The Beginning of the End of the Wright Amendment

For those who live in the city of Dallas, today was a good day. It marked the first day you could buy a ticket for flights from Dallas/Love Field to 28 new destinations nationwide on Southwest.

For a rundown on the Wright Amendment, go here. Warning: That site is sponsored by Southwest, so it is likely biased, but it at least gets the history correct for educational purposes.

In short, when DFW opened, airlines were prohibited from flying planes and even selling tickets on connecting flights between Dallas/Love Field and most states except for the ones surrounding (and including) Texas. Sure there were a few exceptions – Missouri recently joined the party – but for the most part, the law held for almost 30 years.

There are really two main players in this fight. Southwest is in one corner begging to get rid of the restrictions so they can start flying anywhere from Love. In the other corner is American, saying it will be bad for the consumer in all kinds of ways. Read here to see their arguments.

Fortunately, they came to an agreement that allows connecting flights to be sold immediately from Love with nonstop flights to be allowed in 2014 (yes, it’s strangely distant). That’s why I say this is just the beginning of the end – it’ll take 8 years for it to really disappear.

But let’s get to the interesting stuff. Southwest said that repealing the law would lower fares in the area while American disagreed. President Bush signed the law on October 13 and Southwest quickly announced that you would be able to buy connecting flights to twenty five cities for travel beginning today, October 19. Let’s take a look at a few of those markets to see what happened to fares.

Using FareCompare, you can find excellent historical information for airfare, so let’s dig in. The following is a complete list of American’s fares last week vs. this week in markets that Southwest announced they would start selling connections. As you can see, fares came down dramatically in many markets and at least minimally in almost every market (the last three are markets where Southwest codeshares with ATA so it is less likely that American would match).