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

Mar 13, 2014

More Reading on This Topic: DAL – Dallas/Love Field, Delta, Southwest, Virgin America

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.

Brett

34 responses to “The Fight for American’s Gates At Dallas/Love Field Heats Up”

A

Mar 13, 2014 at 6:41 am

It’s a shame that Delta is probably out of the competition. Virgin, while an OK airline, doesn’t fly anywhere. If DL runs good frequency to their biggest hubs they are a true competitor to the WN monopoly at LUV and alternative to the AA dominance at DFW.

And if the DOJ likes cheap fares why do they love WN? Time and time again I check their fares and they are more expensive AND require a layover vs. the legacy carrier.

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Jeremy McMillen

Mar 13, 2014 at 7:37 am

I feel WN does not need to get those gates they all ready have enough destinations from Love if anything Virgin should get them because it adds an Airline to Love that does not fly to Love whats funny to me is that UA does not want either of the gates I could see them fighting SWA on routes to LAX, Chicago, and maybe the DC area

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1. Juan from CHI
  
  Mar 13, 2014 at 6:35 pm
  
  I think United owns the gates that are being leased by ExpressJet. When the deal was reach to end the restriction at Love the divided the 20 gates as SWA 16, AA 2, and CO 2. United got the 2 week it merged with CO.
  
  United does not have to show its hand until after the dust has settled.
  
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David SF eastbay

Mar 13, 2014 at 7:40 am

How to locals see both DAL and DFW? If they think of DAL as only a close in business airport to/from major business cities in the USA then Virgin could be a top contender. Giving WN all those gates at DAL, they might as well just give the whole airport to WN as a present. What DL wants to do can be done from DFW since it sounds more like just connecting people to other parts of the world.

A WN/VX combo at DAL sounds like a good mix of bus passengers and limo passengers since both those airlines seem to have a certain image surrounding them that would cater to a lot of peoples needs.

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1. Million Miler
  
  Mar 13, 2014 at 9:26 am
  
  As a 30 year resident of the DFW area, I rarely think about DAL at all.
  
  Like many people in my demographic, I live well to the north of Downtown Dallas. And frankly despite all of Dallas’ efforts to the contrary, Dallas does not really have a downtown. Yes there a number of large office towers, hotels and a convention center inside the small circle defined by the various freeways in the center of town, but the concept of a downtown as in Chicago or other large cities does not exist. 30 years ago large office towers started sprouting to the north along Hwy 75 in an area vaguely defined as “north Dallas”, then about 20 years ago new office tower construction spread further north and west into “far north Dallas”, Richardson and Plano, More recently the big office complexes have sprouted even further north and west in towns like Frisco.
  
  Following the same time line, the area west of Dallas has morphed into a major center for large corporate campuses, first along the road linking Dallas to the north entrance of DFW and then further west of DFW. In the meantime the completion of two major east-west toll roads – with direct access to DFW have made commuting to DFW easier/faster for folks living and working in the northern suburbs. So the idea of DAL as a “downtown” business destination seems a bit odd to me. If I were a visitor,l unless I had business within a very small radius of DAL, DFW is the much easier airport.
  
  For me DAL is the place you used to go for cheap fares to adjacent states, (not cheap any more, usually a couple $ more than American the last few years, especially if you could plan 7 days ahead) and for day trips to Houston due to the large number of flights (every 15 minutes at peak times) making it easy to get back home if your meeting ran longer than scheduled or you had an appointment cancel.
  
  I like Southwest, I like their people, I like their attitude, if they served DFW they would likely get a fair share of my business. But for me, and a large number of people like me, they are in the wrong place.
  
