD equals 159.00 dollars

I would surely get on your bandwagon if it made MY COMPANY millions of dollars.

As I have stated before SWA is NO DUMMY.
They know that they have it good right where they have it (Love )

I just can't stand the BS and out and out LIES that come from the "Free Love"
camp.

You an I both know that SWA/DFW is stupid.
Your proposal to free up Love field ONLY benefits SWA.
I don't care how much shoe polish you rub on it.

Here is my take on the whole deal.

SWA wants to open up Love for THEIR BENEFIT not the customers or North Texas.
They want to operate UNOPPOSED in their sandbox.
I say CLOSE LOVE.
AND EVERYBODY MOVE TO DFW.
That way no more squabbling.
I know damn good and well that SWA WILL NOT go for that. AND SO DO YOU.

If SWA said what they REALLY MEAN then I could possibly understand your point.

The "FREE LOVE" camp needs a ad like this:

Tired of getting dicked by AA?
Well come on over to our Lovely field, Friendly TSA, smiling employees, and maybe even star in our own television show! We will jet you off to exotic locations like DEN and LAS or maybe even LAX! And when the smoke clears from this Wright Amendment snafu we will raise prices to the same as you had it at DFW. So Come-on over it will be fun-fun-fun.

Open up Love field benefits 1 company.
Leaving the Wright Amendment alone benefits ALL companies
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