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Any Updates On DL Gates @ DAL - Part 2

Thu May 28, 2015 2:47 pm

Please continue the discussion here:

Any Update On DL Gates @ DAL? (by Dallas Apr 22 2015 in Civil Aviation)

Best,
Ben Soriano
Ben Soriano
 
LoneStarMike
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RE: Any Updates On DL Gates @ DAL - Part 2

Thu May 28, 2015 3:08 pm

This was the last post on the old thread.

Quoting commavia (Reply 96):
And no matter what the DOT thinks it can and cannot tell others to do, a judge will likely get the final say in this case. Southwest contends that the DOT's letter constituted essentially a non-binding suggestion, and not a legally-binding directive order, and has asked a federal court for an interpretation as such.

I found two things that might give us a clue on how the courts might rule.

The first is Dallas Love Field's Competition plan. (Supposedly, the last competition plan approved for Love Field is dated October 2009, but it's not posted on Love Field's website.) The one we're going to see is from 2001, but I think the process is the same now as back then. The most important part of it is the Scarce Resource provisions.

http://dallas-lovefield.com/resources-love-field-competition-plan.html

(click on the top red link titled "Airline Competition Plan July 31, 2001 Plan" to open the pdf file. Scroll down to page 7

Quote:
F. Use/lose or use/share policies for gates and other facilities

As noted above, the Main Terminal leases include gate-sharing provisions (“use it or share it” language referred to herein as the “Scarce Resource” provisions (see Exhibit C)) requiring accommodation of other airlines within the leased premises of the incumbent airlines.

The process for accommodating an airline needing space (“requesting airline”) has three stages. First, if the City were to have space available to lease directly, it would do so.

[SNIP]

Second, in the absence of space available for direct lease, the City will refer the requesting airline to parties who are known to have gates or gate capacity available.

[SNIP]

Finally, if neither of these approaches proves fruitful and if necessary to force accommodation by an incumbent carrier at one or more of the operational Main Terminal gates, the Scarce Resource provisions of the leases permits the City to
unilaterally require an airline to accommodate a requesting airline in its premises.

Next, go over to the left hand side and click on Exhibit C – the Scarce Resource provisions.

Part B says that the Lessee shall agree to accommodate other airlines at its Terminal Lease Area at such times that will not unduly interfere with Airline’s operating schedule and upon such reasonable terms as may be agreed upon between the Lessee and the requesting airline, taking into consideration of all the circumstances of such an accommodation agreement. At the bottom of page 21 (Part 4) it says that the Lessee shall accommodate requesting airline by sharing a portion of its Terminal Lease Area subject to the following conditions. (Here comes the key part)

Quote:
In case of a conflict between schedules of Lessee and the requesting airline, the Lessee shall have preferential use of its personnel and its Terminal Lease Area.

The second thing I found is the Wright Amendment Reform Act Public Law - not the bill approved by Congress - but the actual law that President Bush signed on Oct. 13, 2006. It's a pdf file and I can't include the link in the post because every time I try, I get the black letters on white background FORBIDDEN message from a.net, and lose my entire post. I cut and pasted the parts that talk about accommodating other carriers. For anyone wanting to read the whole thing, you can do an advanced Google search for the phrase “PUBLIC LAW 109–352” it’s the first link on the search results page.

PUBLIC LAW 109–352—OCT. 13, 2006


SEC. 5. LOVE FIELD GATES.

(a) IN GENERAL.—The city of Dallas, Texas, shall reduce as soon as practicable, the number of gates available for passenger air service at Love Field to no more than 20 gates. Thereafter, the number of gates available for such service shall not exceed a maximum of 20 gates. The city of Dallas, pursuant to its authority to operate and regulate the airport as granted under chapter 22 of the Texas Transportation Code and this Act, shall determine the allocation of leased gates and manage Love Field in accordance with contractual rights and obligations existing as of the effective date of this Act for certificated air carriers providing scheduled passenger service at Love Field on July 11, 2006. To accommodate
new entrant air carriers, the city of Dallas shall honor the scarce resource provision of the existing Love Field leases.


Further down the page it says:

(e) LIMITATION ON STATUTORY CONSTRUCTION.—
(1) IN GENERAL.—Nothing in this Act shall be construed—

[SNIP]

(E) to limit the authority of the Federal Aviation Administration or any other Federal agency to enforce requirements of law and grant assurances (including subsections (a)(1), (a)(4), and (s) of section 47107 of title 49, United States Code) that impose obligations on Love Field to make its facilities available on a reasonable and nondiscriminatory basis to air carriers seeking to use such facilities, or to withhold grants or deny applications to applicants violating such obligations with respect to Love Field.

(2) FACILITIES.—Paragraph (1)(E)—
(A) shall only apply with respect to facilities that remain at Love Field after the city of Dallas has reduced the number of gates at Love Field as required by subsection (a); and

(B) shall not be construed to require the city of Dallas, Texas—

(i) to construct additional gates beyond the 20 gates referred to in subsection (a); or

(ii) to modify or eliminate preferential gate leases with air carriers in order to allocate gate capacity to new entrants or to create common use gates, unless such modification or elimination is implemented on a nationwide basis.

So my interpretation is that if the Scarce Resource provisions are part of the leases now in effect at Love Field, then Dallas only has to make a reasonable effort to accommodate other airlines, but accommodation is not guaranteed. And Dallas is not obligated to modify or eliminate a lease or even create a common-use gate to accommodate any airline that does not have a lease or sublease. And if there are no time-slots available to accommodate the other airline, it would seem to me that the other airline is out of luck.

I think that’s why Gary Kelly said “It’s no different than any other situation. If we have time that’s available to accommodate, we always do that. If we don’t, we don’t and we won’t” in response to the Dallas Morning News’ question “What if the city says Southwest must accommodate Delta?”

I would also think that if the federal law says one thing and DOT says another think, federal law would prevail, but then again, I am not a lawyer. What do the rest of you think?

cjpark, thank you for answering the questions you did. I'll assume you don't know the answers to some of the others like how much DAL paid for Legend's terminal, etc. (I don't know either.)

