Tablet Business

Decades later, Wright Amendment lifted at Dallas Love Field

A decade ago, Southwest Airlines declared “Wright was Wrong,” but for Fort Worth leaders, the Wright Amendment was right.

The 1979 amendment, which restricted long-haul flights out of Dallas Love Field, was enacted to protect the new Dallas/Fort Worth Airport, built jointly by Fort Worth and Dallas. With Delta Air Lines announcing in 2004 that it was dropping from 200 flights a day to 20, DFW Airport still needed that protection, they argued.

But when members of Congress began to file bills that would add their states to the list of approved destinations out of Love Field, local leaders realized that the time had come to figure out a solution for the future of the Dallas airport and, ultimately, the Wright Amendment.

“When they started understanding that other states were starting to repeal the Wright Amendment and that was going to set a precedent for other congressional leaders to start doing the same thing, it was abundantly clear that it wasn’t going to be long before everybody started jumping ship and the Wright Amendment was going to collapse,” former Fort Worth Mayor Mike Moncrief said in a recent interview.

With pressure from Congress, local leaders’ attitudes toward the Wright Amendment began to change. A compromise was reached in 2006, limiting Love Field to 20 gates and no international service while allowing for unrestricted domestic flights starting eight years later.

Now, on Monday, passengers will be able to fly nonstop to cities on the East and West coasts out of Love Field, as the restrictions put in place 34 years ago are finally lifted.

“We’ve been working to prepare for this for eight years,” Southwest CEO Gary Kelly said. “We’re ready. Our people are very excited and there is a lot of excitement with our customers.”

The Wright way

When former House Speaker Jim Wright is asked about the amendment that bears his name, he chuckles and reminds people that all of Congress voted on it, not just him. The amendment outlining the infamous flight restrictions was attached to the Aviation Safety and Noise Abatement Act of 1979.

“The members of Congress knew what was necessary to protect the safety and well-being in this part of Texas, and to save the investment. It was a somewhat appreciable investment and money and time by the FAA for the development of DFW Airport,” Wright said.

Leaders of Dallas and Fort Worth agreed in the 1960s to close their municipal airports to commercial passenger service in order to receive federal funding for a regional airport that would be built halfway between the two cities. But Southwest Airlines, a small startup airline serving only cities within Texas, won several legal battles that ordered Dallas to keep Love Field open.

As the federal government moved to deregulate the airline industry in 1978, Wright said, it was necessary to limit Love Field to protect DFW, the fledgling regional airport. His original amendment prohibited all interstate flying out of Love Field, but the amendment was modified by the Senate to allow flights using aircraft with fewer than 56 passengers and for flights to neighboring states: Louisiana, Arkansas, Oklahoma and New Mexico.

It was passed by Congress and took Feb. 18, 1980.

“They could have flown out of DFW anytime they wanted to,” Wright said about Southwest Airlines. “They were never prohibited from flying to other places so long as they flew out of the regional airport that was being built for that purpose.”

Interactive: Wright Amendment, through the years

Over the next 25 years, several attempts were made to repeal the Wright Amendment completely or to modify it. In 1997, the Shelby Amendment added Kansas, Mississippi and Alabama to the list of permitted destinations out of Love Field.

And each time a campaign was started by an airline or leaders in Dallas to get rid of the restrictions, Fort Worth community leaders fought hard to keep them in place.

“Fort Worth’s attitude was a deal was a deal,” Moncrief said. “The Tarrant County delegation was vehemently opposed to taking it any further. They felt like this amendment was put in place to protect our largest employer, American Airlines, and to ensure that DFW Airport, our largest fiscal engine in the entire region, was protected.”

What changed

In 2004, Delta Air Lines said it would dismantle its hub at DFW Airport, dropping from more than 200 flights a day to 20.

For Southwest, that meant there was room at DFW for another low-cost airline to enter the local market. The Dallas-based carrier was already faced with falling passenger traffic at Love Field, as more consumers were driving instead of flying on short-haul routes after the terrorist attacks of 9-11. Another entrant could make it even more difficult to operate profitable short flights out of Love Field.

