Dallas Love Field has 20 gates. They are legally forbidden to build more. (Thanks, Congress!)
Southwest has 16 gates. They’ve subleased 2 from United. That’s 18.
The other 2 gates are controlled by Virgin America.
Delta flies from the former United gates. There’s a big court battle over whether they’ll be able to continue to squat on those gates or not. And it all started with the federal government requiring American to give up its gates to Virgin America.
Chairs Gates at Dallas Love Field
How did Delta wind up without leased gates at Dallas Love Field?
- Part of the price for American getting government signoff of its merger with US Airways was giving up its gates at Dallas Love Field that it wasn’t using. American doesn’t want to fly from Love Field, since its major operation is across town at DFW. It used to lease those gates to Delta. The government required it to give up the gates, and Delta was without a home.
- So Delta leased United gates. United didn’t want to fly from Love Field really, it was squatting on its gates with a ton of Houston Hobby regional jet flights. So might as well have Delta pay to use the gets instead of burning cash on money losing flights.
- But Southwest struck a deal to get the United gates, and that left Delta without a home. Love Field would have Southwest and Virgin America service instead of Southwest and Delta service, thanks to the game of musical chairs set in motion by the Department of Justice.
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 gates Delta was using.
Everyone wound up in Court. Just for kicks, American Airlines now says they want gates at Love Field, too! (They don’t really, they’re just messing with everyone.)
Southwest has agreed to let Delta continue using one gate at Love Field until the judge rules after the federal court hearing that’s currently scheduled for the end of September.
The FAA Insists on Magical Thinking at Love Field
Now the FAA has gotten involved arguing that the City of Dallas is obligated to accommodate Delta, without telling them how in the world they can do that.
If FAA’s investigation establishes violations of the City’s sponsor obligations and related Federal law, FAA may issue a determination that the City is in noncompliance with its Federal grant obligations in its operation of DAL [Dallas Love Field]…
As a result, the City could be found to be ineligible to receive new FAA grants and payments under existing grants until this matter is resolved.
Since the FAA investigation will go beyond the federal court’s issuing of a ruling in the matter, it’s more or less irrelevant. If a federal judge rules that Delta gets to keep using one gate, the matter will be moot as Dallas won’t have denied Delta the ability to serve the airport. And if a federal judge rules that Delta doesn’t have the right to continue to squat on the gate that United leased to Southwest, then the FAA’s argument that it does will be superceded.
It’s just more pressure that Delta has managed to exert through its lobbyists.
Airline Cronyism Created This Mess
The way we got here in the first place is an exercise in how US airlines use government power to limit competition.
When Dallas Fort-Worth Airport was constructed, the existing Love Field tenants agreed to move there and abandon commercial service from the old airport that was closer to downtown Dallas. But Southwest Airlines wasn’t an existing Love Field tenant and made no such agreement to abandon Love Field.
Southwest’s business model was intra-Texas flying, and dependent on making flying more efficient than driving. So a close-in airport was needed. And they weren’t subject to Civil Aeronautics Board regulation since they only flew intra-state.
Incumbent airlines sued to stop Southwest from taking off. Eventually Southwest prevailed, but was cordoned off by House Speaker Jim Wright (D-American Airlines) and the Wright Amendment which limited flying from that airport using aircraft with more than 56 seats to Texas, Louisiana, Arkansas, Oklahoma, and New Mexico.
After Southwest expanded beyond Texas (post-deregulation), passengers could book a ticket from Love Field to one of these four other states and from there — on a separate ticket and without through-checking of baggage — to wherever they wished. But Southwest couldn’t sell tickets beyond the four states.
In 1997 the list of allowable states was extended to Alabama, Kansas, and Mississippi. In 2005 Missouri was added.
Current Airbus North America chairman and former FAA Administrator T. Allen McArtor founded Legend Airlines in 2000 which bypassed the Wright Amendment by offering all business class service on 56-seat DC9s to Los Angeles, New York, Las Vegas, and DC. They were out of business by 2001, in part collapsing under mounting legal fees.
In 2006 legislation was passed to eliminate restrictions on where an airline could fly from the airport starting in late 2014. However, the law limited the number of gates the airport could have, reducing the maximum from 32 to 20.
That was the tradeoff – get rid of the silly distance restrictions, but reduce the amount of service possible from the airport, in order to limit competition. That was a compromise that got buy in from both Southwest Airlines (because they’d become a virtual monopoly at Love) and American (because they wouldn’t have as many flights to compete against from the airport that’s less convenient to many residents).
The Solution is More Gates, Not Redistributing Gates
It seems clear to me that:
- The federal government shouldn’t have insisted that American give up its Love Field gates, since transferring those didn’t increase competition. It couldn’t, since the number of gates were capped. There were 3 carriers serving the airport before. At most at the end of this there could be 3 carriers serving the airport, and possibly only 2. That was a silly tax to extract from the merger.
- There’s demand for more service at Dallas Love Field than 20 gates can support. The legal limit on service from the airport should be lifted. It’s a protectionist measure that benefits incumbent carriers at the airport (less competition for Southwest) and that benefits American Airlines (since it limits service at Love Field which can compete with their major Dallas Fort-Worth operation).
Ultimately a judge will determine the outcome of the current suit (although the judge’s ruling may well be appealed). But we’re only in this mess because the airport was legally limited in the service it could permit. They actually reduced the number of gates to limit competition, is anyone surprised that there aren’t enough gates to go around? That was the entire point of the exercise.
So I began this post by blaming Congress, an equal share of the blame has to be placed at the feet of the airlines themselves who lobbied for this state of affairs — and now don’t like the pickle they’re in.
It’s another reason I have so little sympathy when United, Delta, and American complain that the big Middle Eastern carriers use the levers of government to enhance their business. I’d be more sympathetic if that wasn’t exactly what the US airlines do all the time.