Check this out. You just have to LUV how are management plays (hard) ball!!
By Margaret Allen
Dallas Business Journal
Updated: 7:00 p.m. ET
Jan. 16, 2005
Dallas-based Southwest Airlines Co. will further cut flights at Dallas Love Field if lawmakers don't lift federal restrictions that limit long-haul service from the close-in airport.
Without long-haul flights, the airline's Boeing 737s from Dallas to its 13 short-haul destinations are underutilized, Ron Ricks, vice president of Southwest, told the Dallas Business Journal.
Ricks declined to say how many flights could be cut, or how soon.
The airline last trimmed its Dallas schedule by seven flights, from 130 to 123, in October of 2004. It normally makes such decisions on a semi-annual basis, he said.
The warning comes as Southwest has announced it will fight to get the federal Wright Amendment lifted. The 1979 law -- meant to protect Dallas/Fort Worth International Airport from competition -- limits scheduled, commercial service at Love Field to short-haul flights to nearby states.
Southwest CEO Gary Kelly shook a bitter 20-year truce in December when he announced the airline was no longer neutral on the law and would lobby legislators. Ricks said the turning point was Southwest's inability to revive short-haul traffic after recession and 9/11 stalled the nation's airline traffic.
Short-haul suffers Southwest operates 123 flights from 14 gates at Love Field, which falls below the 10-flights-per-gate national average. Before 9/11, Southwest operated 147 flights from Love.
"After 9/11, short-haul traffic was decimated and it hasn't come back," he said. "The most aggressive marketer in airline history with the lowest fares cannot grow at Love Field. If we can't grow at Love Field, no one can."
The airline has tried everything, Ricks said, but the automobile has re-emerged as a serious competitor on short-haul flights.
Southwest must use its planes where they can generate the most revenue, and that's not Love Field, Ricks said.
"There is no point in continuing to invest, or grow at Love Field, and hence in Dallas, absent change in the Wright Amendment," he said. "Stasis at Love Field, combined with significant growth elsewhere, means that, over time, Dallas becomes less important to our business plan. As that continues, Dallas becomes less competitive for future investment in terms of planes, people and capital investment."
Southwest began more than 35 years ago as a short-haul carrier serving Texas. It then picked up its low-cost, quick turnaround model and applied it to long-haul flights in 60 markets. Since 9/11, Southwest has been the only consistently profitable carrier among the major airlines.
If Southwest flew long-haul flights from Love, the competition could drive down D/FW's fares by up to 70%, Ricks said.
D/FW Airport has declared war against eliminating the Wright Amendment. The airport is deeply in debt with the cost of a new multibillion-dollar international terminal, built primarily for fortress carrier American Airlines Inc. (NYSE
: AMR). Delta Air Lines Inc.'s massive flight cuts have also freed up more than 20 gates."We are reluctantly being brought into this battle," said Kevin Cox, D/FW's chief operating officer. "It will be costly and inevitably a divisive battle."
In the past, Kansas and Tennessee sought to repeal the Wright Amendment, seeking lower air fares for their cities. Also, Southwest's arrival usually increases traffic up to five times. Ricks hopes Texas will lead.
But U.S. Sen. Kay Bailey Hutchison, R-Texas, didn't have encouraging words for Southwest.
"The Texas delegation might be split," Hutchison said. "Members in some areas are concerned about high fares. So they could have support for repeal in some areas. But North Texas members would be concerned about any kind of (revenue bond) default at D/FW because it would have such ramifications on our taxpayers."
Some say Southwest should be forced to move to D/FW. Hutchison said that wouldn't be right. During the previous legal battle over flights from Love Field, federal courts refused eight times to evict Southwest from city-owned Love. Keep reducing flts, and federal courts just may evict them.
After having fought for years to win the right to fly from Love, Ricks said the airline will now wage a grass-roots battle.
"We're very patient. It may take many years," Ricks said. "This is not about Southwest. It's about the freedom to fly."