The airline believed that it had three options: stop serving Dallas and move its headquarters elsewhere, move operations to DFW Airport, or try to repeal the Wright Amendment.

“The preferred option was to repeal the Wright Amendment, knowing how difficult it would be,” said Ron Ricks, executive vice president at Southwest. “We would either succeed in repealing the Wright Amendment in some form or fashion or after a reasonable period of time of trying, if unsuccessful, we could still resort to options 1 or 2.”

At a North Dallas Chamber of Commerce breakfast that November, Kelly announced that Southwest wanted to change or repeal the Wright Amendment, and the carrier began a coordinated campaign to “Set LUV Free.”

DFW Airport countered with a public ad campaign of its own, urging Southwest to move its operations to the larger international airport.

“The airport, as well as American Airlines, felt that there was a deal in place and it was unmistakable what the intent was,” said Jeff Fegan, the longtime chief executive at DFW Airport, who retired last year. “But we also kind of recognized that times changed.”

And then, Sen. Kit Bond pushed an amendment through Congress that added Missouri to the destinations out of Love Field. Local leaders were worried that Wright Amendment restrictions might eventually be chipped away, state by state, if they did nothing, Moncrief said.

Making compromises

So in early 2006, private meetings and visits between executives and local politicians began in earnest, including Moncrief and then-Dallas Mayor Laura Miller. Both city councils set deadlines for the parties to hammer out a possible agreement. The meetings sometimes included shouting matches or people hanging up the phone on each other.

“[Former American CEO] Gerard Arpey and [Southwest founder] Herb Kelleher, they might be fine standing around at a function, making jokes together, but when it came to business and their companies and their stockholders, there wasn’t any give,” Moncrief said. “And many times during these negotiations, it took Laura and myself making calls asking them to get back together.”

Disagreements on when the restrictions should be lifted or how large Love Field could grow dominated the discussions.

Before DFW Airport opened, Love Field had 55 working gates at its terminal. If Love Field were allowed to reach that number again, Fegan said, it would have been detrimental to DFW.

“That would have been a fairly significant impact to see 55 gates rebuilt and be operated by Southwest and other carriers,” Fegan said. “But the 20-gate scenario was something that was measurable and that we could calculate.”

Members of the Tarrant County delegation weren’t the only ones worried about a larger Love Field. The residents who lived in the neighborhoods that surround Love Field didn’t want to see a change either.

“They didn’t want to resolve the Wright Amendment problem,” Miller said, noting that Dallas spent money on a new noise study then. “They didn’t want more traffic around the airport and they didn’t want the extra noise.”

Restrictions were negotiated to prohibit takeoffs and landings between 11 p.m and 6 a.m. to allay the residents’ worries.

An agreement reached

Another concern of American Airlines executives was the unchecked growth of Southwest.

“I remember asking Arpey, ‘What is it that you fear the most from this whole negotiation?’ ” Miller recalls. “He said: ‘What I fear the most is we will relent at Love Field and Southwest will want to start air service out of Alliance [Airport] for passengers. Then we will be in a vise. We’ll be in the center and we will suffer from that.’ ”

Miller said that concern prompted her and Moncrief to come up with a penalty for Southwest. For every gate Southwest opened up at another airport within 80 miles of Love Field, it would have to give up a gate at Love Field.

And then, on June 15, 2006, all the parties announced they had a reached a delicate agreement. Carriers could fly anywhere in the U.S. out of Love Field starting in 2014, but the airport would be restricted to 20 gates and international flights would not be allowed.

Southwest was allowed to immediately start marketing through-ticketing, where customers could buy a ticket to a faraway destination like Los Angeles from Love Field as long as the flight stopped in a Wright Amendment-approved state along the way.

The race to get the five-party Wright Amendment Compromise Agreement passed through Congress took up the remainder of 2006, with Sen. Kay Bailey Hutchison, R-Texas, fending off attempts from other members of Congress and the Justice Department to alter the compromise.