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RE: Any Updates On DL Gates @ DAL - Part 2

Thu May 28, 2015 7:10 pm

In old thread, cjpark said:

"The other litigants wanted to make sure that Southwest faced the same regulatory environment that they themselves had to operate under. "

TI was a litigant, right. Didn't TTA/Treetops start out intra-state same as WN?
 
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RE: Any Updates On DL Gates @ DAL - Part 2

Fri May 29, 2015 3:19 am

Quoting justplanenutz (Reply 2):
Didn't TTA/Treetops start out intra-state same as WN?

Yes, but they got their certificate from the CAB. Back then (1945-1961) the TAC could render financial assistance in the acquisition, development, operation, and maintenance of airports, but it had no power of licensing or regulating. It wasn't until 1961 that the TAC was given authority to cooperate in activities of federal and state agencies, such as certifying air carriers operating within the state.

LoneStarMike
 
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RE: Any Updates On DL Gates @ DAL - Part 2

Fri May 29, 2015 8:54 pm

Quoting LoneStarMike (Reply 3):
It wasn't until 1961 that the TAC was given authority to cooperate in activities of federal and state agencies, such as certifying air carriers operating within the state.

So the origin of cj's beef is that, six years prior to WN's existence, the State of Texas decided to start certifying airlines? You can say what you want, but that man knows how to carry a grudge!
 
LoneStarMike
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RE: Any Updates On DL Gates @ DAL - Part 2

Sun May 31, 2015 11:23 am

Regarding Love Field’s gate cap – which is the primary reason Delta is having trouble accessing the airport – the reasons for the gate reduction from 32 to 20 were laid out in a written statement from DFW’s COO Kevin Cox that was part of a hearing before the Aviation Subcommittee of the House Transportation Committee in July 2006 urging Congress to pass the five-party agreement into law.

The link for his prepared statement is a pdf file, which I can’t post without getting the “FORBIDDEN” screen, but if you do an advanced google search for the exact phrase “Written Statement of Kevin E. Cox Chief Operating Officer” it will come up in the search results page (first link) and you can read it for yourself. Anything that is underlined is my emphasis.

Financial Challenge Facing DFW Airport

Quote:
In 1997, after waiting for a final interpretation by the courts over the Shelby Amendment and assessing the implications it would have on service levels at DFW Airport, the Airport embarked upon an extensive capital development plan designed to improve and expand Dallas/Fort Worth International Airport. This $2.7 billion Capital Development Plan was supported and authorized by the airlines, the DFW Airport Board, the City of Dallas, and the City of Fort Worth. After a series of unprecedented and unpredictable challenges including the terrorist attacks of September 11th, SARS, and the overall financial instability of the airline industry, this eight-year Capital Development Program came to a successful conclusion.

The program culminated with the opening of the new Skylink airport train, which opened to the public on May 21, 2005, and now connects all of the airport’s terminals by rail. Shortly thereafter, International Terminal D was opened to the fanfare of the traveling public on July 23, 2005. These two projects, combined with other airfield and roadway improvements, increased the Dallas/Fort Worth International Airport Board’s debt from $676 million to $3.8 billion, nearly a six-fold increase.

The airport judiciously pursued this long-term investment, completing the project on time and under budget in the face of these unprecedented challenges. Fortunately, DFW Airport was able to maintain a competitive cost structure well in line with other peer airports across the country. Although this increase in the airport’s debt load was anticipated, no one expected nor could have predicted that on the heels of this investment, Delta Air Lines would abandon its hub at DFW, jet fuel prices would hit an all time high, and Southwest Airlines would call for repeal of the Wright Amendment.
Delta Air Lines’ Decision to Eliminate Its Hub

Quote:
In 2004, Delta Air Lines began eliminating its hub at Dallas/Fort Worth International Airport as part of a larger restructuring of the airline. At the time, Delta Air Lines was DFW Airport’s second largest carrier, with 566 flights to and from 72 non-stop destinations. By the end of February 2005, Delta Air Lines had eliminated 522 of these flights and reduced its service to just three destinations–Salt Lake City, Cincinnati, and Atlanta. With the elimination of its hub, Delta Air Lines’ gate requirement fell from 28 gates it used to operate in Terminal E to just four. Some of these 28 gates have subsequently been released; unfortunately, as of today, DFW Airport still has 15 gates that remain vacant and many other gates that are underutilized. In addition to these gates, DFW has a satellite facility in Terminal A that is unoccupied and capable of handling 7 narrow body aircraft or up to 13 regional jet aircraft. Obviously, DFW continues to have excess gate capacity.

I’m thinking 522 daily inbound/outbound fights would have generated a lot landing fees (261) that DFW was counting on to help pay for the costs of the improvements. It’s important to keep in mind that Delta was one of the airlines that approved this project. I’m sure at the time they weren’t planning to abandon the DFW hub, but their departure did shift a substantial portion of the cost of the project to DFW’s remaining carriers. Obviously, Southwest did not approve these expenses since they were over at Love Field.

DFW’s reaction after learning that Southwest would attempt to have the Wright Amendment restrictions removed:

Quote:
From DFW’s perspective, an immediate and outright repeal was and is a direct threat to its financial stability having just completed a $2.7 billion capital development plan and having just lost Delta Air Lines’ hub. To determine the potential operational and financial impact of such a repeal, DFW International Airport commissioned a formal study.


The study examined the effect on DFW under two scenarios – a 32 gate limit and no gate limit at all.

Quote:
Given the projected growth at Love Field with the repeal of the Wright Amendment, SH&E concluded that DFW would lose a substantial amount of traffic under either of these two scenarios. In fact, SH&E predicted that DFW could lose as many as 408 daily flights, or 20 percent of DFW’s current operations, and as many as 21 million passengers annually, representing a 35 percent decline from current levels. With this substantial loss, DFW Airport passenger levels would decrease to levels seen 20 years ago, and it would take another 19 years for traffic just to recover to current levels.

