Study: Wright Amendment Repeal Hurts D/FW

Dallas Love Field, where Southwest Airlines is dominant, could see traffic double or even triple if the Wright Amendment were repealed, a study commissioned by Dallas/Fort Worth Airport says.

Officials with Dallas/Fort Worth Airport released a study Tuesday saying that a repeal of the Wright Amendment could shift hundreds of flights and millions of passengers to Dallas Love Field.

The study, prepared by Boston consultants Simat, Helliesen & Eichner, also concluded that D/FW could lose flights to many cities, including overseas, if the amendment is eliminated.

Under the study's worst-case scenario, a Wright repeal would cause D/FW to lose 204 daily flights and 21 million passengers, a 35 percent drop. Traffic at Love Field, meanwhile, would triple.

Even under a more moderate scenario, the study concludes that the airport could well lose 121 flights, with traffic at Love Field doubling.

The decline in traffic would force American Airlines to cut many destinations from D/FW, the report concluded.

"This is disturbing," said Dan Petty, president of the North Texas Commission. "It's clear that repeal of the Wright Amendment would not be good for the North Texas economy."

D/FW paid $100,000 for the study, which supported the airport's long-standing position that repealing the amendment would be bad for the airport and for the region.

"Our mission with this was to learn if our fears were based on fact or folly," said Kevin Cox, the airport's chief operating officer. "Our worst fears were confirmed."

In a statement, American Airlines praised the study, calling it "very thorough" and "even conservative in some respects."

Others questioned the study's conclusions and suggested that it was biased.

"D/FW paid for this, and they got what they paid for, which are the answers they expected," said Ed Stewart, a spokesman for Dallas-based Southwest Airlines. "But to us, these answers don't hold water and make absolutely no sense."

One analyst pointed out that the study didn't address the question of how repealing the amendment might affect airfares.

"A benefit for the community in this is whether fares go down," said Alan Sbarra, an airline industry analyst and consultant with Roach and Sbarra Consulting. "That's what many people are going to care about."

The study was the latest salvo in an ongoing battle over the amendment that has pitted D/FW Airport and Fort Worth-based American Airlines against Southwest. The law, approved by Congress in 1979, permitted flights from Love Field only to adjacent states. It was later amended to include Kansas, Alabama and Mississippi.

Southwest long remained neutral on the law, but it began lobbying late last year to get it overturned.

In North Texas, Southwest operates from Love Field but not D/FW. Southwest is dominant at Love, while American is the dominant player at D/FW.

Some analysts have said the Wright Amendment is worth several hundred million dollars annually to American.

The study's author, Christina Cassotis, said she tested various scenarios regarding both airports using airline traffic data and other information.

Some of her findings matched recent statements by American Airlines executives, who have said that they would move a substantial number of flights to Love Field if the amendment were lifted.

Her worst-case prediction assumes that the Love Field Master Plan, which the city of Dallas approved in 2001 and limits the airport's size to 32 gates, will be overturned if the Wright Amendment goes away.

That concerns Pat White, co-chairwoman of the Love Field Citizens Action Commission, which represents neighborhoods near the Dallas airport.

"The 32-gate limit would not hold if there's more demand for service there," she said.

Executives with American have said that they will challenge the master plan in court if the Wright Amendment is eliminated.

But Southwest officials insist that the master plan will remain in force, even if the amendment is repealed, and that they will abide by it.

The report estimates that Southwest would add 98 flights at Love if the master plan is eliminated, or 77 if the plan remains. The airline now has 112 daily flights.

But Southwest has predicted more modest growth. Gary Kelly, the airline's chief executive, has said that if the amendment is repealed, Southwest will initially add about 22 flights and up to 50 over several years.

The study does not mention the amendment's impact on airfares, which for many travelers is central to the debate.

Fares are also the crux of Southwest's argument. Airline officials say fares would drop at both Love and D/FW if the restrictions are lifted, and more people would fly out of both airports.

"We've never gone into a market that didn't grow," Southwest's Stewart said. "That's what would happen at D/FW."

Sbarra said the big question for North Texas consumers is whether lower fares are worth some drawbacks, such as the shifting of flights from D/FW to Love Field or reduced service to some smaller cities.

"That's what people need to consider," he said. "It's a complicated issue."

Study author Cassotis told reporters at an airport briefing Tuesday that fares will likely decrease if the Wright Amendment is eliminated. But she added that new low-fare airlines will likely come to D/FW, lowering fares there, even if the restrictions remain.

"Fares would drop in either case," she said.

Since Delta closed its hub at D/FW this year, D/FW officials haven't had any luck in attracting new low-fare service. The airport has offered $22 million in incentives, but no airlines have signed on.

The only low-cost airline to add flights at D/FW in recent years, AirTran Airways, has faced a fierce battle with American, particularly on routes to Los Angeles.

Airport officials also released a packet of quotations attributed to Herb Kelleher, Southwest's co-founder and chairman, that appear to support the Wright Amendment.

For example, the airport produced a 1979 quote from the Star-Telegram in which Kelleher said he was "personally pleased that the Wright Amendment will finally bring peace to the Dallas/Fort Worth area."

But Southwest spokesman Stewart pointed out that most of the quotes are 15 to 25 years old and claimed that they were taken out of context.

"In no way, shape, form or fashion has Herb ever supported the Wright Amendment," Stewart said.

Southwest's stock (ticker: LUV) dropped 43 cents to close at $14.95 per share. Stock in AMR Corp., American's parent company (AMR), fell 36 cents to close at $11.02 per share.

Consultants say that if the Wright Amendment is repealed:

Dallas/Fort Worth Airport, the world's sixth-busiest airport in terms of passengers, would drop to 16th, based on Airports Council International figures.

D/FW could lose 14 million to 21 million passengers, dropping it to 1985 levels. Traffic would not recover for 19 years.

Fewer passengers and more debt would likely require higher landing fees, raising the costs for airlines and making it harder for D/FW to attract new carriers.

Connecting international passengers would drop up to 24 percent, which would likely mean fewer flights to Latin America.

Flights at Dallas Love Field could triple, resulting in up to 16 million more passengers annually, which would add congestion to surrounding neighborhoods. Pressure to use larger aircraft could render invalid Dallas' master plan, which limits growth at the airport.

SOURCE: Dallas/Fort Worth International Airport: Potential Airport Impacts -- Repeal of Wright Amendment by Simat, Helliesen & Eichner; D/FW Airport