D/FW, American Agree on Wright, But Fight is Costly for Both

On Thursday, American will launch 16 daily flights from Love Field, its first North Texas service away from D/FW in more than four years.


The tough part for D/FW, according to Mr. Stettler and others, is that American's might at D/FW repels other carriers in an industry in which airline finances remain fragile and carriers want passengers without a fight.

Southwest wants to fly nationwide from Dallas but won't serve D/FW, primarily because of American's girth there. Southwest also says its home airport, the smaller Love Field, has a vastly superior design for its quick-turn operations.

Delta said that it lost money at D/FW in nine of the last 12 years it operated a Dallas hub, and that it couldn't compete with American.

Low-cost carriers such as AirTran Airways Inc. arrived at D/FW with much fanfare. But AirTran flies less today than it did two years ago. It will add service to Chicago's Midway Airport this spring but doesn't have big expansion plans for D/FW.

Since Delta left, D/FW has offered incentives to any carrier to fill the empty 22 gates. Spirit Airlines added one daily flight to Fort Lauderdale, but there have been no other takers, in part because of the uncertainty about the Wright law, which limits most commercial service from Love Field to nine states.

"It's a bit of a vicious cycle," said Stuart Klaskin of Klaskin Kushner & Co. in Miami.

"American and D/FW are victims of their own success. D/FW's biggest hope is just to get new service in dribs and drabs because no one is going to step in against American."

Many differences

American, the world's largest carrier, makes no apologies. "Any businessman who tries to say to you that they 'welcome competition' is trying to pull a fast one," said Mr. Garton, who expects D/FW's empty gates to get filled over the next few years. "We accept competition, but we are very competitive ourselves."

American understands that D/FW has to sell itself to other carriers, even if it doesn't really want more foes at the airport, Mr. Garton said.

Despite appearances, Mr. Garton said, American and D/FW have had plenty of differences over issues large and small.

"I guarantee you right now we're in debates with D/FW about any number of things, and that I have many times in my life gone to swords with them" over everything from fees to how many de-icing stations American gets for its planes, Mr. Garton said.

He described a "knock-down, drag-out fight" with D/FW over the lease at the new international facility, Terminal D, as an example of how American doesn't have sway with D/FW.

American came close to not signing the lease at some points, but was careful to keep it quiet. "We didn't want the public to see the dirty laundry we were washing," Mr. Garton said.

"It happens at every airport," Mr. Fegan said. "We try to do what's best for the long term, and sometimes that collides with American's short-term interest."

Max Wells, who stepped down from the D/FW board last July after seven years, said the board has a duty to listen to American. "If you had a 100-floor office building and one guy had 85 floors and they wanted something, you'd pay attention," he said. But "our interests were not always what American's were."

When D/FW decided to give four gates on Terminal B to AirTran, American "wasn't happy about that, and I was one unpopular chairman, that's for sure," Mr. Wells said, recalling having to sit at a table of American executives shortly after the decision was made.

Same dilemma

Other airports that host big hub carriers face the same dilemma D/FW does.

At Cincinnati/Northern Kentucky International Airport, finding new service to offset Delta's 92 percent market share has been nearly impossible.

"When you have a carrier with something like 500 flights a day, its going to be hard for someone else to get a niche, " said Ted Bushelman, a spokesman for the Cincinnati airport.

As with American at D/FW, Delta brings Cincinnati dozens of nonstop flights it couldn't otherwise support. But both airports are consistently atop the Department of Transportation's quarterly fare report that outlines a "fare premium" for business travelers who buy tickets on short notice. American executives bristle at the fare data, saying they offer lower advance-purchase fares in some cases than Southwest does at Houston's Hobby Airport.

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