ATA Accord to Link Southwest to D/FW

After three decades of shunning Dallas/Fort Worth Airport, Southwest Airlines plans to begin serving the airport starting next month.

Sort of.

The Dallas-based low-fare airline, which limits its North Texas operations to flights from Dallas Love Field, said Thursday that it will include D/FW in a schedule-sharing agreement with ATA Airlines, a discount carrier that flies between D/FW and Chicago Midway Airport.

"We've been looking for ways to grow [the partnership], and D/FW was a logical place," said Gary Kelly, Southwest's chief executive. "We've had great success with this so far."

The deal will allow North Texas passengers to book a flight on Southwest to numerous destinations outside the boundaries of the Wright Amendment, which limits flights from Love Field to Texas and several nearby states. ATA will fly the first leg of the trip from D/FW to Chicago, and passengers would transfer to Southwest at Midway.

Checked baggage will transfer seamlessly between the two airlines, and travelers will get credit for the entire flight on Southwest's frequent-flier plan.

Passengers will be able to book the flights on Southwest's Internet site, and the two airlines will split the revenue from each passenger.

Area travelers are likely to find cheaper fares to many cities as long as they're willing to connect. Southwest, the nation's largest discount airline, typically offers lower fares than most major carriers.

"We'll have the ability to access a hometown carrier, and access to their fares, with just one stop," said Kevin Cox, D/FW's chief operating officer. "We applaud Southwest's decision."

Southwest hasn't published the cities that will be available from D/FW through the partnership, but said they were likely to include Albany, N.Y.; Baltimore/Washington, D.C.; Buffalo, N.Y.; Cleveland; Detroit; Philadelphia; Pittsburgh; Providence, R.I.; and Raleigh/Durham, N.C., among others.

The decision to add D/FW comes on the heels of new Southwest flights to St. Louis and Kansas City, Mo., from Love Field, which began Tuesday.

Those routes are possible because of a recent change in federal law that exempted Missouri from the Wright Amendment. That 1979 law also requires Southwest passengers to buy two tickets and check their luggage twice if they want to travel from Love outside the Wright boundaries.

The D/FW code-sharing with ATA also heightens the local competition between Southwest and Fort Worth-based American Airlines, which operates a hub at D/FW.

Until this year, the two airlines competed only on flights within the Wright boundaries, with Southwest flying from Love and American from D/FW. But when Southwest began flying to Missouri, American announced plans to begin service at Love Field to St. Louis, Kansas City, Austin and San Antonio in March.

Now, the two airlines will complete, albeit indirectly, from D/FW.

"We'll be in competition with Southwest, in terms of their connections, like we always are," said Tim Wagner, an American Airlines spokesman.

He pointed out that American has been competing with ATA to Chicago for years. American has five daily flights from D/FW to Midway and 17 daily flights to Chicago O'Hare Airport. ATA has three daily flights to Midway.

The partnership between Southwest and ATA began in January but did not include D/FW. At the time, executives said including the airport could complicate their effort to repeal the Wright Amendment.

"We really wanted to educate people about the Wright Amendment, and we felt that some kind of service at D/FW would complicate things," he said.

Today, thanks to a lobbying and advertising effort, people better understand the issue, he said.

Another factor is a revision of Southwest's investment in ATA. Last year, the airline loaned ATA $40 million when it filed for bankruptcy protection and committed to making a $30 million equity investment when it emerged from Chapter 11.

Since then, an investment firm assumed Southwest's equity obligation, and the airline bought four of ATA's eight Midway gates for about $20 million. In exchange, Southwest agreed to expand the code-sharing partnership.

"We didn't specifically commit to adding D/FW," Kelly said, "but that certainly is in the spirit of what we agreed to do."

Overall, the partnership provides about $50 million a year in annual revenue, he said.

Cox said the ATA deal could be a first step toward bringing full Southwest service to D/FW.

"We are hopeful that over time, Southwest will see the wisdom and benefit of having the access to D/FW," he said.

And Wagner of American Airlines said it demonstrates that Southwest could choose to compete from the larger airport.

"This illustrates the fact that we do compete with low-cost carriers at D/FW, and there's more than enough room for competition here," he said.

But Kelly said the airline will remain at Love. "We still don't see any point to splitting our operation between the two airports," he said.

The service from D/FW becomes available for sale Jan. 3, and the flights will begin Jan. 11.

Stock in Southwest and American jumped Thursday amid optimism that the airline industry will recover next year.

Shares of Southwest (ticker: LUV) closed at $16.61, up 35 cents or about 2 percent. Shares of AMR Corp. ( AMR), American's parent company, jumped $1.83 per share, or 9 percent, to close at $21.44 per share.

Fort Worth Star Telegram


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