  Reply
  1. SEAN
    
    Mar 13, 2014 at 12:26 pm
    
    Please correct me if I am wrong, but aren’t the areas south of downtown dallas also growing rapidly as well? Dallas Area Rapid Transit has spent a lot of time & money expanding it’s light rail system to both airports. In the case of Love Field in particular, numerous large scale transit villages have been built or are under construction along that line.
    
    http://www.dart.com
    
    Reply
    1. SEAN
      
      Mar 13, 2014 at 12:32 pm
      
      http://www.dart.gov
      
      Sorry
      
      Reply
    2. MeanMeosh
      
      Mar 13, 2014 at 1:09 pm
      
      I think the website you’re after is:
      
      http://www.dart.org
      
      To answer your question, various parties have been trying for at least the last 30 years to grow the area south of downtown, but results have been mixed at best. Very recently, you’ve seen some development on the south end of downtown in the Cedars development, some parts of North Oak Cliff just south of the Trinity River across from downtown, and now the gentrification that took over Uptown is moving up Cedar Springs towards Love Field, but it’s a pretty small pool to pick from overall.
      
      As Million Miler points out, though, the idea of DAL being “close-in” is something of a false narrative, with most of the highest growth portions of the Metroplex up north in Denton and Collin Counties, in the far eastern portion of the area out towards Rockwall, and the area north and east of Ft. Worth, which also happens to be right next door to DFW. In general, what we’ve seen over the last 20 years or so is a shift of the area’s population center decidedly to the north. Nobody really talks about it, but that has as much to do with AA giving up the fight over the Wright Amendment as much as anything else – more and more of its customers ended up in areas that were more convenient to DFW.
      
      I hate to break it to DL, but if they think people like me, a business traveler who lives in the northern suburbs, is going to go to DAL to fly on an RJ to LAX when I can more conveniently drive to DFW and take an AA mainline flight from there, they’re sadly mistaken.
      
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MeanMeosh

Mar 13, 2014 at 8:01 am

I would personally prefer to see WN or VX get those gates. Why? Except for those ATL flights, DL’s proposal is to run their service on crappy RJs. Sorry, but even an RJ with a first class cabin and/or Economy Comfort is still a regional jet. Every one of these proposed non-ATL routes is 2.5 hours+ on either a CRJ or ERJ, which is a not a pleasant ride in coach (I have had the misfortune of flying in a DL CRJ from JFK to DFW, an experience I would prefer not to repeat, ever). A fair number of business travelers who live/work in the Metroplex are actually equidistant, if not closer to, DFW. Even for out-of-towners coming in for the day, remember that while DAL is more convenient to downtown and the Galleria area, it isn’t if your destination is one of the big corporate parks in Las Colinas or West Plano/Frisco. Given all that, I’m not sold that RJ service out of DAL would necessarily be preferable to mainline AA service out of DFW for the target market here.

Between WN and VX, I’d like to see VX given a shot to make this work, but I suspect Southwest will ultimately get these gates. Number one, the Dallas City Council is going to inclined to spread the LUV to begin with, and number two, I have no doubt whatsoever that the DOJ will lean heavily on the city to reward their golden child.

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1. CF
  
  Mar 13, 2014 at 4:55 pm
  
  MeanMeosh (and others) – Both the LaGuardia and JFK flights would be on Embraer 175s which are far from the CRJ/ERJ style of ride. They’re really nice, actually, and I wouldn’t hesitate to fly on a longer flight. Detroit and Minneapolis are on CRJ-900s, which isn’t ideal, but those are still far better than the 50-seater comfort. Of course, Delta will fly fewer seats than Southwest or Virgin America would, but comfort isn’t a huge issue here.
  
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Southeasterner

Mar 13, 2014 at 8:04 am

So you have higher demand than supply. What’s the problem here?

Auction off the gates to the highest bidder and use the proceeds to reduce landing fees or invest in airport infrastructure.

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1. Nick Barnard
  
  Mar 13, 2014 at 9:59 am
  
  Hrm, so using the proceeds to reduce landing fees, is basically prepaying your landing fees? (well yours and WN’s!)
  
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2. CF
  
  Mar 13, 2014 at 4:57 pm
  
  Southeasterner – Well apparently they can only auction to the highest bidder if the bidder is deemed worthy. Delta might pay the most, but they aren’t allowed. So that won’t happen.
  
  And though I’m not sure how this will work, if American is selling its leasehold, then it would keep the profits, not the airport. That’s how the slots worked at National but that could be a different animal.
  
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Sean

Mar 13, 2014 at 8:22 am

Are operations at DAL restricted from having bus gates like you see at many European airports?

