Interesting interview with Kevin Cox of DFW from the Dallas Business Journal. Excerpts below:
DBJ: You've offered financial incentives to various airlines to fill Delta's empty gates. Did you think you'd have a taker by now?
KEVIN COX: Yes, we did. We have been meeting with every airline, or airlines-in-the-making that don't even have aircraft yet. We actually had three carriers that had expressed an interest in the gates. But since then fuel prices have escalated, and Southwest announced its intention to seek repeal of the Wright Amendment. Those two things -- and the industry's uncertainty -- have significantly dampened our ability to fill those gates.
DBJ: So those three carriers are out of the picture now?
COX: Southwest, which was one of the three, looked us in the face and said they were interested, could make money at D/FW and could operate there efficiently. A week later they announced their desire to repeal the Wright Amendment. That same day a second carrier called me at three in the afternoon and indicated that as long as this cloud of uncertainty of the Wright Amendment exists, they're not going to bet their company on coming to D/FW Airport. The third carrier is at D/FW and was going to announce a major expansion, which they have chosen not to do.
DBJ: What about the argument that Wright's repeal would lead to the "Southwest effect," where fares drop, boosting traffic at both airports?
COX: What Southwest doesn't tell you is that D/FW already has low-cost service to six of the 15 cities that Southwest will potentially fly to. And before the end of the year, we'll add three more, giving us nine of the 15. Any stimulation -- the "Southwest effect" -- has already been experienced in six of those 15 cities; and within the next six months, it will be experienced in nine of the 15. So any great increase in traffic stimulation has probably already occurred, or will be occurring, and it has nothing to do with Southwest Airlines.
DBJ: Southwest also argues that it would incur "double costs" operating from both airports.
COX: They do that now in Los Angeles and in southern Florida. Plus, we have offered Southwest free rent, and we'll buy their equipment and pay their electricity. Their start-up costs the first year are basically zero at D/FW. I personally had a conversation with (CEO Gary) Kelly and said, "Come on out; we will make you a deal." We are open to negotiation. But we've been stiff-armed since the day they announced they want repeal.
DBJ: Southwest also contends that D/FW is too costly and too congested.
COX: We put together a presentation to combat that. We got about 10 minutes into our presentation to Gary Kelly and he stopped us and said, "Let's be honest; we can operate out of D/FW Airport. We operate out of more congested airports like Los Angeles. We operate out of more expensive airports, and we aren't scared of American Airlines." Southwest takes on every carrier in every market and does so effectively. To pretend that they can't do it at D/FW is just disingenuous. We have one of the lowest net costs per enplaned passenger of any major airport in the country.
DBJ: In terms of filling Delta's gates at D/FW, aren't prospective carriers fearful of American Airline's dominance there?
COX: Three factors keep carriers from coming. Any one is significant, but together they are virtually insurmountable. That doesn't mean that every day we aren't out there pushing it. Flying into a big American hub is a very difficult task. However, AirTran has shown it can be done. They flew right into Delta's hub and have now gained a significant market share because of their low-cost structure. Also there are the fuel prices and the Wright Amendment cloud of uncertainty. All three have chilled our ability to bring in a carrier.
DBJ: Critics say D/FW's "high fares" are essentially an invisible tax on North Texans. Will that ever change?
COX: I think it's going to happen regardless of what happens with the Wright Amendment. As I mentioned before, it's already happened. The airline industry is having to reinvent itself. No longer can a carrier, even with great dominance, demand high fares simply because it's dominant. American has made great strides at reducing its expenses to have more competitive fares. I respectfully disagree that adjusting the fares is anything we are going to be able to do, or (that the subject) has anything to do with the Wright Amendment. The market is going to adjust the fares. And fares are coming down. Our average, one-way domestic fare in fourth-quarter 2004/first-quarter 2005 was around $153. More than 25% of our passengers today pay less than $100 on a one-way fare.
"Any airline that wants to serve the [region] can go to DFW today and fly anywhere they want," WN spokesman Ed Stewart
Ckfred From United States of America, joined Apr 2001, 5218 posts, RR: 1
Reply 3, posted (8 years 11 months 3 days 6 hours ago) and read 11807 times:
This does show one thing. While many people have accused AA of playing a very rough game of hardball, WN has grown sufficiently powerful, so that it, too, can play just as rough, if not rougher.
I'm not saying that the WA should or shouldn't be repealed. But WN is now capable of being as threatening of a competitor as AA.
If I'm the CEO of an LCC, whether currently flying or in the process of starting operations, this article shows that WN will more that just fire a warning shot across the bow. AirTran learned that, when WN got into the bidding for TZ gates at MDW.
Adh214 From United States of America, joined Sep 1999, 360 posts, RR: 0
Reply 13, posted (8 years 11 months 2 days 22 hours ago) and read 11318 times:
Frankly, I am getting little bit tired of Southwest's line "We can't move to DFW because of X, Y, or Z." This article shows that clearly they can compete with American and operate in more congested airports than DFW. Southwest has even acknowledged this fact.
The noise around Love field is annoying and only going to get worse. DFW has plenty of space for Southwest and they should just move all of their opperations to DFW. Love Field could be closed (or shrunk) and redeveloped into taxable property for the city and schools in Dallas.
MDorBust From , joined Dec 1969, posts, RR:
Reply 14, posted (8 years 11 months 2 days 21 hours ago) and read 11222 times:
Yes, I registered just to respond to this thread (someone is laughing I gaurantee), but I felt that I could not let the rampant intellectual dishonesty repeatedly displayed in WA threads by fellow Texans go unanswered.