In short, repealing the Wright Amendment, without a revision to Love Field’s gate limit, would amount to a 39 year penalty for DFW International Airport. Obviously, the traveling community and businesses that have come to rely on DFW’s economic vitality, and the airlines that moved to DFW in reliance upon the closure of Love Field would be adversely impacted. Equally traumatic would be the untold impact on the lives of the 268,500 men and women who have their jobs tied to DFW Airport.

Having recently added $2.7 billion in new infrastructure, while facing the prospect of losing 21 million passengers, 408 daily flights, and a significant number of domestic and international destinations, DFW Airport would obviously be under severe financial stress at a time when it is least equipped to handle it.

[SNIP]

Repealing the Wright Amendment, without a reduction in gates, would also have a dramatic impact upon DFW’s cost structure. DFW’s net cost per enplaned passenger in Fiscal Year 2006 is budgeted at $8.32. If the Wright Amendment were to be repealed and Love Field was permitted to operate at its 32-gate capacity, DFW Airport’s cost would be projected to increase 54 percent to $12.81. If the Wright Amendment were to be repealed and Love Field traffic could grow uninhibited, it is estimated that DFW’s net cost per enplaned passenger would increase 98 percent to $16.47. Without question, this would have a dramatic impact upon DFW Airport’s cost structure and its ability to attract new air service, creating a potentially irreversible downward spiral.

Cox went on to talk about how the repeal would negatively impact the neighborhood around Love Field. Y’all can read it if you want to, but the fact is the original Wright Amendment wasn’t enacted because of noise, traffic, safety, or environmental concerns. It’s sole purpose was to protect DFW Airport.

So they came up with this compromise. There were things in it that benefited each of the five parties, but no single party got everything they wanted.

A Delicate Balance Has Been Struck

Quote:
The Dallas Love Field Impact Analysis Update became the catalyst for the parties to work towards the solution which is being offered for this Committee’s consideration today. Applying this information, the Mayor of Dallas and the Mayor of Fort Worth were able to fashion a local solution which ultimately was agreeable to all parties. The fundamental elements of the solution which require Congressional action
involve the following:

• to immediately permit airlines serving Love Field to offer through ticketing between Love Field
and any destinations through any point in Texas, New Mexico, Oklahoma, Kansas, Arkansas,
Louisiana, Mississippi, Missouri, and Alabama, and to market through services;

• to continue to limit charter flights as originally contemplated under the Wright Amendment

• to continue to restrict Love Field to domestic operations;

• to codify the locally sanctioned and established gate limit of 20 gates at Love Field; and

• to eliminate all remaining restrictions on air service from Love Field after eight years from
enactment of legislation.

Each element of this proposal is essential and interdependent. As an example, with a 20-gate limit at Love Field, the impacts from repealing the Wright Amendment are mitigated for those residents who live in and around Love Field. Similarly, the impacts on DFW International Airport are reduced with this 20-gate limit. Additionally, the consumer will immediately benefit from more flight options and more competition with through ticketing from Love Field to any destination. Finally, with 8 years to work on filling its unused gate capacity and to adjust to its new cost structure given the $2.7 billion in new investment, DFW Airport and its tenant airlines can better prepare for the ultimate repeal of the Wright Amendment.

It was not Southwest who wanted a gate-constrained Love Field in order to keep out competition. It was DFW Airport who wanted a gate-constrained Love Field to help it cope with the financial instability it was facing at the time.

LoneStarMike
 
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RE: Any Updates On DL Gates @ DAL - Part 2

Sun May 31, 2015 11:38 am

In that same statement, this was what Kevin Cox of DFW had to say about limited access to Love Field for other carriers. Anything that is underlined is my emphasis,

Access into Love Field/Marketplace

Quote:
Recently, a few parties have raised concerns that this local proposal limits access into Love Field and/or the marketplace. At the outset, it is important to note that Love Field has had excess gate capacity for several years. It is slightly ironic that only after press reports surfaced that a potential solution was in the works did any carrier express any public interest in gates at Love Field. Regardless of the timing, the fact is that carriers have access into Love Field today and will tomorrow if this solution is ultimately enacted.

As articulated in the Airline Competition Plan submitted by the City of Dallas for Love Field on July 31, 2001, “the operational Main Terminal gates at Love Field are all subject to scarce resource provisions that, when invoked, render those gates preferential use gates.” Thus, the scarce resource provision in the lease allows the city of Dallas to require airlines to share gates that are not fully used.

[SNIP]

In fact, the City of Dallas even offers its support to the requesting carrier to assist in the negotiation of reasonable sublease terms. To date, this process has been an unmitigated success as outlined in Love Field’s Competition Plan, in that “there have been no cases in which an air carrier that was ready and willing to begin or expand service to Love Field has been unable to do so due to inability to secure reasonable access to needed facilities.” Despite rhetoric to the contrary, there is no viable reason to believe that this approach will not have similar success in the future.

The reason Love Field had excess gate capacity for several years was because very few airlines wanted to serve Love Field due to the Wright Amendment restrictions. That is also the reason that Love Field’s competition plan up until that time had been an unmitigated success. When you adopt a plan that decreases the total number of gates from 32 to 20, while increasing the number of destinations that can now be served nonstop, then of course the gates are going to be fully used.

Cox continues:

Quote:
It is also critically important to understand that every carrier today has unimpeded access into Dallas/Fort Worth marketplace. The fact is that even if carriers could not access Love Field through the accommodation provisions, which to date, none of the objecting carriers have even applied; carriers can still access the marketplace by flying directly into DFW International Airport. As discussed earlier, Love Field and DFW Airport are a mere 8 miles apart. There is no question that these two airports serve the same marketplace.

This is the same point that many were trying to make in the previous thread. Some have pointed out that Southwest will say DAL & DFW are different markets, then turn around and say the exact opposite, but it doesn’t really matter what they say. What matters is how DOT classifies the two airports. DOT classifies DAL & DFW as two airports serving a single market. When you go to the Consumer Airfare report and look up statistics for the DFW Metroplex, in Table 6, it combines statistics for both airports and gives you a sum total. If you want to know the breakout for each individual airport, you have to go to Table 1a. Here is the description of Table 1a.

