OPNLguy From United States, joined Jun 1999, 12630 posts, RR: 75 Posted (3 years 6 months 1 week 2 days 20 hours ago) and read 1939 times:
Remember the study that DFW released back on May 10th, the one that spelled out all the doom and gloom that would befall DFW if the Wright Amendment were repealed, but didn’t discuss anything regarding airfares?
“Airfares from North Texas to dozens of cities could drop as much as 50 percent if the Wright Amendment is lifted, according to a recent study commissioned by Dallas/Fort Worth Airport.” [Gad, what a surprise…]
“The airport, a leading proponent of the amendment, released a summary of the study two weeks ago indicating that if flight restrictions were lifted at Dallas Love Field, hundreds of flights would be shifted to Love from D/FW. The summary did not include the findings on fares”. [Gee, I wonder why…]
"If Southwest Airlines is allowed to expand, will fares come down? Absolutely," said Christina Cassotis, the study's author and vice president of Simat, Helliesen & Eichner in Cambridge, Mass. [How nice that they finally admit this…]
“The Star-Telegram obtained the fare data this week from the airport's legal department after submitting a written request for the documents.” [Rather disingenuous of DFW not to have released it to begin with…]
"We weren't trying to hide that issue," said Kevin Cox, the airport's chief operating officer. "We just didn't think anyone was interested in 160 pages of voluminous material." [I’ll just bet they weren't. The results of those 160 pages could have been condensed into readible form, I mean, the newspaper managed to do so. Maybe if they hadn’t sandbagged everyone on releasing the full report, some folks would have come away with a different conclusion on the issue...]
Cassotis said the impact on fares was never intended to be the report's main focus. [Of course, because they don’t –want- it to be...]
"The fare issue is very important to consumers, and so perhaps we should have included it," she said. [Perhaps? You know the fare issue is very important to consumers, the best you can do is “perhaps?…]
The report also calculated that the average fare on all airlines, flying at D/FW or Love Field, would drop 31 percent to Southwest's new destinations, as other carriers are forced to compete. [Competition –works- folks…]
Southwest officials say those low fares are the crux of their argument for repealing the restrictions.
"Anytime you fetter competition, what you have is a penalty to the consumer," Kelleher said.
But airport officials say the debate shouldn't be about fares. [Again, because they don’t –want- it to be. Guess the consumer doesn’t deserve lower fares...]
"Of course fares would go down," said Cox, the D/FW official. "But that shouldn't be the question. The question is, at what expense?" [Actually, it –should- be the question...]
Cox called the fare issue "a red herring" because Southwest can fly to any destination from D/FW, without any potential damage to the airport from lifting the amendment. [DFW is doing a pretty good job of spinning themselves. Southwest has the inherent right, as a business, to decide how to run its business, and if Southwest decides operating at DFW doesn’t make sense for them, that’s their decision, and nobody else’s, whether folks agree with it or not. No red herrings, but what does smells fishy here is DFW’s lack of forthrightness on the whole issue...]
"Southwest is doing an excellent job of spinning this to make it look like they're helping the traveling public," he said. [Well, It sure doesn’t look like DFW is “helping the traveling public” with lower fares, so somebody’s got to…]
Texdravid From , joined Dec 1969, posts, RR: Reply 2, posted (3 years 6 months 1 week 2 days 20 hours ago) and read 1913 times:
Good point, 7E7.
DFW is a top domestic/international gateway is due only to AA's and previously, DL's largesse. Otherwise, the DFW region could only support a very limited international presence, and mostly to Latin/South America.
DFW without AA would become like STL, MSY...ok, maybe not that bad, but DFW for most people is just a connecting joint where 80% of the people don't get on/off at DFW.
Boeing7E7 From , joined Dec 1969, posts, RR: Reply 3, posted (3 years 6 months 1 week 2 days 20 hours ago) and read 1879 times:
DFW without AA would become like STL, MSY...ok, maybe not that bad, but DFW for most people is just a connecting joint where 80% of the people don't get on/off at DFW.
