Airlines Oppose Wright Amendment Compromise (Video)

nbc5i.com ^ | 11:38 am CDT June 28, 2006 | Staff

[Paleo Conservative]

FORT WORTH, Texas -- The Fort Worth Star-Telegram reports JetBlue and Northwest Airlines will actively fight the Wright Amendment compromise reached by American Airlines, Southwest Airlines, and D/FW leaders.

The Star-Telegram reports the airlines claim the compromise was hatched in a back room and would stifle competition.

Just as the mayors of Dallas and Fort Worth huddled in Washington with airline executives and congressional leaders, word of the first opposition takes flight.

JetBlue and Northwest said they were never invited to the settlement talks.

The compromise, opening up Dallas Love Field to nationwide flights over eight years, was struck between rivals Southwest Airlines, American Airlines and Dallas/Fort Worth International Airport.

"This is an anti-competitive deal that was put together by two carriers in a back room. JetBlue would like to serve Dallas at Love Field, but under this, we wouldn't be able to get any gates. Nobody would," an executive with JetBlue told the Star-Telegram.

Under the compromise, Dallas Mayor Laura Miller would close a third of the gates at Love Field, leaving only a handful of gates for Southwest's competitors.

Back in Washington, the city leaders and executives of American and Southwest are trying to get Congress to sign off on the deal before it recesses in just 19 days.

"We're asking them to help us move that product through the legislative process," Fort Worth Mayor Mike Moncrief said.

"I'm very optimistic. The House has promised to move expeditiously, and we hope to get the same commitment from the Senate and that will make a big difference," Miller said.

A congressional hearing on the Wright Amendment is set for July 12.

The big question is: With the major players in agreement, will the complaints of other airlines be enough to put the deal in jeopardy?

[Paleo Conservative]

Posted on Thu, Jun. 29, 2006

JetBlue chief: ‘Stop the deal’

By MARIA RECIO
STAR-TELEGRAM WASHINGTON BUREAU

WASHINGTON — The campaign to block the Wright Amendment compromise picked up steam Thursday as JetBlue’s top executive, David Neeleman, asked key members of Congress “to stop the deal,” and Delta Air Lines joined the list of carriers concerned about being locked out of Dallas Love Field.

JetBlue’s activism might even land it a spot at the July 12 hearing before the House Transportation and Infrastructure Committee’s aviation subcommittee.

“We generally have very balanced witness lists,” said Steve Hansen, committee spokesman. “So that’s very possible.”

In a strongly worded letter dated June 29 and sent to the top members on the Senate and House panels overseeing aviation, Neeleman complained that the deal reached by Fort Worth and Dallas, American Airlines, Southwest Airlines and Dallas/Fort Worth Airport amounts to a “private deal” that undermines interstate commerce.

“The deal announced in Dallas on June 15th merely seeks to replace one outdated regulation with a series of anti-competitive provisions that eliminate competition and protect a few select carriers, while permanently destroying one-third of all of the gates at a vital airport in a major city — one JetBlue wishes to serve if the Wright Amendment is repealed,” said Neeleman, JetBlue’s chairman and chief executive.

The Wright Amendment limits service out of Love Field to cities in Texas and eight nearby states. The proposed compromise would end flight restrictions after eight years and reduce the number of gates to 20 from 32, but allow immediate through-ticketing for passengers. Under the deal, Dallas would acquire and demolish the old Legend Airlines terminal, eliminating the potential for those gates to be used.

Thursday, the D/FW Airport board unanimously approved the final accord that calls for the eventual repeal of the Wright Amendment. The accord is a more detailed version of the joint statement that the two cities, the airlines and D/FW Airport signed June 15.

The Dallas City Council approved the accord Wednesday night, and the Fort Worth council is expected to vote on it July 11. Officials for Southwest and American said Wednesday they plan to sign the accord as soon as they receive it.

Ultimately, Congress needs to turn the accord into legislation and pass it by the end of the year or the deal is dead. Sen. Kay Bailey Hutchison, R-Texas, plans to file a bill when Congress returns from the July 4 break.

Neeleman said that if Congress approves the deal, it would be “playing favorites” by giving American and Southwest a lock on competition.

Other carriers have begun speaking out, too.

“We believe our nation’s aviation system serves customers best when fair and equitable competition is encouraged,” Delta spokesman Anthony Black said. The Atlanta carrier joined Northwest Airlines and an association of low-cost carriers that are concerned about the agreement, although it is not actively working against it.

Delta shuttered its D/FW hub in 2005, leaving the airport’s terminal E virtually empty.

Neeleman questioned the legality of Love Field receiving federal grants seeing as airports “must be open to all carriers.” According to Robert Land, JetBlue’s senior vice president for government affairs, the carrier plans to file a formal complaint with the Federal Aviation Administration.

“We intend to communicate our views to the FAA,” Land said. “Neeleman has had verbal communications with senior FAA officials.”

Parties to the deal, including the mayors of Fort Worth and Dallas, have defended the provisions and warned Congress that the provisions cannot be altered or the whole package will fall apart.

However, the accord already has been slightly altered. For example, the final accord would now allow airlines to make international flights as long as they stop in one of the states within the Wright Amendment boundaries.

[Paleo Conservative]

If you want on or off my aerospace ping list, please contact me by Freep mail.

[KneelBeforeZod]

anyone have experience with this airline? I hear they have great fares to Australia.

[Yo-Yo]

LOL

[cowtowney]

Consumer Ripoff Alert. Why are they afraid of competition.

[Energy Alley]

This "deal" was a scam. It was unacceptable to both American and Southwest - but they both knew it would never clear the Congress so they signed up just to get the local yokels and the Texas delegation of their collective ass.

Wright is dead, and its death will be as black bag as its creation. The repeal will just be added to an unrelated bill and passed uneventfully.

