House Bill Threatens Love Field Deal

An agreement between Southwest Airlines and American Airlines on Dallas Love Field flights may face antitrust challenges, possibly scuttling the deal, under legislation approved by a U.S. House committee.

The House Judiciary Committee proposal would strike antitrust immunity for the carriers under the agreement and let the Justice Department bring any actions it deems necessary. The committee approved the accord Wednesday after striking the immunity.

The agreement may be ineffective without the immunity, said Rep. Spencer Bachus, R-Ala.

"We will litigate this thing for the next 10 to 15 years," he told colleagues on the panel. "It will be tied up in court."

Dallas-based Southwest has 96 percent of passengers at Love Field.

A 1979 federal law known as the Wright Amendment limits nonstop flights from the airport to Texas and eight nearby states. American and Southwest reached the agreement in June to remove that restriction in eight years and let Southwest immediately connect passengers from Love Field to airports throughout the nation.

The House committee's proposal "doesn't appear to be a deal breaker," Ed Stewart, a Southwest spokesman, said in an interview. "The important thing is that this is another step toward what we were wanting in the first place, giving customers more choice."

Tim Wagner, a spokesman for Fort Worth-based American, declined to comment on whether the version approved by the House committee would sink the agreement.

"There are more steps to go before we know what's ultimately going to happen," he said.

Differences in versions approved by the House Judiciary Committee and the House transportation panel will have to be ironed out, Wagner said.

Rivals including JetBlue Airways Corp. and Northwest Airlines Corp. raised concerns about the agreement, which cuts the number of available gates at Love Field to 20 from 32.

House Judiciary Chairman James Sensenbrenner, citing the competitive concerns, asserted his committee's right to review the legislation after it cleared the House Transportation and Infrastructure Committee on July 19. Sensenbrenner, R-Wis., was one of the sponsors of the proposal to strike the antitrust immunity. That change was approved by a voice vote of his committee.

"Antitrust principles are necessary to preserve competition," said Rep. John Conyers, D-Mich., who co-sponsored the change.

Northwest has a major flight hub at Detroit Metro Airport, near Conyers' district.

The Consumer Federation of America and the Consumers Union said in a letter to the House committee that the carriers' agreement is "designed to protect market share for American and Southwest Airlines."

"Everything that was agreed upon can be easily defended" from potential antitrust challenges, Southwest's Stewart said.

The Love Field agreement came after a two-year battle in Congress between Southwest, which sought to scrap the Wright Amendment, and American, which tried to preserve it. The compromise was crafted by the two carriers, the cities of Dallas and Fort Worth, and Dallas-Fort Worth International Airport, where American has its main flight base.

The Wright Amendment was intended to protect the Dallas-Fort Worth airport as the major airfield in northern Texas, while allowing Southwest to remain at Love Field.

The Senate Commerce, Science and Transportation Committee, and the Senate Appropriations Committee each approved separate legislation in July that includes the American-Southwest agreement.

Before the legislation can become law, it would need to pass in the full House and Senate, then be reconciled in a House-Senate conference committee and sent to the president for his signature.



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