Quote:
Table 1a provides information for airport pair markets rather than city pair markets. This table only lists airport markets where the origin or destination airport is an airport that has other commercial airports in the same city. Midway Airport (MDW) and O’Hare (ORD) are examples of this.

When Cox testified back in July 2006, the restrictions were still in place. Although the prohibition for through-ticketing was removed later that year, the ability to fly nonstop to destinations outside the perimeter remained in place until October 2014. That’s the reason that none of the objecting carriers had applied for gates at Love Field when Cox testified in July 2006. When Cox brought up the fact that even if carriers could not access Love Field through the accommodation provisions that would seem to indicate that carrier access to Love Love Field might potentially be a problem. So did Kevin Cox really think Love Field’s competition plan would continue to be a success?

Back in 2006, when the negotiations were ongoing, there were at least two airlines who were complaining about Love Field’s limited access for new entrant carriers due to the 20 gate cap. One was Northwest. Their regional affiliate was negotiating to purchase the former Legend Terminal and turn it into a six-gate regional jet focus city, until Dallas Mayor Laura Miller said she would seek to have Legend’s terminal condemned and torn down. The other airline was jetBlue, who had expressed an interest in leasing 2 gates once the perimeter restrictions had been eliminated.

Regarding jetBlue’s objections, this is what Cox had to say.

Quote:

As referenced earlier, DFW Airport has 15 gates that are currently available to be leased and many other gates that are currently underutilized. Moreover, DFW International Airport has one of the most aggressive Air Service Incentive Programs in the country. As an example, a carrier that is willing to offer new domestic air service to one of DFW’s top 50 domestic markets is eligible to receive up to 6 months free landing fees, up to $100,000 in marketing support, and an additional $50,000 in marketing support if the carrier is new to DFW. To put that in perspective, if JetBlue Airways were to initiate service from John F. Kennedy Airport to DFW with just three daily flights, then the carrier would be eligible to
receive $479,000 in financial incentives. If JetBlue Airways were to fly 20 flights a day to five destinations as recently suggested in a local newspaper, then JetBlue would be eligible to receive $2.9 million in financial incentives from DFW Airport.

[SNIP]

DFW Airport has diligently sought to bring JetBlue Airways to the marketplace and will continue to do so. Officials from DFW Airport have met with officials from JetBlue Airways 22 times since the airline’s inaugural flight back on February 11, 2000. We have provided them with detailed presentations and numerous financial incentives all designed to convince them to enter DFW marketplace. In fact, a DFW official was on JetBlue’s inaugural flight from JFK to Fort Lauderdale for the sole purpose of trying to convince JetBlue Airways officials to consider serving DFW International Airport.

In spite of the incentives being offered by DFW, it would be another 6 years (May 1, 2012) before jetBlue inaugurated service at DFW with three daily flights to BOS. In the three years they’ve been at DFW, have they added any new destinations? No. Have they increased frequency on the DFW-BOS route? No. In fact they have cut one BOS flight and are now down to two. Is this how Kevin Cox defines success? If the answer is "no" I think we can all understAAnd the reason why.

Cox concluded his statement about jetBlue by saying:

Quote:

In doing so, the carrier will avail itself to one of the most aggressive air service incentive programs in the country. If JetBlue or any other carrier chooses not to, then that is their choice. However, that choice should not serve as a legitimate basis to object to the local solution that is being offered here today.

So he’s basically saying “Just because there’s a possibility that jetBlue or another carrier may not be able to get in at at a gate-restrained Love Field, that’s not a legitimate basis to object to our five-party agreement.” I guess Congress agreed with him, because they passed the bill. So if Congress didn’t care whether or not jetBlue had access to Love Field, then why should they care about Delta?

LoneStarMike
 
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RE: Any Updates On DL Gates @ DAL - Part 2

Sun May 31, 2015 11:48 am

Another point I'd like to make is this. For those of you in the other thread who have asked "How is giving Southwest 90% of the gates at Love Field "increasing" competitition? This is how I see the situation.

Consider these three markets – Chicago, Houston, and Dallas/Fort Worth. In Chicago, you have the legacy airport (ORD) and the low-fare airport (MDW.) In Houston, the legacy airport is IAH and the low-fare airport is HOU. In the Dallas/Fort Worth Metroplex, the legacy airport is DFW, while the low fare airport is DAL.

The increased competition from the Wright Amendment Reform Act has very little to do with the number of airlines that are serving Love Field. It has to do with the increased number of destinations that can now be served nonstop out of both DFW and Love Field.

Let’s go back to the Fall of 2005. At the time, WN was serving about 17 non-stop markets out of Love Field. AA and the other airlines at DFW were price-matching on those routes. But they were charging higher fares on non-stop routes outside the perimeter. MCI and STL in particular had high fares because AA had a monopoly on those routes. In Q3 2005, AA’s DFW-MCI market share was 89.3% and their DFW-STL market share was 91.3%.

In December 2005, WN was able to begin flying nonstop from Love Field to both MCI & STL. AA ( who also flew to MCI & STL out of Love Field) was forced to match WN’s fares at DAL and DFW. There was increased competition in those two city-pairs at both airports.

What happened as a result of the increased competition in those two individual markets?

Air Traffic to Missouri Surges
June 2, 2006


Quote:
The number of passengers flying to St. Louis or Kansas City from either Dallas/Fort Worth Airport or Love Field rose 43 percent in January and February, the most recent data available, compared with the same period in
2005, according to the government.

Mike Boyd attributed the increase to introductory fares (that’s a fair point) and added “let’s see if it keeps up.”

