Study: Wright Amendment Repeal Would Harm D/FW

A new study commissioned by American Airlines concludes that Dallas/Fort Worth Airport could lose hundreds of flights to scores of destinations if the Wright Amendment is repealed.

D/FW has drafted contingency plans that take "fairly drastic measures" if the Wright Amendment is repealed, said Kevin Cox, chief operating officer at D/FW. He declined to give details.

"We have a serious problem on our hands if the repeal is successful," said Cox, who added that airport costs would double based on American's projected loss of flights. "Obviously you can't have your costs double without having a major blow to the economic engine that has served this community well for the last 32 years."

American would need to move flights because it risks losing customers who live closer to Love or who wish to travel closer to downtown Dallas.

"Dallas Love Field certainly wins here," said William Swelbar, a managing partner at Eclat who wrote the report. "But it comes at the expense of D/FW."

During the news conference, American officials took some potshots at Southwest, the nation's largest low-fare airline and the only major carrier that is still profitable.

"We have no cute slogans, no one is passing out petitions and we have no one in hot pants," Ris said, referring to Southwest's anti-Wright petition drive, which has featured employees in 1970s-style flight attendant outfits.

Swelbar dismissed Southwest's claim that repealing the amendment would stimulate more air traffic in North Texas, because fares would drop and more people would fly. That's what typically happens when Southwest enters a new market, a phenomenon dubbed the Southwest effect.

Swelbar said the gap in fares offered by Southwest and major hub airlines such as American has already closed significantly, and new Southwest service no longer spurs additional travel demand. Rather, it steals traffic from nearby airports and other airlines, he said.

"The revered Southwest effect is ancient history," he said.

Southwest officials disagreed.

"Just ask people in Philadelphia and Pittsburgh. They'll tell you the Southwest effect is alive and well," Stewart said. He said traffic in both cities has risen substantially since the airline began service.

Swelbar argued that many of those travelers would have otherwise flown from Baltimore/Washington or Newark, N.J.

Consultant Boyd said he doubted that American would move a substantial number of flights to Love, arguing that the airline could better compete from D/FW.

"American owns the D/FW Metroplex, and Southwest is locked in at Love, where it can't grow," he said. "American is in the catbird seat."

American officials would not disclose how much they paid Eclat for the study. They did acknowledge that they knew before hiring the firm that Eclat officials agreed with their position on the Wright Amendment.

Much of the public interest in the Wright issue focuses on airfares. Fares on long-haul flights from D/FW are among the highest in the nation, according to the U.S. Department of Transportation -- about 25 percent higher than the national average during the first quarter of 2005.

Southwest executives promise that fares on competitive routes will drop significantly if the amendment is repealed. In its study, the airline concluded that North Texas consumers could save $700 million annually.

A D/FW study concurred that fares would drop, although that report stressed that the airport and the regional economy could be hurt in the meantime.

The American study did not take a hard look at the effect on fares. Instead, the study pointed out that fares at D/FW have been dropping since 2001 even without long-haul competition against Southwest.

"Only very modest decreases in airfares should be expected should the Wright Amendment be repealed," the study concluded.

The Boyd study, similarly, did not anticipate a substantial drop in fares if the amendment is repealed.

Boyd called American's news conference "a 90-minute suicide note," arguing that the airline would only hurt itself by damaging its most successful hub if it moves flights to Love.

D/FW officials, who have been leading the public fight to preserve Wright, welcomed American to the battle.

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