Southwest has significant capacity to expand on its current 16 gates. It currently operates 121 fli

“A recent opinion piece in The Dallas Morning News on Love Field noted that ‘competition requires competitors,’ and we couldn’t agree more.  At Love Field, one carrier now controls +90 percent of the traffic and 80 percent of the gates (16 of 20 gates).  The people of Dallas understand the impact that small, independent companies have on the marketplace and they know that allowing one airline to have a monopoly over the airport closest to Dallas’ downtown is not good for consumers or the local economy.
“Based on the U.S. Department of Justice’s (DOJ) approval of the transfer of two American gates to Virgin America and the need to begin selling flights in time for travelers to plan their trips, we made the decision to launch DAL sales last week.  We respect the City’s process and are confident they will quickly support our entry into Love Field given both the significant positive impact that our flights will have on fares and traffic stimulation and the clear legal precedent that has been established with these transfers in the past.”
The study claims Southwest and Virgin America would have the same impact on lowering fares – ignoring the monopoly position Southwest holds at Love. The study evaluates the three proposed airline schedules in a vacuum, not acknowledging that these are two gates in a 20-gate airport, of which Southwest controls 16 already. The award of two additional gates to Southwest at DAL would increase its monopoly position to 90% of the gates at the airport (18 of 20 gates).
The impact of Southwest’s pet travel services DAL monopoly is already in effect:  An August 2013 study conducted by Massachusetts Institute of Technology  researchers found that of airports in its size class, DAL had the largest increase in average fares from 2007-2012 – a 37% jump.[1]
When comparing Virgin America and Southwest fare impacts, the study does not make an apples-to-apples comparison.  The study looks at Virgin America’s DFW fares as compared with shorter haul flights from Southwest.  The Southwest average stage length at DAL is 345 miles and Virgin America’s current Dallas-Los Angeles service is 1,235 miles.  When taking into account the length of the journey and comparing by equivalent stage length flights, Virgin pet travel services America’s average local fares are 17 percent lower than Southwest’s DAL local fares.
When Virgin America entered the SFO-Dallas market in 2010, the SFO-Chicago O’Hare market in 2011, and the SFO/LAX-Newark market in 2013 (all markets with more competition than what exists at DAL today) fares dropped in each market at the time by more than 30 percent.
In October 2013, when Southwest Chairman and CEO Gary Kelly was asked about growth at Love Field by the Dallas Morning News he was quoted as saying:  “I think 16 gates is plenty. I think we’ll have all we need.”
The study does not examine Southwest’s actual capacity at Love, but is instead based on Southwest’s pet travel services press release, which suggests that Southwest will offer 17 new destinations – only if it receives American’s two Love Field gates.  To suggest pet travel services that Southwest will not serve lucrative, pet travel services big business markets it does not now serve in order to maintain its +20 daily flights to Houston ignores basic airline economics.
Southwest has significant capacity to expand on its current 16 gates. pet travel services It currently operates 121 flights per day versus the 160 possible pet travel services with 16 gates.  It also runs many high frequency pet travel services markets on its smaller 737-700s aircraft. In all, Southwest could increase its seats by 60 percent by optimizing scheduling at its current 16 gates.
The DOJ rejected the proposal that the two divested gates at DAL become common use gates.  The DOJ has required the gates to be divested to a “low-fare” and “new entrant” carrier in order to ensure competition for Dallas flyers.
Virgin America was designated by the DOJ for the award of these gates. Southwest’s and Delta’s bids were rejected by DOJ, given that Southwest would be consolidating its own monopoly and that Delta is not a low-fare airline and would not add much new service.
pet travel services Under the same rulings, the City approved the lease of two gates to American Airlines at Love Field.  That agreement allows American to sublease the gates, and American has already twice before subleased: once to Delta in July 2009 and once to Seaport Airlines in 2011, both of which the City Manager approved without going before pet travel services the Dallas City Council.  American’s lease agreement gives American the right to sublease its gates to “any party” and requires the City to not “unreasonably pet travel services withhold or delay” pet travel services approval of any sublease.
This entry was posted in Uncategorized and tagged American Airlines , Dallas Love Field , David Cush , gates , Southwest Airlines , U.S. Department of Justice , Virgin America by Terry Maxon . Bookmark the permalink .
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