After a long period of silence in the Dallas Love Field gate dispute, a morsel of news finally trickled out of the courtroom late Friday. US District Judge Ed Kinkaide granted Delta’s request for injunctive relief, permitting the airline to continue flying out of Love Field for now. “For now” being the operative term here, as the injuction merely allows Delta to continue flying its current schedule until trial, or when the matter is otherwise settled. That being said, there were several nuggets in the court filing that seem to spell trouble for Southwest and the city of Dallas.
I won’t rehash all the details again, but as a quick recap, Dallas, Delta, and Southwest hauled each other to court in 2015, with Delta demanding continuing use of two gates at DAL, Southwest demanding that Delta be kicked out of the airport entirely, and the city basically demanding that the court tell it what to do. When the fight first started, I figured Southwest was ultimately hosed. My (non-lawyer) reading of the Five Party Agreement suggested that since Delta had made a proper accommodation request at a time (June 13, 2014) when there was plenty of space at Love Field to honor the request, Southwest had an obligation to grant the accommodation, and couldn’t just increase its schedule after the fact to freee out new entrants. And indeed, Judge Kinkaide’s reasoning suggests that this is indeed the proper interpretation of the agreement:
Southwest’s position is that accommodation is not required as long as they are using the gates at full utilization of 10 flights daily out of each gate. Southwest did not “fully utilize” its gate space until, at the earliest, its announcement on February 26, 2015 of increased flight operations, or, at the latest, until August 2015 when the actual increase was fully realized. Southwest cannot “ramp up” its flight schedule to thwart the pending accommodation request by Delta.
That’s bad enough, but Judge Kinkaide further uses Southwest’s own words in the original Congressional hearings concerning the Five Party Agreement to suggest that the airline knew exactly what their responsibilities were in the event of an accommodation request. And those responsibilities did not include gate squatting.
In response to a question involving a very similar scenario as to what which the Court has before it today, Mr. Kelleher testified, ‘And it is very simple. There is no mystery to the way it operates, and that is, I can show you Southwest Airlines schedule, gate schedules, we have got hours on our gates where another carrier could operate there…And we would simply be told by the City of Dallas, you have got these vacant spaces in your gate utilization and by golly you are going to put another carrier in there.’ Subcommittee member responded, ‘They would be able to tell you that?’ Mr. Kelleher answered, ‘That is the way it works, oh yes, absolutely’…Apparently at that time, Mr. Kelleher understood Southwest’s obligations, as well as the City’s. In spite of that understanding, no accommodation every happened.
Based on all of that, the court found that Delta has established that Southwest did not comply with its contractual obligations, and therefore breached the accommodation provision (Section 4.06F) of its lease agreement. Needless to say, it sure appears that Southwest’s goose is cooked.
But wait, there’s more! Judge Kinkaide doesn’t appear particularly impressed with how the city of Dallas has handled this issue, either. On page 25 of the opinion is an interesting missive between then-Dallas mayor Laura Miller and the Congressional subcommittee, where Mayor Miller, responding to a question about the vagueness of the term “unduly interfere with” with respect to whether an accommodation request “unduly interferes” with an existing carrier’s operations, acknowledges that the city has a duty to come up with a clear policy governing how accommodation requests would be handled. The judge clearly wasn’t amused that this point was never followed up on by the city:
As we now know, the City wholly failed to craft any policy, let alone a clear one, setting forth how the accommodation procedure and process would work in reality. This “vague language about ‘unduly interfere with'” was drafted by the City itself and was noted by at least one concerned subcommittee member of contributing to “Southwest [being] in the catbird seat”. And worse, then Mayor Laura Miller acknowledged the need for the City, “if we are responsible, [to] create a very clear policy…for how we are in real terms going to be executing this.” Now in this case, the Court is asked to follow through with what the City should have done years ago.
In my earlier post linked to above, I faulted the city, first for agreeing to the arbitrary 20-gate cap in the first place, but also for failing to recognize trouble by signing off on the sublease agreement between United and Southwest, by which Southwest acquired its 17th and 18th gates at the airport, without requiring Southwest and Delta to first work out an agreement about sharing gates. While not directly addressing that issue, the court does appear to have serious concerns about the wholly hands-off approach that the city has taken so far regarding gate use at Love Field, and isn’t particularly thrilled about having to step in as referee. Not good for the city, either.
Bottom line, Delta isn’t going anywhere anytime soon. And if I were the City of Dallas and Southwest Airlines, I’d be working overtime to hammer out a settlement with Delta, because if the court’s reasoning here is any indication, this is unlikely to end well for either party if this goes all the way to trial.