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1. CF
  
  Mar 13, 2014 at 4:58 pm
  
  Sean – Yes. They cannot use bus gates.
  
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DesertGhost

Mar 13, 2014 at 8:57 am

This is looking like it’s going to be a lot of fun to watch. Yet, it seems ironic that the airline that talks a good story about adding competition loves the idea of having a virtual monopoly at Love Field.

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Diego rodriguez

Mar 13, 2014 at 9:21 am

I don’t understand why 10 flights/gate/day seems to be Southwest’s limit. If operations start at 6am, I would think 1 flight per hour would be me more than possible. Southwest used to be know for quick turnarounds, so if a gate is used until even just 10pm that would be 16 flights/gate/day. It seems like southwest is limiting its potential.

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1. Noah
  
  Mar 13, 2014 at 11:29 am
  
  Its hard to do much beyond 10 per day. Maybe I could see 12, but that gets tough…
  
  Flights are not evenly scheduled throughout the day because demand is not evenly distributed. There is a morning and evening rush, and fewer flights mid-day, late night, etc. Even if you can operationally turn a plane in 45-50 minutes, you have to schedule some slack time for planes which are delayed coming in, have mechanical or other issues ant get stuck at gate, etc.
  
  I’m also not sure about Southwest, but its possible that peak/off peak days they do 12/8 which averages 10. Maybe heavier schedule around the holidays and stuff, but you can’t really run at theoretical capacity all the time or you have no slack when things go bad, and no ability to quickly add or respond to competitors when needed.
  
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ShoNuffHarlem

Mar 13, 2014 at 10:48 am

What’s the perimeter rules At DCA LGA?

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1. CF
  
  Mar 13, 2014 at 4:59 pm
  
  ShoNuffHarlem – Here’s a long explanation:
  http://crankyflier.com/2006/09/23/perimeter-rules-no-this-doesnt-involve/
  
  But in short, National can’t have flights beyond 1,250 miles (except for the few exemption slots which are not an issue here). LaGuardia can’t have flights beyond 1,500 miles except on Saturday.
  
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Noah

Mar 13, 2014 at 11:30 am

Surprised Jetblue isn’t interested. Guess when Spirit pushed them into DFW, they gave up the DAL dream that had kept them away from Dallas for so long

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Joe

Mar 13, 2014 at 11:47 am

I think those who live outside the metroplex confuse the airport dynamics of DFW/DAL to DC (DCA/BWI/IAD and LGA/EWR/JFK). DCA is clearly the preferred airport for DC and EWR/LGA heavily favored over JFK. DAL is not the preferred airport for the metroplex not even for some parts of Dallas. It has no direct freeway connection (unlike DFW) or rail connections (which DFW will have next year). It is not the 1970s; DAL has become a niche airport.

If the gates are not given to WN, what was the point of all this? Take 2 gates away from AA to give them to VX who will then shut down their DFW operations? How does that add competition because of the AA/US merger? If the airports serve 2 different markets (as some argue), you just reduced competition for AA’s DFW operations. Southwest will add more competition to AA only nonstop markets. VX will is already or will become the 3th or 4th carrier in the market with their lineup.

Lost in all this is what United (via expressjet) is going to do with their 2 gates. They have not said anything, but I’d guess that UA will fly to (most or all) of their hubs (LAX, SFO, ORD, EWR, IAH, DEN) which seem to have a lot of overlap with what VX has proposed. : )

Interesting to think that after the dust settles, there could be 3 carriers flying DAL-LAX….

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Dave

Mar 13, 2014 at 2:01 pm

Speaking as a visitor, not resident, (I live in Houston), I prefer to arrive at DAL, not DFW. It’s much closer to my company’s office and to where I want to be as a visitor. If I’m going to Fort Worth, I’d fly to DFW, but even then, DFW’s rental car center is so far away, so huge, and so slow, compared to DAL’s lots that you could almost walk to, that I’m tempted to fly to DAL anyway.

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Timbo

Mar 13, 2014 at 2:03 pm

I’m surprised no one has mentioned that almost all planes that DL plans to use at Love are regional jets, versus the larger jets of VX and WN. That alone should put DL out of the running since they won’t maximize utilization. And I agree with the earlier poster about WN being low cost…ha! If you book 6 months in advance, perhaps yes, but other than that they’re always the most expensive. Plus that ridiculous queuing to get on their planes…oy vey.

