American, Southwest reach tentative deal to resolve Wright dispute

Philadelphia
Source:
This story is sourced from Pro
See more Pro news »

<Adds  details of tentative agreement>

Southwest Airlines’ current level of service at Dallas Love Field will not be significantly impacted under today’s tentative agreement to modify the Wright Amendment between the low-cost carrier, American Airlines and the Texas cities of Dallas and Fort Worth.

The deal, which still requires US Congressional approval, sets a 20-gate cap at Love Field, with Southwest reduced to 16 gates within four years of the deal’s enactment. The remaining four gates will be split between American Airlines and Continental Airlines.

Southwest currently has 14 active gates at Love Field, and an additional seven not currently in use.

In return for agreeing to the gate restriction, Southwest, should the agreement become law, will be unencumbered by the Wright Amendment restrictions within eight years after it is enacted. This law currently limits Love Field carriers to nonstop services within Texas and the neighboring states of Alabama, Arkansas, Kansas, Louisiana, Mississippi, Missouri, New Mexico and Oklahoma.

The new deal also allows carriers operating from Love Field the immediate ability to offer through ticketing to destinations within the USA.

However, Southwest has agreed that international flights will remain prohibited at Love Field, with those rights exclusively held by Dallas/Fort Worth [DFW], American’s hub airport.

The low-cost carrier had contemplated service to the Caribbean and Mexico from its home base. But, in a recent press conference, CEO Gary Kelly noted that international service “is something that is very important to DFW airport and [the city of] Fort Worth, and it’s not to us”.

Although portions of Love Field will be redeveloped - with a minimum investment of $150 million coming from the city of Dallas - gates constructed by defunct operator Legend Airlines in 2000 will be demolished by Dallas upon the city’s acquisition of the lease “to ensure the facility can never again be used for passenger service”, according to the agreement.

The pact is subject to definitive contracts being approved by both city councils. It becomes void if the US Congress does not enact legislation to enforce the deal by December 31.

Southwest’s executive chairman and co-founder Herb Kelleher today celebrated the accord, calling it a “peace pact” and a victory for the traveling public.

Speaking at a press conference in Dallas, Kelleher said: “I have been involved in litigation, legislative struggles, and cuss fights over Love Field since 1972 - a period of 34 years. The fact that Southwest Airlines stands here today - stands here with Fort Worth, DFW airport, American Airlines, and the city of Dallas indicates, I believe, that there must be hope for world peace.

“And peace - and good will - is the essence of our agreement, not to mention certainty, stability, and tranquility.”

Kelleher admits that in agreeing to the tentative pact, all parties “have been compelled to make sacrifices - to yield on firmly held positions - to moan and grown and agonize over decisions and mutual concessions”.

American chairman and CEO Gerard Arpey in a statement also notes: “We firmly believe the Wright Amendment has served the region well, allowing DFW airport to become the economic engine of north Texas. However, this compromise allows our employees in Dallas/Fort Worth and nationwide to move forward and refocus our collective energy on our ‘Turnaround Plan’ and serving our customers in the best possible way.”

He adds: “In addition, the agreement includes terms to ensure its enforcement. Considering all the possible options, we believe this to be a pragmatic solution. It is clear that our supporters locally and nationwide had a significant impact in this process and we thank them for their ongoing support.”