With all the divestitures announced when American and US Airways settled with the Department of Justice (DOJ), the most surprising result is the fight over two measly gates at tiny Dallas/Love Field. Southwest clearly wants them, but doesn’t know if it can have them. Delta wants them too, but DOJ doesn’t want them to have them. The feds clearly didn’t think this was going to work out the way it did. This is fitting since it wouldn’t be Love Field without a fight.
Dallas/Love Field is one weird airport. It was the primary airport for the entire Metroplex when Southwest started flying in 1971. At the time, Southwest coincidentally opened up shop at gates leased from Delta(see more via this post from Brian Lusk, a man who is sadly no longer with us). DFW was scheduled to open in 1974 and would become the primary airport. Any conflict could have been avoided by simply shutting Love Field down at the same time, but that would have been too easy. Instead, they opted to keep it open and Southwest opted to stick around while everyone else moved. The move was brilliant for Southwest in that it instantly made the airline the preferred carrier for people in Dallas itself because of how much closer Love was than DFW. The other airlines hated this, but after a court battle, Southwest was allowed to stay.
After deregulation, the fight flared up again when Southwest started looking at flying outside the state of Texas. In the end, it took legislation to settle the issue. Per the Wright Amendment, Southwest was allowed to stay, but no airline could fly from Love to any state that didn’t touch Texas unless it used airplanes with 56 seats or less onboard. They couldn’t even sell tickets with a connection beyond neighboring states. In other words, it was supposed to be a truly regional airport, all to protect DFW and the big boys over there.
As Southwest succeeded, other airlines and states started noticing. Close-by states that didn’t touch Texas were mad that they couldn’t get low fare service so they relied on their Congresspeople to get them in. In 1997, service opened up to Alabama, Kansas, and Mississippi. Meanwhile, several start-up airlines tried and failed to make Love Field work for them the way it had worked for Southwest.
The most innovative of these was Legend Airlines which built itself a terminal and reconfigured DC-9s to have only 56 seats so that it could skirt the flight restrictions. The idea was a good one but it didn’t really matter. American fought it in court and ultimately, gave in and flew reconfigured Fokker 100s on top of Legend. Legend could never survive and it didn’t take long for American to pull out after Legend folded.
But by the turn of the century, the writing was on the wall. Southwest, which had operated quietly under the rules finally decided that enough was enough. It declared opposition to the Wright Amendment in 2004. In 2005, Missouri was added as an exempted state. (That was particularly helpful since Kansas City’s airport is on the Missouri side.) But that wasn’t going to appease Southwest. The issue went to the courts.
After a long, drawn out battle, there was a compromise. Congress passed a bill that would allow the Wright Amendment to be lifted in phases, but it would keep severe restrictions on Love Field’s capacity. In 2006, Southwest was allowed to begin selling tickets with connections beyond exempted states. But it would have to wait all the way until October 2014 until the restrictions on flights would disappear as well.
At the time of the agreement, the plan for a made-over Love was to have 20 gates that would be split up by occupants at the time. Southwest would get 16. Continental (now United) would get 2 gates to support its service to Houston (and beyond, if they so chose). American, the most bitter opponent of Love, would also get 2 gates that it had been clumsily trying to use to beat Southwest at its own game.
Unlike when trying to beat up on a defenseless competitor like Legend, American found it couldn’t beat Southwest so it pulled out of Love Field “temporarily” until the gate modernization was complete. Since that time, Delta has been leasing the gates so it could fly originally to Memphis and now to Atlanta instead. With the modernization nearly compete and the Wright Amendment scheduled to disappear in less than a year, a battle was bound to heat up. Then DOJ threw gunpowder on it.
In the agreement with American and US Airways, DOJ required that the airline give up its 2 gates at Love Field. The new American, clearly not interested in trying to beat Southwest at its own game anyway, gladly gave them up.
Naturally, Southwest wants to get its hands on those gates and expand to 18 total, but can it? Neither Southwest nor Love Field could answer that question for me. Some say that the gates have to become common-use. Others say that they can be leased out… but not to Southwest since the airline is capped at 16 in the agreement. JetBlue might like that interpretation if it wants to move its flights from DFW over to Love. Undoubtedly, the lawyers will need to earn their money to figure this one out.
But Delta was the one that threw a big ole’ wrench into the situation when it announced that next year it wants those gates to fly from Love to Detroit, Los Angeles, Minneapolis, and New York/LaGuardia. That’s not what DOJ had in mind. The agency wanted the so-called (but not truly) low cost carriers to get anything that American and US Airways had to give up. Whether they can actually legally restrict it to those carriers is another story.
Ever since Delta dismantled its DFW hub, it has had a minimal presence in the region. If it gets the gates at Love, it will provide the only airport-to-airport competition to Southwest nonstops in those markets. And Southwest may not serve Minneapolis or Detroit nonstop, so Delta could provide new nonstop service. Of course, the counter argument is that people in the Metroplex already have access to those places if they drive a bit further out to DFW. If Southwest gets the gates at Love, it will provide new nonstop service that Southwest can’t serve without the gates.
From a Delta perspective, this is a worthwhile move. It will give the airline a leg-up against American for those who want to go into Dallas. And American won’t be able to enter the market itself. But this move has added some real complexity to what should have been fairly straightforward from DOJ’s perspective. That’s fitting, since when it comes to Love, there is rarely any love lost between airlines. Grab the popcorn and get ready to watch yet another in a long line of brawls.