“I didn’t want to lose the opportunity to pass the bill, because then I would have had to start all over,” Hutchison said. “I was fighting for the local agreement to be put forward without any changes that would cause any of the people who had made this grand bargain to fall out over something that was done by a member of the delegation in the House.”

It was the last bill that passed the Senate that year, Hutchison said.

And then North Texans had to wait eight years.

Not a game-changer

The airline industry has changed significantly since the Wright Amendment Compromise Agreement was reached. Several airlines have merged, including American Airlines with US Airways and Southwest Airlines with AirTran Airways. Fuel prices spiked in 2008, causing airlines to cut capacity in their networks as well.

As a result, the lifting of the Wright Amendment restrictions may not be as a momentous as once was thought.

“There will be some impact, no doubt about it, but I think it will be insignificant,” DFW Airport chief executive Sean Donohue said. “The reason I say that is all the markets that are going to be flown out of Love Field, if you look at the capacity, the capacity at DFW out of those markets will still be 70 to 75 percent of the whole region.”

American has not made any changes to its fall schedule in response to the Wright Amendment going away, Chief Marketing Officer Andrew Nocella said.

DFW Airport has also expanded its international traffic tremendously, with new service to cities like Hong Kong, Sydney and Dubai, United Arab Emirates. International passenger traffic is up 39 percent in the past four years and American plans to launch service to Beijing in May.

“The amendment has served its purpose, which was to allow the airport and time and energy we had put into the development of a major international prominent airport such as DFW to develop,” Wright said. “The airport has developed to a state that it enjoys today with different planes and different airlines serving the public out of there.”

But some of Fort Worth’s older community leaders remain concerned about growing flights at Love Field.

“In my judgment, Love Field should have been closed from the beginning,” said Fort Worth attorney Dee Kelly, who was involved in the litigation surrounding Love Field. “There is no question in my mind that the exponential growth of Southwest at Love Field has harmed and will continue to harm DFW’s domestic growth and revenue.”

The future is now

On Monday, Southwest will begin boosting its flight schedule, eventually having 153 daily flights with 15 new destinations by November, up from its current schedule of 115 daily. To make room for the new flights, it has fewer daily departures to Austin, Houston, El Paso, San Antonio and other former Wright-approved destinations.

“The short-haul markets have really suffered over the last 10 to 15 years with higher fuel prices and higher fares. So the change in through-ticketing in 2006 with the Wright Amendment Compromise came just at the right time,” Southwest’s Kelly said. The through-ticketing allowed by the 2006 agreement already adds $250 million to $300 million in revenue to Southwest each year, he said.

Virgin America, which flies six daily flights to Los Angeles and San Francisco out of DFW, will move its operations to Love Field on Monday and expand to 18 daily flights to five destinations. United Airlines will continue flights out of Love Field to its hub in Houston.

Delta Air Lines had been leasing gates at Love Field from American to operate flights to Atlanta on small regional jets. However, American was required by the federal government to give up its gates to Virgin America to win government approval to merge with US Airways, and now Delta is trying to negotiate gate space from Southwest to continue flights through January.

With Southwest controlling the majority of the gates at Love Field, Southern Methodist University economist Bud Weinstein said, the lifting of the Wright Amendment will have a minimal impact on lowering fares for North Texas travelers. Ten years ago, Weinstein advocated shutting Love Field to force Southwest to fly out of DFW because he believed it would bring new airlines into the market to compete against American and Southwest.

“I just don’t see any additional competition in the regional air market as a result of Wright going away,” Weinstein said, adding that American and Southwest will now have monopolies at their respective airports.

Southwest is ready to celebrate the end of Wright, and Kelly said the airline can live with the remaining international restrictions and 20-gate limit and has no plans to fight them.

“There are airports that don’t have international service for other reasons, but limiting us to Texas and the surrounding states, that was outrageous,” Kelly said. “It’s gone now, so that’s history.”