Is Wright Wrong?

American Airlines and Southwest Airlines are at war over the law restricting flights out of Love Field. I know who’s right: The customer, as always.

IF THE CIVIC AND BUSINESS LEADERS of Dallas and Fort Worth had gotten their way back in the sixties and seventies, the flight I took to Love Field on a steamy morning in late August would not exist today. Nor would Southwest Airlines, the nation’s largest (in terms of the number of domestic passengers boarded), richest, and most profitable commercial carrier. Every flight headed for the Metroplex—a graceless coinage if ever there was one—would be required to land at Dallas—Fort Worth International Airport, which opened in January 1974 on a plot of prairie between the two major cities that is larger than the island of Manhattan.

It is a familiar story by now that Southwest’s co-founder Herb Kelleher had to wage a twelve-year legal battle, from 1967 to 1979, against DFW’s two namesake cities and two airlines with now-forgotten names, Braniff and Texas International, to keep Love Field open. (Dallas even went so far as to make it a crime to land a commercial aircraft at Love Field.) Twenty times Southwest went to court and twenty times was victorious. No sooner had the final case been decided in its favor, however, than victory was snatched from its grasp by an act of Congress: the once-obscure but now suddenly famous Wright Amendment, fashioned by then— U.S. House majority leader Jim Wright, of Fort Worth, in 1979. The amendment, passed in response to Southwest’s just-inaugurated route between Love Field and New Orleans, restricted interstate flights from Love to the four states that border Texas; the planes could continue to remote destinations but the passengers who embarked at Love Field could not. The legislation addressed the nightmare scenario of the DFW-based airlines that one day Southwest, whose operations were largely limited to Texas at the time, would want to fly long-distance routes from Love that would draw Dallas passengers away from DFW. To retain them, airlines like American would have to start operating flights from Love Field, and the whole idea of a major hub airport that benefited the entire region could begin to unravel.

That day has come. Southwest has mounted a nationwide campaign to repeal the Wright Amendment. Banners supporting the campaign—reading “Wright Is Wrong” and “Set Love Free”—festoon the terminal at Love Field and the employee entrance to Southwest’s headquarters on the west side of the airport. The Wall Street Journal supports repeal. So do the Salt Lake City Chamber of Commerce; the City of Manchester, New Hampshire; and the Nashville Convention and Visitors Bureau. Legislation to that effect has been filed in both houses of Congress. Meanwhile, the opposition—the two cities that operate DFW, the airport board, and American Airlines, which, following the capitulation of Delta, now accounts for 84 percent of the departures from DFW—is mobilizing for a long confrontation that will be fought on three fronts: politics, law, and public relations.

The central issue is a familiar one in American business, particularly in industries that must deal with government regulation: Which is more important, low cost or reliable service? Before you answer “low cost,” consider what can happen when service isn’t reliable (and the cost isn’t low), as was the case in electric deregulation in California. In the airline industry, which was deregulated in 1978, the development of major hubs like DFW, which tend to be dominated by a single carrier, has not been conducive to low fares, but it has brought about a remarkably efficient transportation network. And yet, the airport with the greatest domination by one carrier, Love Field, also has the lowest fares in the country.

To be sure, no airline has profited more from the absence of competition at Love than Southwest. If the fledgling airline was legally barred from competing with DFW’s long-haul carriers, the long-haul carriers couldn’t compete economically with Southwest’s lucrative short-haul routes to Houston, San Antonio, Austin, and other Texas destinations. The amendment gave Southwest what amounted to a monopoly at Love Field, because although any airline could choose to operate flights at Love, the Wright Amendment rules made it impractical and inefficient for them to do so.

For Texans who live far from the Metroplex, the looming battle may not seem to have much impact. But it will. If you live in any of the cities where American provides connecting flights to DFW, the repeal of the Wright Amendment would mean reduced service at your airport. American says it will be forced to shift some flights to Love to compete for its Dallas passengers, leaving fewer flights at DFW to choose from. The biggest positive impact, of course, will be in the Metroplex itself. Southwest brandishes a study showing that if it is allowed to fly to fifteen major markets from Love Field—among them Baltimore, Chicago, Las Vegas, Orlando, and St. Louis—the competition and resulting lower fares could generate almost 3.7 million new passengers, roughly a fourth of whom would have North Texas as their final destination. The annual economic benefit to North Texas could be $1.7 billion. Add in the benefits to the fifteen markets of additional passengers, plus the savings from Southwest’s lower fares, and the “Total Wright Amendment Penalty” (as Southwest puts it) to the United States is $4.2 billion.

But American has an economic argument of its own. DFW is arguably the region’s greatest asset. The airport recently undertook a $2.5 billion capital improvements program and issued $1.46 million in revenue bonds. It is the third-busiest airport in the world, boarding 53 million passengers last year (dwarfing Love’s 2.3 million, as calculated by Southwest). It has stimulated development throughout the midcities region—hotels, malls, corporate headquarters, highways, entire new cities that seem to sprout up overnight. To expose DFW to competition from Love Field puts the North Texas economy at risk. Cities with more than one airport tend to have fewer daily departures and fewer available seats per million people than single-airport cities like Atlanta. As American likes to say, “Airline competition is good. Airport competition is bad.”

To which Southwest replies, “Tiny Love

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