You're exactly right.
While fares would be impacted, it's not that they would actually be lower. The shift in O&D demand would free up more seats artificially deflating the fares due to over capacity. Essentially, DFW would collapse.
Major thumbs up for God knows how many small airports dependent on DFW for a connection to the rest of the world that would lose air service. Lets here it for Southwest!!!
Southwest going to start serving Abiline? Fort Smith? Whichita Falls?
NOT!
Southwest helps no-one but themselves and large markets where pilling in the pax by the thousands is possible. Period. Thanks for a desire to further fragment the industry.
By the way, all SWA offers is Vanilla and Vanilla sucks.
Ssides From United States, joined Feb 2001, 3771 posts, RR: 20 Reply 4, posted (3 years 6 months 1 week 2 days 20 hours ago) and read 1867 times:
Quoting Texdravid (Reply 2): DFW is a top domestic/international gateway is due only to AA's and previously, DL's largesse. Otherwise, the DFW region could only support a very limited international presence, and mostly to Latin/South America.
True, but only to an extent. AA made a conscious decision to hub its operation here, and a big part of that was potential growth. It's a chicken-or-the-egg argument ... did DFW grow because of AA, or did AA grow due to the growth in the DFW area?
You could make similar arguments for other hubs: DEN, ATL, IAH, MSP, etc.
Quoting Texdravid (Reply 2): DFW without AA would become like STL, MSY...ok, maybe not that bad, but DFW for most people is just a connecting joint where 80% of the people don't get on/off at DFW.
Remember, the DFW area is still the ninth largest metropolitan area in the country. And, in the past 5-6 years, O&D traffic at DFW has grown significantly. I think O&D at DFW is now up to about 60% of traffic (I'm still looking for the figures), up from about 40% several years ago.
Boeing7E7 From , joined Dec 1969, posts, RR: Reply 5, posted (3 years 6 months 1 week 2 days 20 hours ago) and read 1850 times:
And, in the past 5-6 years, O&D traffic at DFW has grown significantly. I think O&D at DFW is now up to about 60% of traffic (I'm still looking for the figures), up from about 40% several years ago.
Not true. If it were, Delta would still be there. Even ORD's O&D is not that high and it supports UA and AA on a larger scale than DFW ever supported DL and AA.
TAN FLYR From United States, joined Aug 2000, 1399 posts, RR: 0 Reply 6, posted (3 years 6 months 1 week 2 days 20 hours ago) and read 1846 times:
Boeing 7E7 made a great point..Southwest, to its' credit, does a lot for point to points of larger cities. Those of us that utilize DFW as a connecting point to smaller cities ( FWA, DAY and such) probably would not benefit substantially.
Bartond From United States, joined Jul 2003, 654 posts, RR: 2 Reply 7, posted (3 years 6 months 1 week 2 days 20 hours ago) and read 1838 times:
Actually I think it's the 5th or 6th largest metro area in the country but I see your point.
This will be SOOOO interesting to see how this works out. As much as I want to see free competition in the Dallas/Ft. Worth area I don't want to see AA's operation and/or DFW to dwindle down to a second or third tier airport.
SESGDL From United States, joined Jan 2001, 2555 posts, RR: 17 Reply 8, posted (3 years 6 months 1 week 2 days 20 hours ago) and read 1829 times:
Quoting Boeing7E7 (Reply 5): Not true. If it were, Delta would still be there. Even ORD's O&D is not that high and it supports UA and AA on a larger scale than DFW ever supported DL and AA.
No, you're wrong. Read not too recently that DFW's O&D was about 53%, not 60%, but close enough. DFW is the nation's 10th biggest O&D city. ATL's O&D is 45%, so I think ORD's O&D is likely higher than both. Just because a city has high O&D doesn't mean that traffic is high-yielding. DL left DFW because the competition was too much, and they were fighting a loosing battle.
