Southwest says U.S. law makes passengers overpay

Wright Amendment bars Love Field flights to or from 42 states

June 11, 2005|By Meredith Cohn | Meredith Cohn,SUN STAFF

As Southwest Airlines has grown into the nation's dominant discount airline, overwhelming the competition at Baltimore-Washington International Airport and forcing other carriers to match its low-cost model, the one place it hasn't been able to expand is in its hometown.

For 26 years, a federal law named after a former speaker of the House has limited where Southwest can fly from Dallas Love Field, a move made to protect Dallas-Fort Worth International Airport when it was new. Today, DFW is five times Love Field's size and is dominated by Fort Worth-based American Airlines.

Southwest released a report this week contending that passengers at BWI overpay by $43 million a year because of the restrictions on interstate flights into Love Field. Passengers from 15 airports studied overpay by $1.8 billion, the report said.

A move by two Texas congressmen to repeal the Wright Amendment is facing stiff opposition from other lawmakers and rival airlines armed with studies showing potential economic turmoil at DFW and from neighbors who oppose more noise and pollution.

"Ironic is a good word," said Ron Ricks, a Southwest Airlines senior vice president. "Congressional law says we can't fly to 42 states from Dallas. And in a deregulated environment, does it make sense to regulate one airport? From a policy standpoint, this is a no-brainer for people."

A ticket to Love Field from anywhere can cost at least twice Southwest's regular fares because passengers must buy two tickets, one to an airport in one of seven states allowed to have service to Love Field and another from there to Love Field.

The airline cannot sell connecting flights. To fly to Dallas directly, most passengers must fly to Dallas-Fort Worth, where American Airlines maintains a hub with more than 800 daily flights, four times the number Southwest has anywhere.

American Airlines and congressional supporters of the Wright Amendment, including Rep. Joe L. Barton, a Texas Republican, contend that lifting the ban would harm the North Texas economy.

"It has been made clear that repealing the amendment would jeopardize tens of thousands of jobs at a strong and growing airport only to provide a risky gamble for an antiquated airport that has no room for growth," said Brooks Landgraf, Barton's spokesman.

Barton has vowed to defeat the bill, introduced last month by Reps. Sam Johnson and Jeb Hensarling, both Texas Republicans.

Officials at American contend that Southwest can compete with it directly in Dallas. With Delta Air Lines' retreat from its hub at Dallas-Fort Worth in January, gates are available there, and the airport has courted Southwest with financial incentives.

Southwest has declined the airport's offer, saying it couldn't operate as many flights as the airport is demanding in exchange for the money. Southwest also notes that it has invested heavily in Love Field and that being there fits with its strategy of serving mostly less-congested airports.

Ricks also said that going head-to-head with American, the world's largest airline, at such a large hub would not be profitable. Southwest had an easier time taking on the financially struggling US Airways in Baltimore, Pittsburgh and Philadelphia because that airline couldn't afford to undercut Southwest's prices.

Tim Wagner, an American Airlines spokesman, pointed to a recent study conducted by its supporters showing that repealing the Wright Amendment would cause economic hardship for the airline, the airport and the region.

The study says a full-fledged competitor at Love Field would cost Dallas-Fort Worth more than 200 daily flights and 21 million passengers annually.

"If local passengers leave the airport, it affects the entire hub operation. There would be fewer flights and fewer reasons for passengers to connect through the airport," he said.

Wagner also disputed that passengers would get lower fares, saying Southwest skewed the numbers in its study. American has seven daily flights from BWI to Dallas-Fort Worth, and a 14-day advance ticket cost $136, which is $6 less than Southwest says it would charge for a direct flight from BWI to Love Field. In calculating American's fares for its own comparisons, Southwest used the average fare paid by all passengers on the route, $163, which Southwest says was proper.

Kevin Mitchell, head of the Business Travel Coalition, an advocacy group, noted that the Wright Amendment was passed in 1979, a year after Congress passed airline deregulation legislation aimed at increasing competition. He also said Southwest's low fares have a history of increasing the number of people flying, so that Southwest's gain in flights and passengers might not be American's loss.

But if there are economic consequences, a compromise could be reached to soften the blow, such as lifting the ban from Love Field over several years, Mitchell said. Acknowledging that the ban might not be lifted this year, Southwest officials say they would support that compromise; American would not.

Some airports have growth restrictions, including LaGuardia Airport in New York, but Mitchell said he could name only one other with a similar ban, Ronald Reagan National Airport in Northern Virginia. A rule originally imposed to aid growth at Washington Dulles International Airport restricted the length of flights to and from National, but it has been weakened in recent years, and connecting flights are allowed.

"The Wright Amendment was set to allow Dallas-Fort Worth to get off the ground and grow and mature and be successful, which it has done," Mitchell said.

"And we agree that the Wright Amendment is a regulation in an otherwise deregulated marketplace, so how can you support this forever? Will it benefit consumers more than it might hurt economically in the short term if the amendment goes away?"

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