I looked up the stats for both markets for Q3 2005 (before Missouri was added); Q3 2006 (after Missouri was added while introductory fares were still in effect); and for Q3 2014 (9 years later)

Q3 2005
MCI – 711 daily passengers (total in both directions) – $233.26 average one-way fare
STL – 774 daily passengers (total in both directions) – $216.33 average one-way fare

Q3 2006
MCI – 1353 daily passengers (total in both directions) – $107.89 average one-way fare
AA market share – 57.8% – WN market share – 40.6%
STL – 1459 daily passengers (total in both directions) – $102.64 average one-way fare
AA market share – 64.4% – WN market share – 34.3%

Q3 2014
MCI – 1112 daily passengers (total in both directions) – $162.72 average one-way fare
AA market share – 45.1% – WN market share – 51.1%
STL – 1005 daily passengers (total in both directions) – $208.39 average one-way fare
AA market share – 45.0% – WN market share – 51.8%

Total O&D traffic has dropped from its peak when introductory fares were being offered, but is still higher than it was before Missouri was added.
Average one-way fares have risen from the introductory fares, but are still lower today than they were in 2005 – nearly 10 years ago.
Neither carrier has what I would call a monopoly in either one of those city-pairs.

Fast-forward to October 13, 2014 -


Increased competition may lead to short-term and long-term fare drops on certain routes
October 9, 2014


Quote:
That's the day Southwest will begin seven non-stop routes from Love to Baltimore, Chicago, Denver, Las Vegas, Orlando, Washington D.C. and Los Angeles. Then on November 2, the airline will add eight more to Atlanta, Fort Lauderdale, New York, Phoenix, San Diego, Nashville, Tampa, and Orange County, California. Those will be the routes to watch.
"On those routes you're seeing some big drops. Anywhere from 20 to 45 percent at least in the short term period while American and Southwest beat each other over the head on those non-stop routes," said [Rick] Seaney. [CEO and Founder of FareCompare.] Seaney said the reason for the big price drop can be summed up in one word: Competition.

So by November 2, there were 15 new markets where AA (out at DFW) and WN (over at Love Field) were competing.

Fast-forward another 7 months

American Airlines plans to keep being aggressive on Dallas fares
May 14, 2015


Quote:
American Airlines chief financial officer Derek Kerr indicated Thursday that American won’t be backing off in the current fare cutting in the Dallas/Fort Worth market.

Since the Wright amendment expired Oct. 13, Southwest Airlines has boosted its flights and destinations significantly out of Dallas Love Field, and Virgin America has started service from Love Field to five cities – all with introductory fares that haven’t returned to pre-Oct. 13 levels.

American has had to match, as has ultra-low-fare carrier Spirit Airlines and other airlines flying out of Dallas/Fort Worth International Airport.

At a conference, Kerr was asked about Dallas fares and when he thought the price-cutting would abate

Quote:
“Yeah, we’ve been aggressive on it. We plan on matching. We have matched on prices. There’s some view that, you know, Spirit’s customers aren’t the same customers as we want to have, but we disagree with that. We think we’re their competitor just like anyone else and we need to match.

“So we have in Dallas – it’s very competitive with Love Field opening up. Southwest has always been a rational competitor and we’ve always done very well competing against them in Phoenix in our past US Airways life, so we know how to compete with them. So we’re going to compete hard for everything in Dallas as we move forward.”

Come August 9, WN will be offering nonstop service in 51 different markets. AA and everyone else out at DFW will be competing with WN in those markets.

And because there are so many new destinations that Love Field carriers can now serve nonstop, Love Field is competing more with DFW. I don’t think that sits too well with DFW, which is probably why Love Field is capped at 20 gates.

The Wright Amendment Reform Act was never intended to increase competition among the airlines at Love Field.. It was meant to increase competition among all airlines on individual city-pair markets throughout the region.

LoneStarMike
 
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RE: Any Updates On DL Gates @ DAL - Part 2

Mon Jun 01, 2015 3:02 pm

Quoting LoneStarMike (Reply 7):
LoneStarMike

Just bumping this back up to the top. We were having such a good time with a "Who shot JR" argument about this, then you go a post a bunch of facts that pretty much speak for themselves. Where's the fun in that   .
 
justplanenutz
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RE: Any Updates On DL Gates @ DAL - Part 2

Mon Jun 01, 2015 9:56 pm

Here's some actual news:

http://cityhallblog.dallasnews.com/2...0-cars-and-get-a-hotel-maybe.html/

Though that is about the new garage, note that 8.2 million pax is what the City says is max capacity.
 
LoneStarMike
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RE: Any Updates On DL Gates @ DAL - Part 2

Mon Jun 01, 2015 10:23 pm

Quoting justplanenutz (Reply 9):
note that 8.2 million pax is what the City says is max capacity

And keep in mind, they're talking about 8.2 million enplanements - i.e. departing passengers. If you have an equal number of deplanements, that would be 16.4 million total passengers. That's pretty impressive for a 20-gate terminal, and it's likely possible because the carriers serving Love Field fully use their gates.

By comparison, AUS has 25 gates and our terminal is only designed for 11 milliion passengers.

LoneStarMike

[Edited 2015-06-01 15:32:42]
 
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RE: Any Updates On DL Gates @ DAL - Part 2

Fri Jun 05, 2015 5:44 pm

Courtesy: Dallas Morning News

Analyst: Dallas Love Field situation ‘Getting Uglier By The Day’

"“Regardless, 7/6 is looming and DAL has made it clear they don’t plan on leaving Love Field. It wouldn’t be an unreasonable thing to assume that LUV is keeping fares lower than they normally would at Love Field in order to create an uncomfortable competitive dynamic for DAL in order to coax DAL into leaving Love Field without a fight on 7/6,” Keay wrote."

http://aviationblog.dallasnews.com/2...on-getting-uglier-by-the-day.html/
 
justplanenutz
Posts: 593
Joined: Fri Feb 10, 2006 9:48 am

RE: Any Updates On DL Gates @ DAL - Part 2

Sat Jun 06, 2015 12:17 am

For all the unsupported allegations that WN demanded the gate cap and seeks to shelter itself from competition, I think this quote speaks worlds:

“We believe a good portion of pricing weakness we’re seeing domestically can be tied back to Love Field. LUV [Southwest Airlines] is discounting a lot of fares out of the D/FW area, causing AAL [American Airlines] to match on price at DFW airport, and other airlines and other cities have been dragged into that mess as competition spills into the destinations that LUV is serving out of Love Field (like UAL [United] in Chicago, for example),” Keay wrote.

