As we go to press, the world’s largest airline and the world’s most successful discount carrier are waging a nasty battle. American and Southwest, two of the industry’s truly iconic carriers, are fighting tooth and nail for the business of Dallas travelers, launching new flights, discounting tickets, and pumping up frequent flyer awards.
This promotional skirmish is atypical not only in its scope and intensity but in its origins as well. It boasts a long, complicated backstory replete with convoluted local politics and outsized Texas characters. Following is the short version of the story together with a summary of its repercussions for travelers.
The North Texas airport shuffle
Before gargantuan Dallas-Ft. Worth International Airport (DFW for short) was a gleam in a Texan’s eye, the cities of Dallas and Ft. Worth both had their own modest airports. In Dallas, there was Love Field; Ft. Worth had Meacham Airport.
Meacham was the lesser of the two airports, and that inferiority rankled one of Ft. Worth’s principal promoters and power brokers, Amon Carter. Carter, a media mogul and major American Airlines shareholder, hatched a plan to address the imbalance by creating an altogether new airport to serve both Dallas and Ft. Worth—the Greater Southwest International Airport.
But Carter sabotaged his grand plan by skewing its benefits toward his fellow Fort Worthians, thereby forfeiting the buy-in of Dallas residents and politicians. In particular, the passenger terminal was located on the far west side of the airport—convenient to Fort Worth, but forcing Dallas residents to drive completely around the airport’s perimeter to gain entry. In short, the new facility offered Dallas travelers no reason to abandon the more convenient Love Field, and they didn’t. As a result, usage of the new airport never reached hoped-for levels and soon seemed headed for financial collapse.
At this point, the Federal Aviation Administration (FAA) intervened to head off the impending meltdown, withholding airport funding until the situation could be resolved. The Civil Aeronautics Board (CAB) then mandated that Dallas and Ft. Worth work together to find a mutually acceptable solution. The new airport, officially dubbed Dallas-Ft. Worth International Airport (DFW) to reflect its two-city affiliation, opened to commercial air traffic in 1974.
A key element of the plan to insure the success of the new airport was to shut down commercial service at Love and Greater Southwest. To that end, all airlines flying to Love agreed to relocate to DFW, and Greater Southwest was shut down when the new airport opened, thereby guaranteeing that DFW could dominate the region with no competition from other airports.
But there was one airline that never agreed to move its operations to DFW, and whose failure to do so would have enormous repercussions for the history of U.S. commercial aviation.
The “Southwest effect”, delayed
Southwest began flying in 1971, selling low-priced tickets between Dallas Love Field and Houston and San Antonio. As it happened, the discounter hadn’t started service when other airlines were agreeing to relocate to DFW, so Southwest never committed to abandoning Love Field and saw no reason, practically or legally, to join other carriers in shifting operations to the less convenient DFW. The Supreme Court agreed, ruling in 1973 that Dallas had no legal right to forcibly displace Southwest.
When the new airport opened for business in 1974, Southwest was the only airline remaining at Love Field. And so things remained until 1978, when the airline industry was shaken to its foundations by the passage of the Airline Deregulation Act. Suddenly, what had been a closely controlled business became a free-for-all, with airlines allowed to fly wherever they chose and charge whatever prices they thought the market would bear.
Southwest saw its chance to expand beyond the Texas market and signaled its intention to start flying between Dallas and New Orleans. That put Southwest and Love Field squarely in competition with other airlines and DFW, and incurred the wrath of some of the region’s most powerful forces.
Those anti-Southwest forces came together in the form of a Texas congressman, Jim Wright. In what has come to be known as the Wright Amendment, he managed to add language to the 1979 International Air Transportation Act that prohibited airlines operating from Love Field from flying from Love to destinations beyond those states that shared a border with Texas (i.e. New Mexico, Oklahoma, Arkansas, and Louisiana). Southwest could fly between Love and New Orleans, for example, and between New Orleans and San Diego, but it couldn’t fly from Love to San Diego nonstop. And passengers would have to buy multiple tickets on the airline to travel on such an itinerary.
Then-President Jimmy Carter signed the bill into law in 1980, severely restricting Southwest’s ability to realize its full potential for decades to come.
Over the years, the merits of the Wright Amendment have been debated fiercely by both sides’ advocates. Recently it has been one of the principal preoccupations of Southwest’s flamboyant co-founder, Herb Kelleher. Against him—and in favor of maintaining the Amendment’s restrictions—have been the combined forces of giant DFW Airport as well as its largest tenant, American Airlines.
Southwest has prevailed in a couple of battles along the way, resulting in the relaxation of Wright Amendment restrictions to permit Southwest to fly from Love Field to Alabama, Kansas, Mississippi, and Missouri.
The war wasn’t won definitively until October 13, when the Wright Amendment Reform Act was signed into law by President Bush. The Act permits immediate through-ticketing on flights between Love and other cities via airports in unrestricted states (Dallas-Kansas City-Chicago, for example), and in eight years completely lifts Wright restrictions on nonstop flights from Love Field.
Goodbye Wright, hello miles
Whatever the long-term effects on the various parties, the immediate effect of the bill’s passage has been a spike in competition, with all that implies for consumers.
Within a week of the Reform Act’s passage, Southwest had added 25 new destinations to its Dallas schedule, bringing to 43 the number of cities served from Love Field. Tickets on many of the new routes are priced at $99 each way for travel through March 9, 2007. Through December 31, 2006, Southwest is offering members of its Rapid Rewards program double credits for all flights to/from Dallas Love Field. (To qualify for the bonus, flights must be booked on southwest.com or swabiz.com.)
In classic open-market fashion, American revised its pricing to remain competitive with Southwest and promoted its Dallas flights with double AAdvantage miles. Other airlines were forced to do the same.
As observed by the FightWright.org website (no longer available online), one of a number of anti-Wright publications: “For the first time in history, North Texans are experiencing airline deregulation, albeit a quarter century after the rest of America.”
Author’s note: For more on the history of the Wright Amendment, the Wikipedia entry provides a good overview, including the full text of the Amendment itself and links to related sources.