With fewer limits, Love Field is soaring: Opening the skies for Southwest has lowered fares for D-FW travelers, benefited both airports

Oct. 1, 2007

Sep. 29--Both the supporters and opponents of proposals to open up Dallas Love Field said traffic would soar there if Congress were to loosen the restrictions on flights out of the airport.

They were right. In the year since Congress allowed Love Field flights to go anywhere in the United States, the number of flights has risen 9 percent, while the number of passengers has gone up about 20 percent.

Meanwhile, as proponents had predicted, average airfares to many cities are down at both of Dallas-Fort Worth's major airports, in some cases by more than 20 percent.

Perhaps even more importantly, the expensive, contentious debate over what should be allowed at Love Field has lapsed into deafening silence. The compromise, reached after hard negotiations among airlines, cities, airports and lawmakers, ended more than a quarter-century of controversy.

"I think all of the sudden, that's an issue we're successfully putting behind us," said Dallas Mayor Tom Leppert, who entered office this year without the issue hanging over his head.

"Some people may be a little bit more happy and some a little bit less happy," he said. "But the reality of it is that everybody has moved on."

"I still marvel that the stars lined up the way they did," said Fort Worth Mayor Mike Moncrief, who was deeply involved in creating the 2006 compromise. "Divine intervention."

The neighborhood groups that feared a wide-open Love Field say that hasn't happened, that a limit on gates and a phase-in of long-distance flights have kept the number of jets flying over their homes to the dull roar they're used to.

A year ago, the neighborhood groups lauded the Wright compromise reached by local officials. Today, they say they're happy enough with the results.

"I think people have just made their peace with it," said Pat White, who lives in the Bluffview area north of Love Field and is a leader of the Love Field Citizens Action Committee.

Ms. White said the agreement to limit the city airport to 20 gates, instead of a planned peak of 32, addressed a critical concern that lifting restrictions would lead to too much traffic and noise.

"We sort of feel like we know what to expect now," she said.

Now, her group is focused on making sure that the plan to modernize Love Field, along with demolition of the excess gates, moves forward.

"There's still a lot of work to be done," said Rudy Longoria, a member of the citizens action committee who lives northwest of the airport. And although plans for Love Field seem to be moving slowly, "some progress is better than no progress at all," he said.

Highland Park resident Kay Neve, who helped found the neighborhood group Stop-and-Think, said she also has been happy with how things have turned out.

"I think competition is good to keep everybody honest, but not at the expense of safety and quality of life, and that was what was accomplished," Ms. Neve said.

Pushing for a deal

Since 1979, a federal law called the Wright amendment had placed limits on how far a Dallas Love Field ticket could take you. Originally, flights from Love Field could not travel beyond Texas and four adjoining states. In 1997 and 2005, Congress added four more states to the perimeter.

The intent was to protect the primacy of Dallas/Fort Worth International Airport.

Officials at Southwest Airlines, the low-cost carrier that generally avoids big hub airports such as D/FW and is based at Love Field, had begrudgingly gone along with the original law. But they renounced their neutrality in November 2004 and began agitating for a repeal of the limits.

American Airlines, the city of Fort Worth and D/FW Airport lined up against any changes, on the basis that any expansion at Love Field would hurt D/FW, where American operates its biggest hub. Dallas was caught in the middle.

Finally, under pressure from the state's U.S. senators, the warring parties worked out a deal -- nonstop flights will be allowed from Love Field to all U.S. cities starting in 2014.

Until then, passengers and airlines can fly from Love Field to any city, as long as they stop at an airport somewhere inside the Wright amendment area. For the first time, airlines can do "through-ticketing," selling tickets that would take a passenger beyond the Wright amendment area.

Congress approved legislation to implement the local compromise a year ago Saturday, on Sept. 29, 2006. On Oct. 13, President Bush signed it in law.

Six days later, Southwest began selling tickets that would take its customers from Dallas to Los Angeles, Phoenix, Seattle, Baltimore and all the other cities in its system that previously were off-limits from Dallas.

Ever since, the number of travelers getting on and off Southwest airplanes at the Dallas airport has been growing, from a 3 percent year-over-year increase in October 2006, to an 18 percent increase in March, to a 33 percent jump in August over August 2006.

Totaling the period from October 2006 to August 2007, the last month for which data is available, the number of passengers is up 20 percent over the same 11 months a year earlier. In August, almost 708,000 passengers passed through Love Field.

The airport has captured the additional business without an equal increase in flight capacity. Totaling the 11 months since the law was changed, the number of flights has increased only 9 percent over the same period a year earlier.

Last October, Southwest was offering 125 departures a day at Love Field; today, the number is up to 131, only a 4.8 percent increase.

Meanwhile, at D/FW Airport, airfares are generally lower to cities that Southwest has begun to serve out of Love Field. Sabre, the airline reservation system, totaled fares at both D/FW and Love Field before and after the Wright amendment changes and found that tickets to Nashville, Tenn.; Phoenix; Denver; Chicago Midway; and Oakland, Calif., are all down more than 20 percent in the Dallas-Fort Worth market.

Airline analysts call this the "Southwest effect" -- when the airline comes into a market, airfares drop overall. That's something that the D-FW area was never able to fully realize, thanks to the Wright amendment.

