Maybe they should rename the airport “LUV Field”…
It’s been a busy past few weeks at Dallas Love Field, first with the announcement that United was ceding its two Love Field gates and handing them over to Southwest, with Southwest then launching 13 new flights to 9 new cities, follwed by Virgin America’s announcement of new nonstop service to Austin. I found Southwest’s initial announcement a little odd in terms of the new cities announced. Six of the cities made sense, but I found the inclusion of Charleston SC, Columbus, and Indianapolis rather strange. Not to mention, WN seemed to be being way too nice to American and, especially, Delta, by not going into any of their hub markets despite seemingly good business cases. As it turns out, there was another shoe to drop. Southwest announced Thursday that it would be launching nonstop flights to eight more cities from Love Field in August, along with beefed up service on existing routes.
The new cities include Boston; Charlotte and Raleigh-Durham, N.C.; Detroit; Omaha, Neb.; Philadelphia; Pittsburgh; and Salt Lake City. Southwest will offer one flight a day to those cities.
Also on Aug. 9, Southwest will add one more nonstop flight on its routes between Dallas and Atlanta, Austin, Baltimore, Houston, Little Rock, Chicago and Seattle, and upgrade its Charleston, S.C., nonstop flight to daily service. It begins Saturday-only service to Charleston on April 11.
Now THIS makes a lot more sense. Boston, Charlotte, Detroit, Philadelphia, and Salt Lake were on my original prediction list, with Raleigh on my possibilties list. Omaha and Pittsburgh didn’t make my cut, but given that Omaha has been clamoring for nonstop service to Love for awhile, and the increasing energy industry ties between Texas and Pennsylvania thanks to the Marcellus Shale gas boom, neither of these cities are particularly surprising. I’m going to go out on a limb and assume bookings on the new Seattle route, just announced a couple of weeks ago, must be looking very strong indeed. I’m still a little puzzled by CHS, especially since the commencement of daily service will also result in Panama City (ECP) going back to Saturday-only service. Given that tourist season starts on Memorial Day, you’d figure any adjustments would want to be done then, not in the middle of August. Overall, this will bring Southwest’s Love Field operation to 180 flights a day, or exactly 10 per day out if its 18 gates. And yes, there is the obligatory launch fare sale, with introductory fares ranging from $69-99 each way.
The much more interesting nugget in all of this, though, is that…
Southwest Declares All-Out War on Rival Delta As It Gains a Stranglehold on Love Field Traffic
I’ve written extensively on the ongoing soap opera with regards to the gate situation at Love Field, with the city of Dallas initially telling Delta to go fly a kite, with United coming to the rescue by temporarily subleasing them gate space, then followed by the news that United was abandoning Love Field altogether and handing its gates over to Southwest. When the new routes came out, with the quasi-exception of Seattle, WN didn’t target a single DL hub, despite the seemingly strong business cases in some cities. At the same time, Southwest agreed to honor the sublease by United to Delta through the previously agreed-upon July 6th date, but was mum as to its intentions afterwards. I interpreted the non-inflammatory route announcement as Southwest not wanting to “poke the bear” while it worked out an agreement with Delta.
It turns out, I was wrong. About a month before United announced the sublease to Southwest, the Department of Transportation sent a letter to Dallas City Attorney Warren Ernst warning the city that its position is that as a signatory to the Five Party Agreement, aka Wright Amendment repeal, Delta has the right to space at Love Field as long as it operates its flights. Nonetheless, the city agreed to the United-Southwest sublease, but while acknowledging both airlines’ disagreement, cautioned both parties that it believed the DOT’s requirement to accommodate Delta was binding. Southwest, meanwhile, filed an appeal in the DC Circuit Court of Appeals asking it to invalidate the DOT letter, thus allowing them to kick Delta to the curb. You can read the entire sublease agreement and court filing, which includes the DOT letter, by following the link above.
In reading through the DOT’s letter, its position that Delta is entitled to permanent accommodation seems to be based in the Competition Plan statute, combined with the terms of the Five Party Agreement. Only AA, WN, and CO operated at Love at the time; other carriers argued that because of the 20-gate cap, new airlines were effectively locked out of the airport, but a clause was included requiring the city to make an effort to accommodate any new carrier that wished to serve the airport at a later date. I won’t reproduce the entire letter here, but the two most critical components seem to be the DOT’s contention that under its competition policy and the terms of the Wright repeal, the city is obligated to find space for all requesting carriers “to the extent possible given the current gate usage, without impacting current or already-announced, for-sale services by other signatory carriers” (emphasis added). The DOT goes on to say that it believes it is the city’s responsibility to “continue the accommodation and ensure that space is available so that the requesting carrier is able to maintain its pattern of service on an ongoing basis, based on the available space on the snapshot date of the original accommodation request, even after the expiration or termination of any agreement between the accommodated carrier and signatory carriers”. Since Delta did not operate out of Love at the time, it is a “requesting carrier” in this case.
What we have here are two competing issues at work. First, as mentioned earlier, Southwest, following its August ramp-up, will operate 180 flights per day out of its 18 gates. VX, meanwhile, will ramp up to 20 flights a day out of its two gates on September 1 by adding one flight a day to LAX, LGA, and SFO, in addition to the four flights a day to AUS starting in April. In other words, both are setting themselves up to claim “sorry, but we’re fully utilizing our gates, so Delta can’t be accommodated without impacting our already announced services.” But, I don’t think that logic works, because as the DOT went on to say, the determination of whether a requesting carrier (Delta in this case) can be accommodated is the date of the “original accommodation request”. My guess is the DOT will view the “original request” as sometime in September, 2014, after the DOJ rejected Delta’s request for exclusive use of the gates but after DL formally requested space to operate its flights to Atlanta. At that point in time, announced future operations were: 153 flights a day by WN, 13 a day by VX, and 7 a day by UA (Seaport Airlines also operated 2 EAS flights out of one of VX’s gates). One could view this as WN and VX stuffing their flight schedules after-the-fact to shut DL out, and for that matter, with some flights of questionable utility. I really don’t see VX’s DAL-AUS operation as anything other than a money loser, and does WN really need an 11th daily and 23rd (!) daily flight to AUS and HOU, respectively? Seems like there might be just a little bit of gate squatting going on.
Add in to all of this that the Department of Justice originally denied Delta’s request for AA’s two gates when they were awarded to Virgin, and I really have no idea how things will turn out. My understanding of the Wright repeal agreement is that the city really is obligated to find space for Delta, and if the relevant date for determining whether space is available is back in September, I don’t see how Southwest (and Virgin) can now freeze them out by magically announcing new service now. Then again, since the DOJ has been hostile to DL from the beginning, who knows, they might just make a pronouncement that WN and VX can do whatever they want. Personally, I think Southwest should stop acting “too big for its breeches”, as we say here in Texas, and let Delta have its harmless five flights a day to ATL. After all, this situation is likely to resolve itself soon enough after VX is forced to cut back unprofitable flights. But clearly, they’ve made their intentions known – flip Delta the bird, tell them to get lost, and effectively change the name of the airport to “LUV Field”.