Also, as someone who lives in central Dallas I have to chuckle at the comments from my fellow travelers from the far northern suburbs. Trust me, there are plenty of folks in Dallas just ready for Love to open up. The airport will be wildly popular, and the fact that 3 airlines are fighting over gates should tell you something. And I suspect that my friends up north haven’t been to downtown Dallas recently — the growth and urbanization that has occurred in the past 5 years is quite amazing. Many folks can no longer bear the long commutes and population density in Dallas’ urban core is rapidly increasing. All good signs for the future of Love. I, any many others, look forward to the day I won’t ever have to go to DFW, unless it’s international.

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1. Xnuiem
  
  Mar 25, 2014 at 12:32 pm
  
  I live in the northern burbs, and I fly out of DAL at least once a week. I drive right past DFW on 114 to get to DAL.
  
  WN is a much better experience than AA, and I can get in and out of DAL so much faster than DFW. And coming home, have you ever arrived at a different terminal than you departed at DFW? It is horrible. DAL, I just walk to my car in < 5 minutes.
  
  The 15 minutes to DAL are easily made up just by airport size and annoyances of using DFW.
  
  I agree with you completely Timbo. Anyone who lives here, and counts out DAL because it is "too far" is not doing the math on those extra 15 minutes of driving compared to the time spent in the airport at DFW.
  
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  1. WildBill
    
    May 27, 2014 at 10:27 pm
    
    Amen, brother! Even with the Wright Amendment, Love Field handled more than 4,250,000 emplacements in 2013, almost all of which was WN operating with 12 gates. That represents two thirds of Love’s 1973 emplacements of 6,668,000 utilizing 70 gates, it’s last full year before DFW opened. I see Love Field surpassing the 6.6 mm emplacements next year with only 20 total gates. If that ain’t healthy demand for Love Field, then Braniff never went bankrupt
    
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Sanjeev M

Mar 13, 2014 at 2:04 pm

OMG this has been so much fun watching this unfold over the last 2 weeks :) United must be having fun watching this.

I have mixed feelings here. WN getting the gates leads to better connecting power and stronger spokes to compete against AA in the entire Metroplex. VX has a new product and would break Southwest’s local monopoly at DAL to the major coastal destinations. DL has been serving DAL and offers global connections out of the massive ATL hub.

I would like to see VX continue to challenge AA at DFW. Even with just a few flights to SFO/LAX when VX arrived in Dallas they forced AA to reduce fares and push double miles the whole summer on DFW-SFO/LAX. But VX probably feels Spirit is killing the low end at DFW and so DAL might be easier to make work, esp against WN with no F. However they would need both gates to do this.

WN can easily run most of the other destinations out of their existing gates, but they probably want to maintain frequency on core hub-to-hub (e.g. ATL,MDW,BWI) and business routes (HOU, MSY, SAT). They would even be ok with one extra gate.

I think that DL should be allowed to at least maintain it’s current 5x daily DAL-ATL given that DL has been committed to DAL (it was even served from Memphis before that was dehubbed). Now this may be through getting one of these AA gates, a UA sublease, or even a WN sublease in exchange for WN getting the two gates.

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drybean

Mar 13, 2014 at 2:57 pm

It is as true today as ever. The DAL DFW battle proves Dallas is where the east peters out and Fort Worth is where the west begins!

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Peter

Mar 14, 2014 at 7:46 am

It’s just amazing how screwed up things get when the Feds (DOJ) get involved.

And, BTW, everytime I check fares for a trip it reminds me that WN is no longer a LCC

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Edward Shelswell-White

Mar 14, 2014 at 1:50 pm

Here’s what we wrote about this topic in our blog earlier in the week: http://lexvolo.com/dallas-drama/

Synthesis:
If you think DFW and DAL do not compete with each other, Southwest should not get to use the 2 DAL AA gates. Someone else should, to maximize competition at DAL.

