Airline CEOs Square Off On Wright Amendment At Senate Hearing - Business Travel News

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Airline CEOs Square Off On Wright Amendment At Senate Hearing

November 10, 2005 - 12:00 AM ET

American Airlines chairman and CEO Gerard Arpey and Southwest Airlines chairman Herb Kelleher were among those speaking to a Senate committee today regarding the Wright Amendment, a controversial piece of legislation from the late 1970s that promoted a then-fledgling Dallas/Fort Worth International Airport and still restricts air service at crosstown Dallas Love Field.

In simplistic terms, Kelleher and Southwest seek to overturn the Wright Amendment (BTN, June 6), which would allow Southwest and any other airline to fly from Love Field to any U.S. city, beyond the current perimeter, which encircles Alabama, Kansas, Mississippi and states that border Texas. Arpey and American insist the Wright Amendment should not be changed, and if Southwest wants to fly from Dallas to cities not permissible under current regulations, it should do so from DFW.

Arpey today described the Wright Amendment debate as a "manufactured controversy," saying Southwest is seeking a "downtown monopoly" on air service. "Southwest knows that 60 percent of American's DFW passengers live closer to Love Field than to DFW," he explained. "Second, it has a virtual lock on the lion's share of Love Field's active gates."

If for competitive reasons American is compelled to move some flights to Love Field, Arpey said, it would hinder hub operations at DFW, including a reduction in connecting flights.

"Unlike Southwest, American Airlines played no part in creating the Wright Amendment," Arpey said. "We have based billions of dollars of investment decisions on the presumption that a deal is a deal, and that the compromise reached in 1979 would be honored by everyone."

That compromise, according to Kelleher, meant that "Love Field became, and remains, the only airport in America route-restricted by an act of Congress for the sole purpose of protecting competitors—one airport and several airlines—from the rigors of the marketplace."

Kelleher voiced objection not only the geographic restrictions stipulated by the Wright Amendment, but also "the more obscure 'marketing and through ticketing' restrictions" created by the legislation.

"These restrictions are a blatant restraint on commercial free speech and force Southwest, unintentionally, to deceive and confuse passengers. They are without precedent in commercial aviation, including during the regulated era," Kelleher said. "This means that even if a customer is willing to make a stop within the permitted states and continue his or her journey on the same plane, or even a different plane, Southwest may not offer or market such service."

Kelleher also listed several circumstances that have changed since 1979, including DFW's growth from a new facility to one of the world's largest airports. He also explained the financial and operational risks Southwest sees in splitting its service between the two Dallas airports.

"Southwest has avoided forbidding fortress hubs like DFW, preferring smaller, less congested airports when available," he said. "This strategy has helped make Southwest America's only consistently profitable and totally job-secure airline. All we ask now is for the U.S. Congress to restore to Southwest and its customers what it gave the rest of the flying public in 1978—a competitive free airline market—but which it improvidently allowed to be taken away in 1979."

Several other witnesses were scheduled to appear, including Congress members from Oklahoma, Missouri and Texas, DFW's COO Kevin Cox, industry analysts and other industry representatives.

Both American and Southwest have said they expect movement on the issue, but neither expects Congress to fully resolve the controversy in the short term.
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