Southwest has a government-granted near monopoly at Dallas Love Field airport. The airline, which fought tooth and nail for the right to be allowed to fly there as an upstart, and now uses the machinations of government to keep out competitors.
And with only two gates at the airport available for use by anyone else, Enilria reports that no one else is really able to make flights there work. They can’t build a local customer base. Alaska Airlines is pulling down to just one to two flights per day out of the gate they control. And that leaves only Delta, from its single gate number 11, against Southwest operating from 18 different gates at the airport.
- Did you know that Dallas Love Field used to have 32 gates, and Southwest got Congress to eliminate 12 gates there? Now Southwest has 18 of the airport’s 20 gates.
- That was part of the deal that lifted all Wright Amendment restrictions on where flights could go from the airport. Southwest got a monopoly at Love Field, but the total flying from that airport wouldn’t be as big of a challenge to American Airlines dominance at Dallas – Fort Worth.
Southwest had leases for 16 gates. United Airlines leased two, one of which had been subleased to Delta. Southwest cut a deal with United to get those two for itself, leaving Delta out in the cold.
American Airlines had two gates, but gave them up as a condition of government approval for their US Airways merger. The gates went to Virgin America, and are now controlled by Alaska Airlines which acquired Virgin.
That left Southwest with 18 gates, Alaska with 2, and Delta without a gate. The Department of Transportation said that the City of Dallas had to continue to accommodate Delta at Love Field even though it had no gates to do so, couldn’t legally build more, and Southwest had a valid lease for the gate Delta was using.
Everyone wound up in Court. Just for kicks, American Airlines got involved to say they wanted gates at Love Field, too! (They didn’t really, they were basically trolling.) In the meantime Delta squatted on a Love Field gate half the time. In the end,
- Alaska Airlines doesn’t actually want to use two gates at Love Field
- So Delta uses one of them
- And the City of Dallas kicks in $200,000 a year to lease the gate for Delta through 2028
None of this would have been an issue if the federal government hadn’t limited the number of gates at Love Field, helping to cartelize the airport, and if the city hadn’t destroyed gates there would have been a greater chance of redress through Congress.
They actually used eminent domain to take the old Legend Airlines terminal at Love Field. And – since the gates could no longer be used, given the cap on gates passed by Congress – they didn’t even pay for take the terminal since it was considered to have no economic value. They cancelled the lease and it got turned into a Lincoln dealership.
Enilria says “Alaska, Delta Getting Slaughtered at Dallas DAL” and how could they not be. The situation, “America’s biggest monopoly” is called “a capitalistic tragedy and embarrassment.” But it’s entirely government’s doing, not the free market. The farce here is complaining about airline competition when the lack of competition is almost exclusively the result of government policy.
Air traffic control is limited by FAA capacity. Gates are leased out long-term by government-owned airports. Slot-controlled airports have takeoff and landing rights given to incumbent airlines – as a valuable property right, for free – excluding new entrants. The Department of Justice tries to block consolidation in the industry, but all they’ve done is further blocked the creation of viable competitors to the existing largest players in a market. Our competition policy is why consumers have so little choice in air travel.