If you think DFW and DAL do compete with each other, then Southwest should get to use the 2 DAL AA gates, as they can best improve competition in the DFW/DAL catchment versus AA’s DFW hub.

AvGeek side note – we continue to believe the terms adopted legislatively in the Wright Amendment Reform Act, not those penned administratively by DOJ, should determine the disposition of the 2 AA gates. The City of Dallas should get the gates and allow carriers to schedule them on a common use, not leased, basis. But we’re idealists (or is it ideologues?)…

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[BLOCKED BY STBV] Winning and Losing Airports in the Washington/National Slot Shuffle | The Cranky Flier

Mar 25, 2014 at 4:15 am

[…] return. It’s in a BIG way with 9 daily flights. And Dallas/Love Field, well, it has been prohibited to have nonstop service in this market since the Wright Amendment went into effect. That changes in October, so it’s no surprise […]

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Tom Martin

Apr 23, 2014 at 12:39 pm

First, The break up of the Wright Amendment should NEVER have happened. Southwest Airlines misled people by saying it was ‘illegal for them to fly beyond the bordering states.’ That is (was) completely FALSE. Southwest, like all the other airlines could have obtained aircraft under 56 seats and flown anywhere in the country!

Let me make this comment…the main WN customer base will be in for a shock in October. As indicated, with 16 gates, WN has limits on the number of flights they can offer. With all the new destinations, what cities will suffer…?? HOU, AUS, SAT, OKC, TUL, all the cities that were within the perimeter will take a huge hit – not only in frequency, but in fares!

Despite WNs denial, this also makes DAL more of a true hub and connecting point. Why should WN sell $59 DAL-AUS local, when they can sell LGA-DAL-AUS and get more revenue. This will have the opposite effect on fares – fares out of DAL will actually go up. in fact, since they have opened up Love Field to ‘through flights’ air fares have gone up, on average.

As someone who grew up next to LGB, DFW is much more convenient. In fact, I tell my LA friends, for me it’s like living in Long Beach and flying out of BUR – not easy to get to! I think people would prefer something in Fort Worth, like Meacham Airport to PHX or DEN.

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WildBill

May 27, 2014 at 10:40 pm

You obviously know nothing about airline/aircraft operating economics and operations. a 56 seat aircraft would mean at least a tripling of all airfares. Legend tried it and failed. AA even did on the Fokker 100’s and lost big bucks.

You seem bitter about Southwest Airlines. If their fares are higher, it’s because fuel went from $.30 a gallon to >$3.00 a gallon over the last 12 years. But your passion is to support airlines that have laid off thousands of employees and allowed labor unions to rule their policy. Today, if there were no Southwest Airlines, the airlines would still be regulated by the CAB and only about 25% of the people currently flying today would actually be flying.

Get off your lazy behind and do your homework,

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1. Tom Martin
  
  May 28, 2014 at 5:32 am
  
  As someone who worked for a major airline, in management, I’ve done my homework. I never said anything about economics. My point, and I will make it again, was WN misled people. They claimed it was illegal for them to fly beyond the boundaries of the Wright Amendment…THAT IS TOTALLY FALSE!
  
  And I don’t buy the Mike Boyd theory that 50 pax jets aren’t profitable. Have you been to any airport in the country…DFW, ORD, LAX, etc. Sure are lots CRJ-200s and ERJ-145s flying.
  
  Airlines would still be regulated if it weren’t for Southwest? Really? How? Deregulation was signed in 1978 under the Carter Administration – Southwest had been flying for only 6 years, unregulated (intrastate). It was Deregulation that allowed Southwest to grow to what it is today.
  
  Southwest is a great airline! I will admit, I lost respect for the company when they misled (lied) about the Wright Amendment, regardless of you economic view of 50 seat jets. I understand why they want to open up Love – they want nothing to do with DFW (landing fees at DFW are about $5.50/1000lbs, versus under a dollar at Love)! WN is in a situation we (the majors) faced in the 90’s with the LCCs. Now WN faces Spirit, Virgin, JetBlue, Frontier, etc. The majors have created a worldwide network and found their niche. The new LCCs and ULCCs have their niche. But I think WN (like the majors in the 90’s) is trying to redefine its niche.
  
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