28.5.05

GUEST BLOGGER: Herb Kelleher

Let us fly - for the consumers' sake

The old goofiness

The goofiness of the Wright amendment is encapsulated by the passenger who told me Southwest was an "idiot" because it was headquartered in Dallas but didn't offer any air service between Dallas and Phoenix, even though he was willing to connect in El Paso.

Prior to the Wright amendment, Harding Lawrence, the CEO of Braniff, stated on a radio show that Dallas/Fort Worth International Airport was already a tremendous success, and that its principal problem was? Congestion!

What 'deal'?

Southwest located its headquarters in Dallas because Dallas had most of its flights. But, today, Dallas is dropping fast in rank as Love Field traffic and flights decline subsequent to 9-11.

Immediately after Southwest began service at Love Field, the "D/FW parties" began a series of lawsuits to oust Southwest from Love Field.

This litigation was brought under the Dallas and Fort Worth 1968 Concurrent Bond Ordinances. These ordinances did not provide that Love Field would be "closed" (another urban myth). Instead, they provided that, if "legally permissible," air carrier service would be "phased out" at Love Field. The federal courts twice held that this provision of the 1968 Concurrent Bond Ordinances was not "legally permissible." Thus, Dallas did not "welsh" on any commitments to Fort Worth or D/FW Airport: The federal courts declared those commitments legally unenforceable.

Subsequently, in 1978, the airline industry was deregulated. Having lost in the courts, the D/FW parties turned to Jim Wright, then the majority leader of the U.S. House from Fort Worth, to restrict Southwest's Love Field service. Southwest opposed any restrictions on Love Field air service and a multi-month political battle ensued. Jim offered a "compromise" permitting nonstop Love Field air service within Texas and the four states adjoining it. Southwest was told by its congressional supporters that it was either Jim's "compromise" or "nothing"; so Southwest took something over nothing. There was no Wright amendment "deal." There was just the application of political power to curtail Southwest's Love Field air service.

Also, as Al Casey, then CEO of American Airlines, recounts in his memoirs, American moved in 1979 solely to get much cheaper headquarters space in Fort Worth due to a tax-free bond deal.

The modern goofiness

The Wright amendment was supposedly pushed through to protect D/FW Airport (i.e., the carriers serving D/FW). That was 26 years ago; D/FW is now the third-busiest airport in the world and dominated by American, the world's largest carrier (no more Braniff and virtually no more Delta). But Southwest still cannot even provide one-stop, single-plane or normal connecting air service between its headquarters city and points beyond the Wright/Shelby amendment states (yes, the Wright amendment can be amended: Sen. Richard Shelby, R-Ala., amended it to add three more states).

Dallas County reaped $15 million in taxes from Southwest in 2004, since Southwest's entire aircraft fleet is taxed in Dallas, not Fort Worth. Our air services are restricted, but our tax payments aren't.

The Dallas Love Field Master Plan, approved by the FAA, limits Love Field to approximately one-fifth the size of D/FW. All parties to the master plan, including neighborhoods and American Airlines, approved this size for Love Field and the amount of commercial air service it can support.

Fares at D/FW are competitive within the Wright/Shelby amendment states but are woefully noncompetitive beyond those states.

According to a Dallas Morning News poll in 1997, an overwhelming majority of the people in Dallas, Collin, Denton and even Tarrant counties favored repealing the Wright amendment. Only D/FW lobbyists stand against the people's will.

A nonstop perimeter rule was adopted at Reagan National Airport to encourage growth at Dulles International Airport. American Airlines lobbied successfully to have the Reagan National perimeter expanded. Apparently, what's good for the Northern Virginia goose is evil for the metroplex gander. Furthermore, no perimeter rule has ever included the goofy marketing and ticketing restrictions of the Wright amendment.

American lowered its fares at Miami in order to compete with low-fare service at nearby Fort Lauderdale and reported more passengers and revenues by doing so. Why, then, will lower fares at D/FW, produced by modestly enhanced competition from Love Field, harm either the airport or the airline?

Conclusion

Southwest does not intend to harm D/FW Airport or any of its air carriers. If that baseless concern persists, however, then the Wright amendment could be gradually, in steps, phased out over a period of years, starting with its unprecedented and goofy marketing and ticketing restrictions.

Dallas has a reputation as a free-market, free-enterprise city. Does that reputation square with the 26 years of restricting Love Field in order to protect the carriers at D/FW so that they can impose higher fares on the public?

If the goofiness does not stop after 26 years of protectionism, when will it end?
The time is now!

Herb Kelleher is co-founder and executive chairman of the board of Southwest Airlines. His e-mail address is wright.amendment@wnco.com.

reprinted without permission. copyrighted © 2005 Dallas Morning News.

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