Southwest Says It's Ready For 'Long, Hard Fight' in Texas

March 29, 2005
Southwest Airlines will pursue its campaign to repeal the Wright Amendment as long as necessary, even if it takes years, the airline's top executive said Monday.

Southwest Airlines will pursue its campaign to repeal the Wright Amendment as long as necessary, even if it takes years, the airline's top executive said Monday.

Gary Kelly, chief executive of Dallas-based Southwest, said he always anticipated the drive to eliminate the controversial amendment -- which restricts flights at Dallas Love Field -- would be a slow process.

"We knew when we got into this it would be a long, hard fight," Kelly told a group of Star-Telegram editors, reporters and editorial writers at a meeting with the newspaper's editorial board. "I don't care how long it will take, we'll keep after it until it falls under its own weight."

Kelly said he would be willing to allow the law to be gradually phased out over several years, to minimize the impact on Dallas/Fort Worth Airport and American Airlines. And he also hinted that the company might be forced to relocate its corporate headquarters to another city if Love Field remains restricted.

The Wright Amendment, approved by Congress 26 years ago, restricts flights from Dallas Love Field to adjacent states. It was later amended to include Kansas, Alabama and Mississippi.

Originally intended to protect then-new D/FW Airport from competition, the amendment in more recent years has kept Southwest -- the nation's largest low-fare airline -- from offering air service from North Texas to most of the nation.

That's because in North Texas, Southwest flies only from Love Field. The airline has rejected service at D/FW because the busy airport, which is American Airlines' largest hub, doesn't fit Southwest's business model.

Last year, Kelly broke with Southwest's long-standing neutrality on the issue and endorsed efforts to repeal the amendment, describing it as anti-competitive and out of date.

Attempts to overturn the federal law have been bitterly contested by D/FW Airport officials and Fort Worth-based American. They say the amendment is still needed to protect D/FW, which has suffered financially from the closure of Delta Air Lines' hub.

So far, the issue has gained little traction in Washington, D.C., despite lobbying by Southwest. Tennessee representatives' bill last year to allow flights from Love Field to that state died, and American apparently slowed the momentum by lowering fares between D/FW and Nashville.

But Kelly's statements Monday made it clear that the Wright Amendment issue isn't going away.

"It may take a long time," he said. The airline is willing to spend years lobbying on the issue if necessary, he said.

Ron Ricks, Southwest's senior vice president of governmental affairs, said he is working to educate members of Congress about the issue.

"Outside of a very narrow group, most people don't even know what this is about," he said. "We have an incredible learning curve."

Kelly also said he would be open to phasing the law out over time. That could help reduce the financial shock to D/FW and American.

American has a near-monopoly on long-haul flights from North Texas. Some airline analysts have estimated that the airline's supremacy here is worth as much as $500 million annually.

Financially struggling American has lost $7.3 billion since 2000, including a $761 million loss last year.

When asked what he thought about a five-year phase-out of the amendment, Ricks exclaimed, "Sold!"

But Kelly added that no one has approached the airline to discuss any type of gradual relaxation of the law.

"If we sat down to negotiate, we'd be sitting in a room by ourselves," he said.

Kelly also pointed out that Dallas may cease to be a good location for the company's headquarters if the restrictions stay in place.

Although stressing that he isn't threatening to move over the Wright Amendment fight, he acknowledged that Southwest's Love Field operation is shrinking while the airline is growing rapidly in other cities like Philadelphia and Chicago.

"Southwest is a growing company, but it's not growing in Texas," Ricks said. "The fact of the matter is, a shrinking market is not the best site to have a corporate headquarters."

Southwest's stock (ticker: LUV) rose 2 cents Monday to close at $14.20 per share.