THAT is why the gate cap exists.
 
cjpark
Posts: 1226
Joined: Sat Feb 12, 2005 1:46 am

RE: Any Updates On DL Gates @ DAL - Part 2

Sat Jun 06, 2015 5:47 pm

Excerpt from the Testimony of Laura Miller Mayor of Dallas, TX


REFORMING THE WRIGHT
AMENDMENT
(109–89)
HEARING BEFORE THE SUBCOMMITTEE ON AVIATION
OF THE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES ONE HUNDRED NINTH CONGRESS
SECOND SESSION

JULY 12, 2006


The five parties reached an agreement, and the top three things
on our minds are the following, number one, to keep the third busiest
airport in the world strong. It is our economic engine for north
Texas, DFW Airport. We created it together the two city cities and
our bond covenants say that the two cities shall make sure that we
protect that asset.

Number two, we wanted to protect the neighbors around Love
Field, the residents and businesses. It is a landlocked intercity airport
and we have done an enormous amount of work in the last 10
years to make sure that we had a balance between growth in competition
and also the protection of the neighborhoods regarding pollution,
ground congestion, and noise.

I want the committee to know that we have the gentleman,
George Vitas, who is the senior person who did the Love Field master
plan in 2001 that originally recommended 32 gates as long as
the Wright amendment stayed in place. We updated that for purposes
of these discussions between the two cities, and that number
went to 20 because the same consultants looked at what is the very
best number of gates to have without the Wright amendment; if
that one variable changed, then how many gates would be appropriate
in terms of the environment, in terms of economic growth,
and in terms of operations and safety. And that is why the number
is 20 and not 17 or 22 or 25, and that gentleman is here behind
me and is able to answer a lot of the questions that I heard being
posed to the gentleman with the FAA if you look in terms of our
master plan work that we have been doing for the last 10 years.

Our solution has the support of the committees surrounding Love
Field, the business community, and the president of the Greater
Dallas Chamber of Commerce, Erle Nye, who has been deeply involved
in the process, came to the Hill with us a few weeks ago to
talk to some of you about the initiative.

The Love Field Citizens Action Committee, as Congresswoman
Johnson said, has written letters expressing their support. They
are very detailed and that has been entered into the testimony.
This agreement will gradually open Love field to allow direct nonstop
flight to and from the cities throughout the United States in
a manner that protects the neighborhoods and also enables Dallas/
Fort Worth International Airport to cement its lead role in our region.
It will free Love Field from almost 30 years of control and,
importantly, allow Dallas to move forward in updating the master
plan that I referenced.

The master plan concluded that our master plan goals can be
fully implemented under the 20 gate limit set by the five-party
agreement. It maintains the ground traffic noise and air quality
impacts of the air service that 32 gates with the Wright amendment
would bring. The 20 gate limit without the Wright amendment
will also enhance safety and efficiency.

A few airlines, as you know, have complained that the five-party
agreement would bar new carriers from Love Field. Not so. There
will be room for new entrants and for new service to other destinations
from our airport now and after the airport is reconfigured.
Today our airport has 19 gates that are currently in use. The solution
will increase the current number of operational gates from
19 to 20. New entrants are welcome under our existing gate-sharing
provisions, and that does not change under the agreement and
we welcome all entrants to Dallas Love Field as we do Dallas Fort Worth International Airport.









Excerpt of Question and Answer between Congressman Mica and Herb Kelleher.

Mr. MICA. I thank you and each of the witnesses for your testimony.
I just have a quick question. Maybe Mr. Kelleher or one of
you can answer it. I have concern about tearing down gates any39
where when we have infrastructure needs at almost all of our airports,
particularly in a major metropolitan area like Dallas/Fort
Worth. Also there is taxpayer money involved in the construction
of those. I guess part of the plan is to pay back some of the money;
is that correct?
Mr. KELLEHER. Actually, Mr. Chairman, there is no taxpayer
money.
Mr. MICA. There is none?
Mr. KELLEHER. No. It is all paid for by the airlines that serve
Love Field. So the city of Dallas——
Mr. MICA. So there is no infrastructure that will come down that
has any AIP money or Federal money?
Mr. KELLEHER. Well, no, no, no. I don’t believe so. And may I add
something to that?
Mr. MICA. Go ahead.
Mr. KELLEHER. This reduction in gates came about not because
it was the strong desire on the part of some of the participants, but
really came about because of the prior master plan done by the city
of Dallas that allowed the 32 gates at Love Field—provided that
most of them were used by regional jet aircraft rather than heavier
aircraft such as Southwest Airlines flies. We ourselves are giving
up five gates that are our gates as part of this deal. We are going
from 21 to 16 gates. And during that entire period of some 25
years, no other carrier ever wanted to come in to utilize those
gates. And any carrier that is desirous now of serving Love Field
can easily be accommodated even after those gates come down.





[Edited 2015-06-06 10:54:00]

[Edited 2015-06-06 10:55:45]
"Any airline that wants to serve the [region] can go to DFW today and fly anywhere they want," WN spokesman Ed Stewart
 
LoneStarMike
Posts: 2808
Joined: Sat Jul 01, 2000 1:02 pm

RE: Any Updates On DL Gates @ DAL - Part 2

Sat Jun 06, 2015 9:18 pm

Thank you cjpark.

Here is the link to the testimony given on July 6, 2012. There was a lot of discussion that followed about new carrier access but you left that out. Here is some of that discussion. Anything underlined is my emphasis.

Quote:
Mr. Oberstar. Now, in the attachment the accommodation provisions, "Lessee does hereby agree to accommodate other airline. Lessee says...terminal lease area at such times that will not unduly interfere with airlines operating schedule." What does "unduly interfere with" mean? Who defines that? Is that a term of art? A term of legislative art? A term of judicial art?