Atmx2000 From United States, joined Oct 2004, 4574 posts, RR: 23 Reply 9, posted (3 years 6 months 1 week 2 days 20 hours ago) and read 1841 times:
Quoting Texdravid (Reply 2): Good point, 7E7.
DFW is a top domestic/international gateway is due only to AA's and previously, DL's largesse. Otherwise, the DFW region could only support a very limited international presence, and mostly to Latin/South America.
DFW without AA would become like STL, MSY...ok, maybe not that bad, but DFW for most people is just a connecting joint where 80% of the people don't get on/off at DFW.
Hmm, maybe O&D traffic might grow if air fares were more reasonable for flying to/from Dallas to other states.
Quoting Boeing7E7 (Reply 3): You're exactly right.
While fares would be impacted, it's not that they would actually be lower. The shift in O&D demand would free up more seats artificially deflating the fares due to over capacity. Essentially, DFW would collapse.
Why wouldn't the same thing happen if Southwest moved to DFW and opened direct routes to other cities? It seems to me you want limited capacity out of the Dallas-Ft Worth area to jack up fares.
Quoting Boeing7E7 (Reply 3): Major thumbs up for God knows how many small airports dependent on DFW for a connection to the rest of the world that would lose air service. Lets here it for Southwest!!!
Southwest going to start serving Abiline? Fort Smith? Whichita Falls?
So the people of Dallas should pay more to AA to subsidize air travel for people living in these towns?
ConcordeBoy is a twin supremacist!! He supports quadicide!!
JCS17 From United States, joined Jun 2001, 7214 posts, RR: 39 Reply 10, posted (3 years 6 months 1 week 2 days 20 hours ago) and read 1807 times:
Quoting Boeing7E7 (Reply 1): It'll be so funny watching DFW collapse under 50% lower air fares...
NOT.
The whole argument ignores the most basic of demand curves. As AA inevitably drops fares when the Wright Amendment is repealed, more people will be willing to pay a lower price for air travel. Thus, giving a boost to DFW's traffic in addition to DAL's.
Don't blame me, I voted for McCain! (with a gun to my head)
Boeing7E7 From , joined Dec 1969, posts, RR: Reply 11, posted (3 years 6 months 1 week 2 days 19 hours ago) and read 1799 times:
Why wouldn't the same thing happen if Southwest moved to DFW and opened direct routes to other cities? It seems to me you want limited capacity out of the Dallas-Ft Worth area to jack up fares.
They should move. The problem is a two airport system in a one horse demand town. I look at it more as an airport problem than an airline problem.
So the people of Dallas should pay more to AA to subsidize air travel for people living in these towns?
It's a catch 22. DAL is too small to support the Dallas region demand. At the same time DFW is too big to suvive just being a hub. A collapsing DFW is a disaster for the Dallas region with DAL being able to survive and DFW being grossly under utilized to a point of non-economic viability, but still being required to meet demand at unprofitable levels. Talk about subsidization...
No, you're wrong. Read not too recently that DFW's O&D was about 53%, not 60%, but close enough. DFW is the nation's 10th biggest O&D city. ATL's O&D is 45%, so I think ORD's O&D is likely higher than both. Just because a city has high O&D doesn't mean that traffic is high-yielding. DL left DFW because the competition was too much, and they were fighting a loosing battle.
Yawn... They left because of over capacity and insufficient O&D.
The whole argument ignores the most basic of demand curves. As AA inevitably drops fares when the Wright Amendment is repealed, more people will be willing to pay a lower price for air travel. Thus, giving a boost to DFW's traffic in addition to DAL's.
You have some magical stockpile of passengers hiding somewhere in the Dallas area in this over capacity industry?
