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The Fight for American’s Gates At Dallas/Love Field Heats Up

When American and US Airways settled with the Department of Justice (DOJ) and offered to give up some assets to complete their merger, most people assumed that the slots in DC and New York would be the most highly-contested. That does not appear to be the case. Those slot transfers have gone somewhat quietly and entirely as expected. But at Love Field in Dallas, where American has to give up its 2 gates, the fight has turned ugly and more political than we’ve seen in any of the other proceedings. Delta, Southwest, and Virgin America are ready to fight to the death.

Virgin America Joins the Dallas Love Field Fight

You can read the long sordid history of Love Field’s restrictions if you’d like, but the bottom line is this. The airport is capped at 20 gates, and “The city of Dallas… shall determine the allocation of leased gates.” As of now, Southwest has a lock on 16 of those gates, and it will be using them fully when the restrictions on where it can fly end in October. (Until then, it can only fly to a handful of nearby states.) Two other gates are leased by ExpressJet and are used for United Express flying to Houston. The other two gates were American’s but they’re subleased to Delta and tiny Seaport these days. It’s those two gates that are now up for grabs, and there are three airlines vying for them.

Suitor #1: Delta
Delta got an early jump on this process. As soon as it heard that American had to give up 2 gates, it decided it wanted them badly. Today, Delta flies regional jets from Love to Atlanta because it isn’t permitted to fly larger airplanes. In October when that restriction goes away, it wants to go big at Love. It has plans for six daily flights to Atlanta (upgauged from regional jets to the 717s that Southwest just leased to Delta), five to both Los Angeles and New York/LaGuardia, and three to both Minneapolis/St Paul and Detroit.

Delta has gotten pretty cocky here and even filed the schedules in the system and is selling tickets. There’s just one problem. Delta can’t operate these flights unless it gets those two gates. Otherwise, it might be able to cobble together some kind of schedule if it can somehow work a deal to use part of an ExpressJet gate, but that would be a greatly reduced schedule with much less utility to travelers.

Suitor #2: Southwest
Southwest has really started to press hard here. With only 20 gates at the airport by federal law, it has almost no opportunity to grow in Dallas. These two extra gates would give the airline 20 more flights per day. And what will it do with those? Glad you asked. Southwest has laid out its vision for service to 12 new cities from Love using those gates. It would include flights to Charlotte, Charleston, Detroit, Indianapolis, Memphis, Minneapolis, Newark, Philly, Raleigh/Durham, Sacramento, San Francisco, and Seattle. (Southwest at the same time announced it would add Dallas to Boston, Oakland, Panama City, Portland (OR), and San Jose using its existing gates.)

Notice in that list there are some very appealing cities. Charlotte? A market that was the focus of the DOJ review since American and US Airways dominate it. Detroit and Minneapolis? Cities that Delta says it will serve. Seattle and Newark? The ranking member on the House Aviation Subcommittee and the chair of the Senate’s committee just happen to be from Washington. Oh, and the Chairman of the House subcommittee? He’s from New Jersey.

Suitor #3: Virgin America
A late-comer to the race, Virgin America seems to have stumbled into this almost by accident. When Virgin America ended up buying slots at New York/LaGuardia and Washington/National from American, it had to figure out how to use them. Both those airports have perimeter rules which prevent Virgin America from using any of those slots to go to its hubs in LA and San Francisco. So it was faced with the task of finding a place to put those airplanes. How about Dallas?

Virgin America would fly to 5 cities from Love. Two, LA and SF, would just see their 3 daily flights move over from DFW to Love Field, adding a 4th next year. Another two, LaGuardia and National, would get 4 daily flights. Then Chicago would get 2 daily flights.

And the Winner Will Be?
So those are the suitors, now who will be the winner? The DOJ says Delta can forget about it. The irony here is that Delta would likely provide the most competition in the market by providing a true global airline alternative to American for businesses and other travelers in Dallas. (The closeness of Love Field can offset the fact that Delta would require connections to more destinations.) But DOJ doesn’t care about those people. DOJ cares about cheap fares (not cheap business fares, mind you) and it doesn’t think Delta will provide them. Maybe Delta can work on getting access to those ExpressJet gates, but even if so, it couldn’t support the schedule it wants to run. Shame.

Southwest seems most likely since that is clearly DOJ’s favorite airline ever, but DOJ shouldn’t actually be making the final decision here. It might be tough to overcome Southwest’s heft. It is clearly pulling out all the stops to get the gates and it has a great local relationships in Dallas. But if Southwest gets this, it would control 90 percent of the gates at Love Field, a virtual monopoly. Now that might not matter if Delta is the only other airline applying, but it’s not.

With all that being said, if they are looking to truly add new competition (and Delta is excluded), then Virgin America should be the winner. But does Virgin America have enough clout to actually get these gates? I have no idea.

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