Ms. Miller. Well it was crafted by the Dallas City Attorney's Office and we understand, since it has never been tested, we have never had a conflict; that we should, if we are responsible, create a very clear policy using this as the template for how we are in real terms going to be executing this. This gives us the authority to tell an American or a Southwest, you have to make room. But I think that like other airports like you cited that have this issue of capacity, we need to have a very specific policy in place so that the tenants have a clear expectation for how it is going to work when the director says we shall make room for Jet Blue and this is how we are going to do it.

And how they're going to do it is they're going to require WN/VX to share if their gates have available time. The policy is very clear on that.


Quote:
Mr. Oberstar. Now, I listened carefully earlier when discussion was made of Jet Blue, and Mr. Costello raised the issue, and I think Dallas/Fort Worth says we have plenty of room for Jet Blue, they can come here. But they may not want to come, just as Southwest had no intention of getting into DFW and paying those larger landing fees. They are quite happy with 55 cents a thousand pounds. Right, Mr. Kelleher?

Mr. Kelleher. Well, Mr. Oberstar, our headquarters is at Love Field. We have invested $200 million in Love Field and this agreement calls for us to invest another $200 million. So it is a little different from the situation that any other carrier is in, and we have been the ones that have been restricted at Love Field since 1979 by the Wright amendment.

Mr. Oberstar. I know you have been restricted at Love Field, but you have been laughing all the way to the bank as well.

Mr. Kelleher. Well, great service at low fares.

Mr. Oberstar. That is for sure, and a monopolistic position. And in case of a conflict, lessee shall have preferential use of its terminal lease area. If you combine rather vague language about "unduly interfere with" and section 4(a), "in case of a conflict, lessee shall have preferential use of both," now American and Southwest are in the catbird seat. You keep anybody out.

Mr. Cox. Can I respond to that?

Mr. Oberstar. Anyone can respond to that.

Mr. Cox. Congressman Oberstar, first, the way the language is drafted I believe provides the city of Dallas greater flexibility than the standard language that is drafted. Typically you find in those leases that if you are turning your gates at six times a day, then it is considered fully utilized and nobody else can get in. The way it is drafted, I believe, provides the city of Dallas a greater hammer to force an accommodation than most other places that would allow that.

(Which is why WN & VX have planned 10 departures per gate.)

Quote:
The other thing is, I would argue the difference is that Southwest has been there for a long time and has an asset of which they lease. Jet Blue does not. Nobody has ever guaranteed access into an airport, as evidenced by all the other airports that I talked about, but they are guaranteed access into the marketplace. And 8 miles down the road, Jet Blue can fly basically for free for 6 months, and we believe that is a good deal. And we believe nobody is guaranteed access to any particular airport but should have access to the marketplace. And with great capacity and an extremely generous air service incentive plan, after multiple meetings with Jet Blue we think they can make the right business decision. If they really want to enter the marketplace, they can.

Mr. Oberstar. Well, Southwest was presented with a good business decision in 1991 when we had the hearing and Kevin Fahey said we can have 18 gates in 3 weeks for Southwest and we can have a temporary basis and we can have permanent gates in 18 months. And Mr. Kelleher thought that was not as good of a deal as he was ready to take.

Mr. Kelleher. No, again because we do not want to split our operations in our home city, and there are very few airlines, including American Airlines in Chicago, if I may say that, Gerard, that want to split their operations between two airports in the same city. That is the reason why American does not serve Midway Airport, Southwest Airlines does not serve O'Hare Airport, and that is why the other spoke carriers do not want Peotone Airport because it would be a horrible situation from Southwest Airlines' standpoint to have its headquarters, all of its investment at Love Field take half of that service, send it to DFW Airport and suddenly have the two airports competing against one another in the hands of the same carrier. That is not true of Jet Blue or anyone else that wants to come in.

Mr. Oberstar. Let's understand something a little further. At O'Hare when an international agreement is reached between the United States and another country in a memorandum of understanding or an aviation trade open skies agreement, and it calls for service into O'Hare for whatever, five, six or seven slots, American and United both are told you will provide slots. I do not know if you still have sales of slots, but you have to sell them, and then you have to go and find other opportunities to replace your lost slots. But this is the U.S. DOT telling you and United you give up space so an international competitor can come in.

Now, supposing JetBlue makes the decision and we want to come in and we want to get in the Love Field game, too. Who is going to tell you, Mr. Kelleher, you have got to give up space to accommodate them?

Mr. Kelleher. Well, first of all, there is no international treaty that pertains to Love Field that sets aside the local situation with respect to the proprietorship of the City of Dallas and how many gates it wants to have.

Now, let me say this to you, Mr. Oberstar, if I might, the biggest impediment and hindrance to Southwest Airlines' expansion after deregulation in 1978 was not being able to get gates at other airports, whether you are talking about San Diego or Los Angeles, or whatever might be the case. And that was because they had exclusive use leases where one carrier had 14 gates with five departures a day and said, well, if we do all your ground handling charging you three times as much as the city charges us, you can get in.

What is my point? Everybody suffers from trying to get into an airport where there are not a lot of available gates. But the situation has improved today because airports haven't gotten rid of their exclusive use leases, which is the ones that we ran into and now have these preferential use leases where there is room for another carrier. And it is very simple. There is no mystery to the way it operates, and that is, I can show you Southwest Airlines schedule, gates schedule, we have got hours on our gates where another carrier could operate there, and that doesn't have anything to do with American or Continental Airlines either. And we would simply be told by the City of Dallas, you have got these vacant spaces in your gate utilization and by golly you are going to put another carrier in there.

Of course, with 10 departures per gate, they will no longer have vacant spaces in their gate utilization and neither will VX.


Quote:
Mr. Oberstar. They would be able to tell you that?

Mr. Kelleher. That is the way it works, oh, yes absolutely.

Mr. Oberstar. Well, the problem you defined just a moment ago in your remarks is why I included in the 2001 reauthorization of FAA a requirement that every airport have a master plan included showing their competition the plan.