Atmx2000 From United States, joined Oct 2004, 4574 posts, RR: 23 Reply 12, posted (3 years 6 months 1 week 2 days 19 hours ago) and read 1767 times:
Quoting Boeing7E7 (Reply 11): It's a catch 22. DAL is too small to support the Dallas region demand. At the same time DFW is too big to suvive just being a hub. A collapsing DFW is a disaster for the Dallas region with DAL being able to survive and DFW being grossly under utilized to a point of non-economic viability, but still being required to meet demand at unprofitable levels. Talk about subsidization...
If DFW is connected to the larger AA network and offers international service and DAL can't support Dallas region demand, I doubt DFW is going to collapse. Both DFW and AA will simply have to become more efficient.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
Boeing7E7 From , joined Dec 1969, posts, RR: Reply 13, posted (3 years 6 months 1 week 2 days 19 hours ago) and read 1754 times:
If DFW is connected to the larger AA network and offers international service and DAL can't support Dallas region demand, I doubt DFW is going to collapse. Both DFW and AA will simply have to become more efficient.
That's a false argument.
If demand falls as it would at DFW service is lost and international connection traffic shifts to another hub further impacting DFW fares and service. In addition, the increase in demand puts undue preasure on another hub airport such as ORD or ATL which have their own capacity problems. DFW is vital to the air transportation system as a whole. More efficient? How much more efficient can a carrier get? You can't get much more efficient without negatively impacting system flow. The point to point cost structure is impossible in a hub and spoke structure and the hub and spoke system is vital to the transportation network. DFW will collapse, not vanish, but collapse and be grossly under-utilized at a time where air transportation efficiency is going down the crapper with each passing day. Ironically caused by low cost carriers like southwest who jam the airspace between larger cities with as many flights as possible in 100 seat planes further impacting the national air space system where larger 200 seat aircraft are more appropriate.
The irony of this... The carrier which best benefits from deregulation could push the Air Transportation System to it's brink with it's market cherry picking and a move like this and end up with the Government having no choice but to re-regulate the industry to salvage the airspace and airport capacity problems at large airport brought on by such a move.
Planespotting From United States, joined Apr 2004, 2706 posts, RR: 5 Reply 14, posted (3 years 6 months 1 week 2 days 19 hours ago) and read 1736 times:
Quoting Boeing7E7 (Reply 11): Yawn... They left because of over capacity and insufficient O&D.
DL left because they were extremely close to bankruptcy and had to consolidate their operations into one single hub. It was a cost saving measure. DL's financial statements (Cash Flow) for Q3 and Q4 2004 paint a perfect picture. You'll see a tremendous loss of revenue in Operating Cash Flows (nearly $2 billion in the red). From investing cash flows, they lost over half a billion dollars in Q3 and Q4. but in Q1 2005, (during the time they abandoned the hub at DFW) they only lost 67,000,000 in investing, and actually scored 165 million in cash from operating (quite a jump from losing as much as they did in 2004). So their net cash gain in Q1 2005 was 85 million or so, give or take.
I don't know how much you all know about accounting, but when a company jettisons a huge part of it's operation but somehow ends up making money, it shows you what a large amount of money that operation was taking out of their pocketbooks. Delta needed cash, and they didn't have time to sit at DFW to drain the rest of their excess cash for demand to pick up.
The cash they got from American Express financing helped them out a lot too. It's all about accounting folks!
Boeing7E7 From , joined Dec 1969, posts, RR: Reply 15, posted (3 years 6 months 1 week 2 days 19 hours ago) and read 1726 times:
The problem dates back to around 1996/1997 when they had to begin removing mainline service and replacing it with RJ service due to a fall off in O&D. The DFW problem didn't happen overnight. Keeping SLC just made more sence systemwise, but even consideration was given in 2000 to moving that operation to LAS.
Ikramerica From United States, joined May 2005, 15657 posts, RR: 49 Reply 16, posted (3 years 6 months 1 week 2 days 18 hours ago) and read 1698 times:
All those "other" texas cities that rely on DFW to connect them to the world?
Well, CO and IAH would be more than happy to provide increased service. Of course, with less competition, prices could increase.
Of all the things to worry about... the Wookie has no pants.
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