Not to overshadow Rohan’s post yesterday about the major changes coming to the North Texas aviation scene over the coming month, including the arrival of the first Airbus A380 to DFW Airport yesterday, but another piece of news hit the local newswire yesterday. Per the Dallas Morning News, the city of Dallas has informed Delta that it will be unable to provide gates for the airline at Love Field after the expiration of the Wright Amendment on October 13th (two weeks from today for those of you keeping score at home). The entire letter from the city is reproduced in the DMN link above, but I’ve highlighted the pertinent section here:
“Based on the schedules recently provided, and the Gate Use License Agreement between Southwest Airlines and United Airlines, the City has acknowledged that Delta cannot be accommodated at Dallas Love Field after the expiration of the current sublease with American Airlines. Delta may continue operations at its current location in Terminal 1 until that time.”
Delta, naturally, is not amused by the turn of events.
“Delta is disappointed that the City of Dallas has made the decision to reduce competition and travel options at Dallas Love Field by failing to accommodate our service,” says Delta spokesman Trebor Banstetter. “Delta remains committed to serving North Texas travelers from D/FW and Love Field airports, and will continue to work with all parties to find a solution.”
I find Delta’s sudden commitment to North Texas somewhat ironic, considering that DL dismantled their DFW mini-hub in 2005, but I digress…
A quick recap of what brought us to this point: as part of the deal whereby the DOJ dropped its antitrust suit to block the AA/US merger, AA was required to relinquish control of its two gates at DAL. Delta, Southwest, and Virgin America asked for them, with Delta promising a starter set of 18 flights a day to five destinations (Atlanta, Detroit, Los Angeles, Minneapolis, and New York-Laguardia). In March, the DOJ announced that Delta couldn’t have the gates, and later stated that the gates needed to be given to VX, but the city council dilly-dallied for a couple of months, finally agreeing to the swap in May. Why it took two months for the city to hammer out a lease agreement that the feds told them they had to accept is beyond me, but that’s Dallas City Hall for you. Anyway, I was always skeptical of Delta’s proposal, though I had to applaud their chutzpah in selling tickets for the proposed flights from DAL long before the DOJ handed down their decision. The main reason for my skepticism – with the exception of the new Atlanta flights, all of the proposed service utilized regional jets. I just didn’t see a whole lot of folks around here that were so enamored with Delta that they would forego mainline service on AA (and soon to be on Southwest) and voluntarily fly RJs.
So what happens now? I do find this whole episode rather strange, but I suspect we haven’t heard the last of this story. The lynchpin in this whole deal is DL’s arch-nemesis, United Airlines, which controls the two remaining gates at the 20-gate airport. UA has for years essentially squatted on the gates, operating only a handful of flights to Houston’s Bush Intercontinental Airport. Currently, UA operates 7 daily flights out of its two gates, with a few more operated by small carrier Seaport Airlines. Looking at a random week next February, it appears that UA plans to increase service to 10 flights daily. However, this still seems to be a significant underutilization of the gates. Southwest plans to gradually ramp up to 153 flights per day out of its 16 gates, or an average of approximately 9.5 flights per gate. That would suggest a theoretical maximum of 18-20 flights per day from UA’s two gates. My suspicion is that UA is playing hardball with DL in the hopes of extracting more money. Or perhaps they plan to surprise us all by announcing their own ramp-up out of DAL with new destinations (frankly, that would be the smarter thing to do, as trying to go up against Southwest’s hourly-plus Houston Shuttle is a suicide mission, if you ask me). We shall see.
UPDATE (9/30 6:22p): More this afternoon from the Dallas Morning News:
Delta Air Lines is being forced out of Dallas Love Field because Southwest Airlines is going to use one of United Airlines’ two gates at the airport, and because United has told the city it will increase its service in January. That’s according to a memo Ryan Evans, the city’s first assistant city manager, sent to Mayor Mike Rawlings and the Dallas City Council Tuesday morning — one day after the city’s aviation director gave Delta two weeks’ notice at the city-owned airport.
Well…this adds even more weirdness to the story. United has told the city that it intends to operate 12 flights per day to Houston starting January 7, 2015, though UA’s schedule currently only shows 10. Meanwhile, Southwest will have 17 gates at its disposal…but apparently only through January 6, 2015, which is when the UA-WN gate use agreement ends. Meanwhile, Southwest’s full slate of 153 daily departures doesn’t fully kick in until January 6, when nonstop service is launched to San Francisco and Oakland – which also just happens to be the date on which the number of gates at their disposal drops from 17 back to 16. And apparently United is content to lose tons of cash flying 50-seat RJs to IAH against Southwest’s hourly shuttle to Hobby, just so they can give Delta the finger it seems. Interesting, to say the least.
UPDATE 2 (10/3 8:00p): Delta is now threatening legal action against the city unless they find room at DAL. In a letter to city aviation director Mark Duebner from Delta attorney Kenneth Quinn:
“It is simply not true, as the City would have it, that there is no room at the inn for Delta,” says Quinn’s letter. “The truth is, the City decided the available gate space should go to hometown favorite Southwest — which already controls 80% of the gates at Love Field — instead of to Delta, which would have used the gate space to compete with Southwest.”
Quinn’s letter goes on to say that Delta was under the impression, as recently as last week, that the city had notified United that it must accommodate Delta’s request to share its gates. City and airport officials deny that such a letter was ever forthcoming.
Delta’s ire seems to be based on two issues: a) the city allowed UA to sublease its gate to a competitor (Southwest) and b) it is allowing UA to “squat” on its remaining gate by increasing turn times on its IAH-bound flights from 30 to 90 minutes. From what I’ve seen, Delta might have a point. Southwest’s announced schedule plans for a maximum of 153 flights per day; this seems like a total that could easily be flown with their existing 16 gates, especially since that schedule was announced long before they picked up the extra gate (and notably, the sublease agreement only runs through January, as noted in my first update). Second, a 90-minute turnaround for an ERJ is pretty long. The question remains, though: what, if anything, can city officials do about any of this? I haven’t seen the lease agreement with United, so I don’t know what control, if any, the city has over how an airline uses its gates (maybe a reader with more knowledge of the lease language can chime in here). The long turnarounds in particular seem like a deliberate attempt by United to prevent Delta from using the gates – which might be a dirty trick on their part, but whether the city can compel them to use them differently, I don’t know. We shall see where this ends up going.
In any event, if you’re flying to Dallas the next few months, enjoy the low fares thanks to all the new service out of Love Field…