Would the parties agree to a legislative provision that would give FAA authority to take all necessary actions to ensure that carriers seeking to initiate or expand service at Love Field have access to necessary facilities on reasonable terms? Provision could apply if FAA determined that new entrants are unable, as you have described moments ago, Mr. Kelleher, to obtain access under the procedures of this agreement?

Mr. Kelleher. I will respond to that, if I might lead off, I am sure the mayors have some comment about it, but, if that were the case, then this agreement is a nullity because it is absolutely essential to the cities of Dallas and Fort Worth for a variety of reasons that the airport be limited to 20 gates, of which we gave up 5.

And if that went down the tube, then I am afraid there wouldn't be any agreement at all because certainly, American Airlines and DFW, one of their interests, Mr. Oberstar, is not jeopardizing the status of DFW. So having a total of 20 gates is what assures that? Because the gates limit the operations that you can have from Love Field.

Mr. Oberstar. The language I am talking about would not--well, we can make it clear that the FAA could not require an increase in gates.

Mr. Kelleher. You are saying the FAA could take gate leases away?

Mr. Oberstar. To take necessary action to ensure that carriers have access to necessary facilities.

Mr. Kelleher. Well, would you apply that to Long Beach, California where JetBlue has 27 out of 35 available slots?
Would you apply it to Washington National? Would you apply it to all airports across the Nation? And the reason I ask is that is that that could be very helpful to Southwest airlines.


Mr. Oberstar. But there are other ways in which access can be obtained at Washington National.

And, I don't know about Long Beach. That might be an interesting--but they don't have the two airport scenario that we are dealing with here.

Mr. Kelleher. No they have the 41-slot scenario.

Mr. Oberstar. They do. Mr. Arpey.

Mr. Arpey. Mr. Oberstar, I think that perhaps we haven't explained it as artfully as we should have, or carefully as we
should have, but I think in the agreement that we have created, we are doing precisely what you are asking for, and that is, that if any airline wants to come in and operate at Love Field on the same terms and conditions that American, Southwest and Continental operate today, this agreement says that the City of Dallas is going to make that happen as part of this agreement.

"Today" - meaning 2006 when most of the restrictions were still in place.


Quote:
So I think we have recognized your concern as we negotiated our way through this, and so I think the current agreement does what you are suggesting.

Mr. Oberstar. The language of the current agreement is to the extent a new entrant carrier seeks to enter Love Field, the
City of Dallas will seek voluntary accommodations from its existing carriers to accommodate the new entrant's service.
There is no enforcing mechanism.

Mr. Moncrief. But that is the first thing they do, Mr. Oberstar, they seek voluntary response from the other carriers. If they don't do that, then the City of Dallas has the authority to come in and say you will.

Mr. Oberstar. It goes on to say if its carriers are not able or not willing, the City of Dallas agrees to require the sharing of preferential leased gates.

But what is the--but it says this, agrees to require the sharing of preferential leased gates, but then you go back to
the attachment to the accommodation, it says in the case of a conflict between schedules of lessee and the requesting
airline, the lessee shall have preferential use.
So you require on the one hand, but you vitiate it on the other.

Mr. Cox. Mr. Chairman, that, I mean, ranking member, that is not different than virtually every other accommodation lease that exists out there in the country.

Mr. Oberstar. We will take a look at that and see if that is the case.

Mr. Cox. You have the ability to accommodate, but you don't take rights away from somebody that had already contractually obtained those rights, but you have the ability to try to, to the extent possible, to fit those people in.

Mr. Oberstar. That is true in a majority of interest clauses.

Mr. Arpey. I would like to add, though, on the JetBlue issue, and we can start with the first provision and American will volunteer today to open up gate space for JetBlue at Love Field.

Mr. Kelleher. Tell them to come on down. We welcome them too.

Of course by “today” they meant 2006 when the only restrictions being removed were those of through-ticketing.

I guess Congress felt that as long as JetBlue had access to “the marketplace” then the agreement was ok since they passed it. I don’t see why things would be any different with Delta.

LoneStarMike
 
cjpark
Posts: 1226
Joined: Sat Feb 12, 2005 1:46 am

RE: Any Updates On DL Gates @ DAL - Part 2

Sat Jun 06, 2015 9:40 pm

"And any carrier that is desirous now of serving Love Field can easily be accommodated even after those gates come down."


The gates are gone, Delta wants to fly from DAL.
"Any airline that wants to serve the [region] can go to DFW today and fly anywhere they want," WN spokesman Ed Stewart
 
LoneStarMike
Posts: 2808
Joined: Sat Jul 01, 2000 1:02 pm

RE: Any Updates On DL Gates @ DAL - Part 2

Sat Jun 06, 2015 11:01 pm

Quoting cjpark (Reply 15):
"And any carrier that is desirous now of serving Love Field can easily be accommodated even after those gates come down."

"Now" meaning nine years ago when the testimony was given.

Quoting cjpark (Reply 15):
The gates are gone, Delta wants to fly from DAL.

Unfortunately, the gates are full and there's no time slots available.

I think DFW's COO put it well.

Quote:
Nobody has ever guaranteed access into an airport.

[SNIP]

And we believe nobody is guaranteed access to any particular airport but should have access to the marketplace.

[SNIP]

That is not different than virtually every other accommodation lease that exists out there in the country.

[SNIP]

But you don't take rights away from somebody that had already contractually obtained those rights, but you have the ability to try to, to the extent possible, to fit those people in.

Due to the schedules of VX and WN it is not possible to fit DL in at Love Field. Delta has access to the marketplace. That is what matters. And now that Delta has emerged from bankruptcy as a much stronger (and profitable) airline, they are able go back to DFW and help pay off the 35-year bonds issued to pay for the improvements they and the other airlines approved back in 1997.

LoneStarMike

[Edited 2015-06-06 16:04:12]
 
CO777DAL
Posts: 430
Joined: Thu Feb 08, 2007 6:01 am

RE: Any Updates On DL Gates @ DAL - Part 2

Sun Jun 07, 2015 3:07 am

Speaking of DL, here is their 717 at gate 15 at DAL. Taken from VX.
Worked Hard. Flew Right. Farewell, Continental. Thanks for the memories.

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