It will be a great victory in the war on communism as the pax will decide from where they depart and not central planners like those behind the DFW fiasco.

[Paleo Conservative]

I was pricing international travel starting from both DFW and DAL for Christmas day. It's a lot cheaper to fly from DAL to IAH and then to Europe and back to IAH and CRP than to fly from DFW to Europe and return to CRP. My mom's family has a big Christmas Eve celebration that rotates between her siblings homes in the Dallas-Fort Worth area so I wouldn't need to start a trip from Corpus. In some cases the price quotes were $1k higher to return to Corpus than to return to DFW. I don't really like the idea of buying separate tikets for each leg in case there are delays that would cause me to miss a connecting flight.

[billbears]

LOL, no as a matter of fact I took that airline I believe last month on a flight from Raleigh to New York. In a commuter jet. Don't know if it was the screaming child (which didn't shut up the entire time) or the cramped seats but I know I'd fly it again. It was just so much fun....

[Paleo Conservative]

This "deal" was a scam. It was unacceptable to both American and Southwest - but they both knew it would never clear the Congress so they signed up just to get the local yokels and the Texas delegation of their collective ass.

I think Southwest should be required to interline baggage with other carriers at HOU and DAL. If the Wright Amendment were repealed, it wouldn't benefit the vast majority of Texans who don't live in either the D/FW or Houston metropolitan areas as much as it benefits residents of D/FW or Houston. Even though JetBlue is starting flights from HOU to JFK, I can't check my bags in CRP on Southwest and have them forwarded to JetBlue and then to another carrier all the way to Europe. No airline could possibly compete on the intra-Texas routes to and from DAL and HOU. I don't think Southwest should be allowed to use that monopoly to prevent competition on other routes from those airports. It's really not much different than the way Ma Bell used to discriminate against competitors to AT&T's long distance service. Sure I could get a round-trip ticket to HOU pick up my bags and check in on another airline, but what happens if my bags get misplaced and I miss my connection? I wouldn't mind paying extra for the service.

[Energy Alley]

Southwest only has a monopoly at LUV because of the Wright Amendment. With it abolished other airlines will flock to Love Field and the fourteen other gates.

Also, with the Wright Amendment abolished a strong case can be made for scrapping the master plan and recommissioning additional gates currently being used as office and storage space. It would be nice to see LUV return to its pre-DFW capacity.

[Paleo Conservative]

Southwest only has a monopoly at LUV because of the Wright Amendment. With it abolished other airlines will flock to Love Field and the fourteen other gates.

But the competitors won't be flying to any of the small markets Southwest flies to in Texas. Sure they'll fly to New York and LA and various cities in Florida, but they won't fly to the smaller markets in Texas. Southwest could flood any of those markets with enough capacity to drive out any competitor. I don't think those cities will be well served if passengers can't have their baggage forwarded to another airline in DAL or HOU. Southwest isn't just a small airline with three planes flying between the three largest cities in Texas anymore. It ranks #1 in number of passengers and #2 in passenger miles.

[Paleo Conservative]

It would be nice to see LUV return to its pre-DFW capacity.

I doubt the residents of Dallas will be willing to have large numbers of flights at night.

[Energy Alley]

American and Continental will.

[Paleo Conservative]

American and Continental will.

They fly to different hub airports with smaller commuter jets that have a much higher CASM than Southwest's 737's. Have you priced flights that connect through American, Continental, and Delta's commuter jet code share airlines?

[Energy Alley]

That doesn't have anything to do with Southwest - each airline plans their fleet and routes as they see fit and may charge as they wish. Some do it better than others...

[Energy Alley]

I doubt the astroturf anti-LUV groups bankrolled by American and DFW will remain in business after the repeal and the loudest planes to operate out of LUV are old clunker business jets too light to be governed by noise restrictions.

DFW is so skilled in alienating airlines that any new service to the metroplex will have to be at Love Field.

[Paleo Conservative]

But it has to do with how well smaller markets are connected to every place else. In some ways we had better service in Corpus back in the 1970's. Most of the flights were in 727's and DC-9's, and they went to airports like IAH and DFW that had lots of opportunities for connections. Now the only planes of that size the fly into CRP, and they only offer connections to other Southwest flights. It used to be possible to fly from CRP to IAH on the first morninig Braniff flight and continue on the same plane from IAH and arrive at LGY in New York before lunch time. Flights like that don't just benefit the passengers. They allow businessmen to have meetings with investors more efficiently.

[Energy Alley]

So what do you want an american Aeroflot?

[Paleo Conservative]

So what do you want an american Aeroflot?

No. I just want to have the option to have my baggage forwarded. I would be willing to pay for the service. I think airlines should not be able to use there monopoly service to particular airports as a barrier to competition at other airports. I don't think secondary markets are as well served by airline service as they were a few decades ago.

Back in 1982, as a condition of dropping the MCI antitrust case against AT&T, the Bell operating companies were required to allow the same level connections to competing long distance as AT&T's connections had. I'm not even asking for that. I'm just asking for the ability to check in baggage in my home airport and pick it up at my destination regardless of which airlines I go through even if I have to pay extra for that service.

Currently CRP has four passenger airlines. Each one is the monopoly service to a particular hub airport. Continental Express flies to IAH; American Eagle flies to DFW; Atlantic Southeast Airlines (Delta) flies to ATL, and Southwest flies to HOU-DAL. All the airlines other than Southwest flying from CRP have interline service to all the other airlines at those airports. In fact if they didn't have interline connections, the DOJ would prosecute them on antitrust violations. Southwest wants it both ways. They want to continue operating out of an airport that was supposed to be shut down for airline service while cutting out all the potential entrant competitors gates and not allowing interline baggage except to their favored partners ATA.