No, you can't just close or shrink DAL and expect it to become viable tax base property. How long has the old Naval Air Station been closed? Is it tax base active now? No, it's not. In fact, I believe it needs several million in haz-mat clean up before anyone will touch it. Why then do people seem to suggest that closeing DAL would transform it into a magic fairy land of economic muscle? And everyone living in the metroplex knows the DISD would just steal the money anyways
..."The noise".. oh yes, the noise. I spent a lot of time working at a certain (not to be named for legal reasons) pricey auto dealership complex that engulfs most of the north eastern side of DAL. I would always try to arrive before dawn so I could catch the old (yellow just doesn't work for me) Airborn Express 762 coming in. Wait... a 762 at love? Already? Isn't that more noisy then anything Southwest has in their fleet now that the 732's are gone? What pray tell is going to be generateing all the new noise? Don't try feeding us higher gross. Lower gross means, high climb rate at higher power = lower noise footprint. Higher gross means, lower climb rate at de-rated power after takeoff = also low noise footprint. *gasp* It's called noise abatement procedures. They are already in effect at DAL. It's not like higher weight aircraft are going to start busting the rules left and right and drag raceing out of DAL. The noisiest things at DAL are the gaggles of old corporate jets, Tom Hicks' 722, and the occasional 18 visiting from NFW. They aren't noisy because of weight. They are noisy because the type of engines they have. Southwest's planes are actually some of the quieter aircraft on the field.
..."It's going to hurt DFW". No it's not. Unless DAL finds a place to plow out another good 3500ft of runway, and cram another terminal on mockingbird.. DFW is going to be just fine. It's not like FDX, UPS, BA, LH....etc are just going to up and crunch into DAL... hopeing to avoid a swim in bachman lake. How many airports are around LAX? Is LAX in danger? JFK? ORD? MIA? SFO? IAD? There are plenty of large airports operating with smaller airports only a short distance away. DFW will be just fine with DAL operating without restrictions... that is if DFW's management can unstick their necks from their posteriors and operate like a real buisness.
... a high speed train connecting the two airports would be dandy though...
So please, stop telling half lies about the WA, DAL, and DFW. Let Southwest open up DAL into a real airport. AA, stop being brats. DFW, realize that fuel costs aren't the reason your airport stinks. I only have one thing that I would like Southwest to ammend in their ops. Stop trying to kill us at TSA!!!!
Get over it guys. WA needs to be banished. WA will be banished. Banishing WA will be better for the community then stragleing a successful airport and airline.
So you are saying that it isnt the increase of Southwest traffic, but AA who will purposefully tank DAL noise wise so that people complain. And we wonder (not really) what depths that AA will stoop to to win the day anyway.
Beacause we can read, unlike you, and feel no need to re-post all fo our old arguments. If you feel the need to hear them again, you can go back and read threads 'WN at DAL vs WA' et. all.
Quoting Ckfred (Reply 4): But WN is now capable of being as threatening of a competitor as AA.
I picked this idea up from that article too. Very, very interesting. Not totally a suprise, but to see blatent proof in a respected newssource that WN now holds a very big stick is refreshing. At least everyone knows it now.
For some, the sky is the limit. For us, it is only the beginning... -- Jack Hunt
Kellmark From United States of America, joined Dec 2000, 691 posts, RR: 8
Reply 20, posted (8 years 11 months 2 days 20 hours ago) and read 10899 times:
Andrew, I find it amazing that you would want to restrict choices and have higher fares to protect AA and DFW.
Do you work for one of them?
SW should be able to make any business decision they feel is in their best interest. In this case it also happen's to be in the public's interest as repealing the Wright Amendment would allow open and free competition as it should be in all airline markets. I say this having no interest in them and never even having flown them, bu I do not like it when people are forced to pay higher prices and be inconvienced just to benefit certain entities.
It is simple. Compete. DFW should compete like any other airport should compete. MIA competes against FLL. ORD competes against MDW. SFO competes against OAK.
Texan From New Zealand, joined Dec 2003, 4275 posts, RR: 52
Reply 23, posted (8 years 11 months 2 days 19 hours ago) and read 10798 times:
Quoting Planefreakaa (Reply 16): yes it is, when AA pulls 50 or so flights out of DFW and moves them to DAL. you can bet your little garland farm on that one.
Please don't tell me AA is going to drop all the way down to 950 daily departures from DFW!!! How will the Metroplex survive?!?
And it really sounded that all Cox was saying was that WN doesn't want to help him out and that if they don't wanna come voluntarily they should be forced to come because if they don't I'm gonna throw a temper tantrum and writhe on the ground and cause a big fit because they are being mean. What Cox fails to mention is that there was no deal in place. DFW wanted WN to take over 23 gates within 2 years and operate to markets that already have a glut of capacity for half their flights, with another 10% going to markets that currently do not have nonstop service from DFW (which, in WN's system, would include BOI, which AA tried but could not make work, and MHT). Yes, DFW offered a deal. They offered a deal where, while WN would not have to spend a whole lot in rent, they would have to fly unprofitable routes and open up brand spankin' new cities that not even AA serves from DFW. The cost was too high for WN with not nearly enough benefit. Simple as that.
And as for the noise, the DHL 727s, the private G-Is, G-IIs, G-IIIs, AC-90s, AC-95s, and a plethora of other aircraft, not the least of which being the 2200 ABX 762 departure, make a whole lot more noise and cause more noise pollution than WN's flights. In fact, WN accounts for only about 30% of traffic out of DAL; the rest of the noise is GA.
"I have always imagined that Paradise will be a kind of library."