To say things took a strange turn at Dallas Love Field Airport on Friday is quite the understatement. After doing everything it could to keep Delta from continuing to fly to Love Field, United has pulled a fast one. It entered into a deal to give Southwest its gates, giving Southwest a near-monopoly at the airport. If you think this is the end of the story, you’re wrong. Delta seems like the odd man out, but it is not backing down.
This one requires a lot of back story for those who aren’t familiar. The Love Field fight has gone back for decades all thanks to Southwest. Due to a quirk of history, when all the airlines abandoned Love Field for the gleaming new Dallas/Ft Worth back in the 1970s, Southwest stayed behind. After years of fighting, the Wright Amendment was born in Congress. It restricted airlines at Love to flying only to neighboring states on aircraft with more than 56 seats. Despite a couple of additional states being added in over the years, this was effectively the way things worked until last decade.
The old American management team was hell-bent on preventing Southwest from expanding out of Love beyond the borders set by the Wright Amendment. After a lot of back and forth, a settlement was reached that semi-satisfied all parties involved. The restrictions would slowly be relaxed until they were finally repealed in October 2014. The one thing that still handcuffed Southwest? Love Field was limited to 20 gates and no more. (I should note that Southwest shouldn’t mind these handcuffs since it limits any significant competition.)
This deal had Southwest occupying 16 gates while United and American each had two to use. American had stopped serving Love years before and was simply squatting on the gates, leasing space to Delta for its flights. That was the status quo until the American/US Airways merger.
In order to approve the merger, the Department of Justice required that American divest its gates. The new management team didn’t care about the gates at Love and was happy to sacrifice them. But the drama came in figuring out who would get them. Delta wanted them and promised a business schedule to its hubs. Southwest wanted them to grow its presence further. Lastly, Virgin America wanted them to establish a mini-focus city. Virgin America won the battle.
It seemed like things were settled, but Delta disagreed. It wanted to keep flying to Love Field and now that its gates were gone, it was angry. For its part, United gave Delta a big middle finger. It created an absurdly padded schedule so it could say it was fully utilizing its 2 gates so there was no room for Delta. Delta kept pushing.
When the Wright Amendment expired in October, Delta had no plans to stop flying, and it got a reprieve when Southwest agreed to let Delta use a gate until January 6, 2015 when the next schedule expansion occurred for the airline. That wasn’t much a reprieve, but it kept Delta in the game.
Eventually, United realized that its plan to stretch out its schedule was silly. It decided to lease Delta a gate starting on January 6 but only for a few months. I’m guessing Delta figured it was going to be able to do that for the long run… until last week.
On Friday, Southwest announced that it had acquired leases on both of United’s gates. It seemed clear that this was the end of United at Love, but I wanted to get confirmation. The airline told me this.
We have closed a transaction for long-term sublease of our two Dallas Love Field gates to Southwest. This change will allow us to focus on our strengths in the region – including our large Houston hub – and continue to serve our customers through DFW.
That is the long way of saying “we’re out.” Southwest’s press release was downright gleeful. The airlines says it will start 9 new cities from Love in April. The only three announced so far are Milwaukee, Memphis, and Seattle. If there was ever any doubt that the Department of Justice (DOJ) was infatuated with Southwest, that has been erased.
The transaction was reviewed and cleared without conditions by the U.S. Department of Justice Antitrust Division.
How DOJ can come to the conclusion that having a Southwest near-monopoly (save a couple gates for Virgin America) isn’t a far less competitive situation than we have today with both United and Delta is beyond me. But we shouldn’t be surprised. DOJ has been giving Southwest favored treatment for years.
So it’s all settled… or is it? I asked Delta what it had to say about this.
We still can operate and are working on a permanent solution.
It’s true that it can still operate. The deal with United is being honored by Southwest until it expires in July. But after that? I really can’t wait to see what this permanent solution will be. Something tells me it’s going to result in some legal and possibly Congressional action when all is said and done. But if Delta is really set on making sure that it has a place at the table, then it can throw its weight around and make things interesting.
[Original flirting image via Shutterstock]
