Skift Take
You can't always get what you want. American Airlines president thinks the airline handed Southwest a monopoly when American gave up its two gates at Dallas Love Field. And that merger concession, right in American's backyard, still rankles.
There’s one nagging thing that American Airlines Group president Scott Kirby regrets about the 2013 settlement with the U.S. Department of Justice that cleared the way for the US Airways-American Airlines merger — the airline gave up too much at Dallas Love Field.
“We gave Southwest a virtual monopoly on that airport,” Kirby told attendees March 3 at the J.P. Morgan Aviation, Transportation and Industrials Conference in New York City.
On the other hand, American could choose to expand transcontinental operations in the future at LaGuardia Airport, which Kirby termed “already a strained airport.”
American Airlines Group gave up two slots at Dallas Love Field as part of the settlement. With Wright Amendment restrictions retired as of October 13, 2014, Southwest now finds it controlling 18 of the 20 gates at the airport alongside Virgin America’s two.
Bothersome Gates
Kirby said giving up the gates at Dallas Love Field is the one part of the settlement that still bothers him. He would have liked to compete with Southwest at the airport but American Airlines Group finds itself shut out.
About 70 to 80 percent of current U.S. airline industry capacity growth is tied to Dallas Love Field and the repeal of the Wright Amendment’s restrictions on long-haul flights from the airport, Kirby said, and that is about what American Airlines Group expected.
Speaking separately at the same conference yesterday, Southwest CFO Tammy Romo said Southwest forecasts a 4 percent increase in capacity growth in 2015 with about half coming from Dallas Love Field.
At the end of 2014, Southwest was flying to 33 nonstop destinations from Dallas Love Field, up from 16 prior to the Wright Amendment repeal. In April 2015, Southwest plans to tack on daily nonstop flights to nine new cities from Dallas Love Field.
Southwest previously had 16 gates at Dallas Love Field and picked up an additional two through a sublease with United. Virgin America has the remaining two gates of the 20-gate airport.
Kirby is kicking himself about agreeing to give up American’s two gates at Dallas Love Field but on the other hand the airline didn’t have much leverage if it wanted to see the US Airways-American Airlines merger pass muster.
Strained Airport, LaGuardia
Asked about reports that Delta Air Lines is working behind the scenes to win the relaxation of rules on “perimeter flying” at LaGuardia, which bars flights greater than 1,500 miles, Kirby said American Airlines Group doesn’t yet have an official position on the issue, but will soon.
American Airlines Group could conceivably add transcontinental flights if the perimeter flying rules get eliminated at LaGuardia, said Kirby, adding “that’s already a strained airport.”
He said a lot of investments would be needed at LaGuardia if that change were to happen.
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Tags: american airlines, dallas love field, lga, mergers and acquisitions, southwest airlines
Photo credit: Southwest Airlines headquarters employees celebrate the end of the Wright Amendment on October 13, 2014 at Dallas Love Field. Southwest Airlines