Southwest Airlines has begun a one year countdown to the day the Wright Amendment will disappear.
The Amendment, named after former US House Speaker Jim Wright, restricts Southwest’s ability to fly from in-town Dallas Love Field. Originally Southwest was restricted to Texas and the immediately adjacent states. The Amendment has been modified several times. Today the carrier may fly anywhere within the US beyond the exceptions with one stop. Love Field is now restricted to 20 gates; Southwest controls all but a few of them.
The restrictions were put into place to protect the then-new Dallas-Ft. Worth Regional Airport, which was constructed mid-way between the two cities. All the airlines at the time served Love Field and when DFW was created, they all agreed to move to the new airport and close Love Field to airline traffic. Except Southwest, which didn’t exist at the time of the agreement but which began service from Love in the interim between the signing of the agreement and the opening of DFW. The attempts by Braniff International Airways and
Trans Texas International (nee TRANS Texas) to put Southwest out of business are industry folklore.
The fear was that Southwest and Love would hurt DFW and the airlines competing from the distant airport, including American Airlines. When Southwest a few years ago launched a full-scale attack on the Wright Amendment, American led the charge to block the effort. The compromise was the gate restriction, the one-stop service and a five year phase out.
Who could have foreseen that this now could help come to the rescue of American and US Airways as they fight the US Department of Justice’s attempt to block the merger of these two carriers?
DOJ is concerned about market consolidation. Although most of the focus is on obscure, one-stop city pairs, major routes between AA and US hubs were also listed as those threatened by the merger.
Southwest’s forthcoming ability to fly unfettered from Love Field will open new competition to the combined, new American Airlines. We have no inside knowledge at Southwest, but we’ve followed the company for more than 30 years and know well the thinking there. Much of its expansion over the decades comes from connecting the dots. So look for Southwest to connect these major-market dots from Dallas Love Field, all of which will provide new competition for American:
These are just for starters.
This new competition won’t, by itself, rescue American and US Airways from DOJ’s ill-advised lawsuit, but it will help. Southwest Airlines carriers more US domestic passengers than any other airline, and it will continue to do so after the AA-US combination. This is a powerful argument that gets more powerful one year from today.