"Overall, we just couldn't be happier with the response," said Gary Kelly, the Southwest Airlines chief executive officer who launched the battle to open up Love Field. "It's as good as or better than we thought it would be. It certainly proves that the Southwest effect is alive and well. Those flights are full, and we're continuing to grow our frequencies out of Dallas Love Field."

Mr. Kelly and Southwest chief financial officer Laura Wright told analysts in July that Southwest had picked up an extra $50 million in revenue from the additional Dallas business. In an interview in mid-September, Mr. Kelly said the full-year totals may reach $110 million, or $120 million "with a little luck."

The compromise eventually will give Southwest control of 16 of the 20 gates that will be allowed at Love Field. Southwest operates 14 gates and has possession of a 15th, which the airline is trying to put back into operation next year.

Beyond that, Southwest is anxious to proceed with the renovation of Love Field, which will provide either major improvements to existing facilities or construction of new gates. That's all to be determined; however, the 2006 compromise requires Dallas to invest $150 million to $200 million to modernize the terminal, with the costs to be repaid from rent and landing fees.

"We're obviously anxious to work with the city and the airport to refurbish the airport and support this increased level of passenger activity," Mr. Kelly said.

Mr. Leppert said the City Council is awaiting staff recommendations on the project but said the planning was moving forward.

Effect at D/FW

The long-standing argument against allowing longer flights from Love Field was that anything that helped Love Field would hurt D/FW Airport, by far the bigger and more important facility.

Despite the dire warnings, the effect of the Wright amendment changes have, on balance, been good for D/FW Airport, officials say.

"The compromise that we proposed and the conditions agreed to have had a significant benefit to the North Texas air passenger," D/FW Airport chief executive officer Jeff Fegan said.

"Plus, the settlement eliminated the nagging fight between Dallas and Fort Worth, and now we can all work together as a region to bring more business and tourism here," he said. "And at D/FW, we have been able to focus on our core business again, which is bringing in new airlines and international opportunities that benefit our entire economy."

D/FW has seen a 2 percent dip in passengers between Oct. 1 and June 30, compared with a year earlier. However, Joe Lopano, D/FW's executive vice president for marketing and terminal management, said the number of passengers who start and end their trips at D/FW Airport is up about 5 percent.

"That's partly due to the fare reductions," Mr. Lopano said. "It's partly due to the fact that the local economy has been very strong."

The airport has lost some traffic that would have connected through D/FW if it weren't for the service now available at Love Field. Mr. Lopano said United Airlines has reduced its schedule between D/FW and Los Angeles and Chicago, and ATA Airlines has reduced its D/FW-Chicago schedule.

But the impact would have been far greater if Congress had removed all limits, as Southwest had originally advocated, he indicated.

"Given the scenario that could have occurred had there not been a compromise, this is a relatively good situation. ... Given what could have occurred, the compromise has been, on balance, good for the airport," Mr. Lopano said.

American, which with American Eagle carries about 85 percent of the passengers at D/FW, has seen its D/FW traffic drop by more than 2 percent in the first six months of 2007, or more than 500,000 passengers.

But the carrier had a horrendous time in May and June, with storms forcing the airline to cancel more than 2 percent of its flights in the second quarter -- including 1,000 flights in the last 10 days of June. The weather cancellations make it impossible to determine the effect of the new competition from Dallas flights.

American spokesman Tim Wagner said the carrier has seen no surprises in the year since the law was changed.

"What we expected to happen with the through-ticketing implementation has happened," he said. "The lower fares generated by competition have attracted some new local passengers, though relatively few. Our moving flights from D/FW to Love Field has resulted in decreasing connecting passengers at D/FW.

"I think it's true also that anything good that has been generated through the through-ticketing would have been eclipsed if Southwest had moved to D/FW and been able to fly anywhere they want in the world," Mr. Wagner said. "And the resulting decrease in connecting traffic wouldn't have happened."

American, which launched service at Love Field in March 2006 after Congress added Missouri to the nonstop states from Love, has cut back its service there. It has pulled its airplanes out of Love Field and instead offers 16 flights a day through regional partners.

Those partners had been flying to St. Louis and Kansas City, Mo., Austin and San Antonio. On Sept. 5, they eliminated flights to St. Louis and San Antonio and moved the flights to the remaining two cities.

Stopping and going

At Love Field last week, Ken Hall and his wife, Kristine, were arriving home from Maui, Hawaii, through Phoenix and Albuquerque to their home in Colleyville.

They said that they wouldn't have gone on the vacation a year ago, because they wouldn't have been able to buy a ticket directly to Maui, the last leg of which was flown by Southwest partner ATA Airlines.

Mr. Hall, 43, said that he is still annoyed, though, by all the stops. He said he frequently flies Southwest for business and wishes that he could get more nonstop flights. Waiting seven more years, he said, is too long.

"I'm looking forward, but that's still a long way away," he said.

Even though Norman Towns flew for free from Phoenix to Dallas because his mother works for the airline, the stop in Albuquerque still annoyed him.

"I don't like it at all," said the 21-year-old sophomore from Paul Quinn College. "I think it's a waste of time."

Staff writers Suzanne Marta and Vasanth Sridharan contributed to this report.

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