No Love losses

Who says George Bush can’t change things? Just hours after President Bush signed a bill phasing out Dallas Love Field restrictions under the 1979 Wright Amendment, Southwest set a major expansion there. The discounter plans to fly to 25 previously prohibited airports from Love, although flights will involve an intermediate stop or change of plane. It now flies non-stop between Love, also its home base, and 18 cities, but because of the Wright Amendment, designed to protect the then-fledging, now giant D/FW airport, those flights are limited to the states that neighbour Texas.

If you prefer going beyond the region, you’d have to change planes, often in places in Texas such as Houston that have longer distance nonstops. The law, named after the powerful but disgraced Democrat Speaker of the House Jim Wright, also kept Southwest from advertising longer distance flight or selling a single-ticket itinerary. In effect, you had to pretend you weren’t really flying between Love Field and say, Chicago Midway: it was just a coincidence that you had also had a Midway ticket right next to your Love-Oklahoma City ticket, and you had to pretend that you really didn’t mind spending a little while in the Oklahoma terminal. (They have really cute little souvenir oil derricks there, in case you were wondering).

As Southwest grew it began to fight the restrictions and earlier this year finally hammered out a compromise among Dallas, Fort Worth, American, and others. The deal phases out the Wright limits but for now still keeps Southwest from offering long-distance nonstops between Love and most destinations; it does allow long-distance, same-plane service — the plane has to stop somewhere like Houston and then continue on to places like Baltimore/Washington or Washington Dulles or Manchester, New Hampshire, on the East Coast. The new routes are in a Southwest statement that also gives lotsa Love factoids: http://biz.yahoo.com/prnews/061017/datu042.html?.v=69

For an airline that schedules multi-segment itineraries-a flight can stop three or four times – it’s a no brainer. But fliers in North Texas, as they call the ‘Big D’ and Fort Worth and the whole darn-tooting region, win two ways, because American immediately slashed fares out of its D/FW hub on routes that compete with the new Southwest network.

Not content to let American’s challenge stand without response, and perhaps sensing that American was edging it out by adding double miles to the promotion, Southwest a few days later lowered Love Field fares yet again, to the $39-$79 range. So the question becomes: how strongly will American defend its largest hub? How much of a revenue premium will it get in its largest home market for the non-stop advantage?

American chairman Gerard Arpey said that “some very price-sensitive travellers” might avoid its slightly higher non-stop fares. Southwest isn’t worried because “We have very quick turns, which makes our one stop just barely a notch below non-stop”.

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