Wednesday, August 19, 2015

Southwest and Delta are in a fight that the Federal Aviation Administration is trying to break up

The federal government has had to get in the middle of a feud over gate space at Dallas' secondary airport.

It's a fight that could be repeated in New York and Washington D.C. as lawmakers there look to remove limits on flights from smaller airports.

The competition in Texas comes after the end of a rule that prohibited airlines flying from Dallas Love Field Airport to travel long distances – beyond nearby states.

Called the Wright Amendment, it was enacted to promote Dallas-Fort Worth International Airport when it opened in 1979. With the rule now defunct—and fresh off a $500 million face lift—Love Field is poised to become more than just a regional hub.

Delta Air Lines wants to expand its service from Love Field. Currently the Atlanta-based carrier, which also has a large presence at Dallas Fort Worth just 16 miles away, leases gate space from Southwest. But Southwest, which operates 18 of the airports 20 gates, wants to kick Delta out completely.

This has prompted the FAA to step in, notifying the City of Dallas last week that by not providing reasonable accommodations for Delta, it could possibly be in breach of federal obligations as operator of the airport.

In a “notice of investigation” delivered to city officials the agency writes: 

“The FAA is initiating an investigation to determine whether the City, by failing to grant or otherwise act on the request of Delta Air Lines for accommodation at DAL has violated its Airport Improvement Program grant agreements with the FAA.” 

Why does Delta want space at Love Field?

Love Field’s proximity to Dallas' Central Business District is key to understanding the competition, says Alex McIntyre, a Dallas-based reporter for Airways News, who has been closely following the expiration of the Wright Amendment.

“Love Field is a really attractive location because it’s close to the city center, so it’s going to attract a lot more people than an airport 30 minutes out,” said McIntyre. “Secondly, it’s close to a really high-end market."

According to Zillow real estate data, home values in the zip code directly next to the airport average $460,600, compared to $164,200 for the metro area as a whole.

Delta declined comment for this story, and has not released any specifics about destinations for additional flights. Currently Delta operates five flights a day through gates subleased by Southwest, all to Atlanta. Southwest also declined to comment.

This could effect other airports

Love Field wasn’t the only airport with distance restrictions. New York’s LaGuardia and Washington Reagan both have destination limits of 1,500 and 1,250 miles respectively.

“Those are two airports that are similarly contested,” said McIntyre. “At Love Field we’ve seen that repealing the Wright Amendment has done a lot for the competitive nature of the airport.”

Washington Reagan falls under the authority of congress due to its proximity to the District of Columbia, and many lawmakers have publicly supported a lift on the distance rules, as they mostly affect flights to western states.

Similar ideas are in motion in New York, where distance restrictions were imposed on LaGuardia Airport to promote the new Idle wild Airport, now known as John F. Kennedy International, which handles a majority of the regions international traffic.

The Wall Street Journal reported in February that officials at the Port Authority of New York and New Jersey, LaGuardia's governing body, were mulling a possible change to the perimeter restrictions "to determine whether it remains in the best interest of the region’s air travelers.”

If the opening of Love Field to long-haul is seen as a success story, it could add fuel to efforts to repeal similar restrictions at other airports. 

Who will win?

Southwest originally told Delta to be out by July 7. That deadline was later extended to September 1.

Federal law prohibits any single airline from having exclusive use of an airport that receives federal money. Records show Love Field was awarded $8.9 million in FAA grants in 2014.

The City of Dallas declined to comment on the impending FAA investigation, but the notice says officials must respond by September 9, about three weeks from now.

In a suit filed in U.S. District court last month relating to this ongoing skirmish, the city voiced support for Southwest, writing that “the City believes that Southwest will prevail on the merits over Delta.”

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