May 12, 2014

Virgin America gets two gates at Dallas Love Field

Dallas City Manager A.C. Gonzalez has approved an agreement to transfer the lease on the gates from American Airlines to Virgin America.

Virgin America is free to fly at Love Field.

Dallas City Manager A.C. Gonzalez said Monday that he would approve an agreement with American Airlines to transfer its lease on two gates at the city-owned airport to the San Francisco-based carrier rather than Dallas-based Southwest Airlines.

American was forced to divest the gates as part of its antitrust settlement agreement with the U.S. Department of Justice related to its merger with US Airways. While both Southwest and Delta Air Lines also wanted the gates, the Justice Department concluded that giving the gates to Virgin America would increase competition at Love Field, and that only Virgin would fulfill the terms of American’s settlement with the government.

Gonzalez initially expected to make his decision last week after discussing the gate situation with the Dallas City Council on Wednesday, but needed more time to work out the details.

“Rather than simply signing the sub-lease presented to us, we took some additional time to make sure our actions would be responsible and capture the vision of the Justice Department’s selected carrier,” Gonzalez said in a statement. “This was accomplished by incorporating Virgin’s publicly-stated intentions into a compliance agreement.”

The agreement calls for Virgin to commit to the city’s noise abatement program and clarifies how any unused gate space may be made accessible to other airlines.

Virgin America, which has started selling tickets on flights out of Dallas, plans to launch service at Love Field on Oct. 13, when the Wright Amendment restrictions on long-haul flights from the airport expire.

Initially, Virgin will fly 14 daily flights to San Francisco, Los Angeles, Washington, D.C.’s Reagan National and New York’s LaGuardia airports. It plans to add flights to Chicago O’Hare in 2015, operating a total of 18 daily flights next year.

“We are very pleased to have the opportunity to bring new competition to Love Field, an important airport for travelers because of its proximity to the city’s central business district,” said David Cush, Virgin America’s chief executive. “We appreciate the support of Dallas travelers and all of the Virgin America flyers and look forward to bringing a new choice to the patrons of Love Field.”

Southwest’s chief executive Gary Kelly said he was disappointed with the city’s decision and proud of the offer his carrier made for the gates.

“Regardless of the decision, we are excited to share more details later this month about the new service and low fares we will offer our customers as Wright Amendment restrictions expire this October,” Kelly said in a statement.

American does not currently use the gates at Love Field, but subleases them to Delta and Seaport Airlines. It was also required by the Justice Department to divest takeoff and landing slots at New York’s LaGuardia and Washington’s Reagan National airports along with gates at several other airports including Love Field.

In a letter sent to the city last week, the Justice Department said it would reject any proposals from the city that would give the gates to Southwest or Delta. With the Wright Amendment flight restrictions on long-haul service at Love scheduled to go away, airlines have clamored for access to Love Field, hoping to attract Dallas business travelers with convenient flights.

“I appreciate the airline carriers who showed interest in the two gates,” Gonzalez said. “We are excited about how the lifting of some Wright Amendment restrictions will expand opportunities and choices for Dallas residents and the traveling public.”

With the gates going to Virgin America, Southwest will retain control of 16 of the 20 gates at Love Field and still plans to significantly expand its destinations once the restrictions are lifted. United Airlines currently leases the remaining two gates at Love Field, flying regional jets to its hub airport in Houston.

Virgin America conducted a very public campaign to “free Love Field,” bringing in its British founder Richard Branson to attend a rally in Dallas and record a video “love letter” to the city that was posted online.

Virgin America operates six daily flights at Dallas/Fort Worth Airport to San Francisco and Los Angeles and plans to move its operations to Love Field in October.

Delta, which currently operates flights to Atlanta from Love Field using small regional jets, said it will continue to serve North Texas customers with its 40-plus daily flights out of DFW Airport.

“We look forward to exploring future opportunities to expand service at Dallas Love Field,” the Atlanta-based carrier said.

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