When we left off in the last episode of the Dallas/Delta/Southwest/Virgin America soap opera down at the end of Cedar Springs Road, Southwest had announced plans to ramp up Love Field flying to 180 departures per day by August. Virgin America, meanwhile, decided that burning piles of cash by flying to Austin would be a great strategy, thus ramping up to 20 flights per day. That left poor Delta with a problem – its gate sublease with United was set to expire July 6th, at which time the gates would revert to Southwest, but both Southwest and Virgin were now claiming that they didn’t have space to accommodate anyone else. The city of Dallas, meanwhile, was in receipt of a letter from the Department of Transportation warning that it was required to accommodate Delta as long as they continued to operate its scheduled flights. Southwest, not liking that answer, filed an appeal with the D.C. Circut Court of Appeals, asking them to invalidate the DOT’s guidance. Ugh.
Well, with July 6th right around the corner, and no resolution yet, per today’s Airline Biz Blog, the city of Dallas launched a lawsuit party, suing everyone – for those keeping score at home, that’s Delta, Southwest, Virgin, United, American, Seaport Airlines (more on those last three in a minute), the DOT, and the FAA – in federal court, asking the court to settle who exactly is entitled to what. The city’s reasoning is pretty simple: “we’re going to get sued no matter what we decide, so please do it for us so everyone will go away.” The city does have a point here. If they tell Delta there’s no room at the inn, something Southwest and Virgin would no doubt prefer, Delta, likely joined by the DOT and FAA, would most probably sue the city demanding an accommodation. Based on my reading of the plain text of the Five Party Agreement that ended the Wright Amendment, I’d say they’d have a pretty good case – Delta was granted an accommodation, and as such, the city is obligated to maintain it as long as Delta operates its flights in good faith. Plus, the city has said it has received further communication from both the DOT and the FAA insisting that they must accommodate Delta or risk an enforcement action. If, on the other hand, Dallas maintains Delta’s accommodation, Southwest and Virgin will no doubt sue on the grounds that their gates are scheduled to be fully utilized, and the city can’t force them to cut flights.
UDPATED (6/19 5:49p): The city must be clairvoyant, because Delta did indeed threaten to haul the city to court today if they don’t immediately accommodate them as requested. Apparently, as I’d long suspected, Southwest is indeed holding out for a wheelbarrow full of Benjamins in exchange for use of the gates – $30 million to be exact.
As for why American, Seaport, and United are included in the lawsuit, two are easy to explain. Seaport maintains EAS service out of Love Field via an agreement with Virgin America, so it is largely in the same both as Southwest and Virgin America. Meanwhile, United subleased its gates to Southwest, so it’s named in the lawsuit by default. But the big bombshell here has to do with American:
“On or about April 9, 2015, American made a request to the City that up to 4 daily flights be accommodated at Love Field,” the Dallas lawsuit said. “However, the City is unaware of any American accommodation request to other Airlines for Love Field gates.”
Whoa. That’s the first I’ve heard of this, and I have no idea what American might be up to. I can only speculate that they’re seeing the success of the emancipated Love and regret having given up the gates. But considering that the feds required divestiture of Love’s gates as part of the AA/US merger settlement, I’d rate the probability of American being allowed back at Love Field about the same as the airport being shut down by snow on the Fourth of July.
Dallas Officials Not Completely Free of Blame, Either
While I sympathize with the city being caught between a rock and a hard place, Dallas isn’t completely without blame here, either. The whole root of the issue is an arbitrary gate cap agreed to by the city in the Wright repeal compromise, which permanently capped the number of gates at Love Field at 20. American and Fort Worth politicos get much of the blame for this provision, but a large driver was to satisfy NIMBY concerns from the neighborhoods surrounding Love Field, who have been vocal since practically the beginning of time about how they don’t like the noise and traffic generated by the airport. While I think the traffic potential at Love is generally overstated due to growth patterns in the Metroplex remaining in the northern and eastern suburbs, it was still foolish of Dallas officials to not think a 20-gate cap would cause headaches sooner or later. That’s a total of roughly 200 flights available. Love already handled 135 flights a day before the repeal, not leaving a ton of room for growth.
But perhaps most importantly, city officials signed off on United’s sublease of its gates to Southwest earlier in the year. This was done with the full knowledge that Delta’s gate use agreement with United would run only until July 6th. Did nobody at City Hall notice the expiration date and anticipate trouble, especially with both Southwest and Virgin making no secrets about their desires to expand further at Love? To me, it’s really mind-boggling that the city didn’t require Delta, Southwest, and United to work out a permanent solution as a condition of approving the sublease. Then again, maybe city staff just didn’t notice. They seem to think more important things are worth of their attention, after all. Like, say, banning plastic grocery bags, and bickering about a toll road within the Trinity River floodway that will probably never be built anyway.
What Happens Now
In the short term, there really is no option except for the courts to decide who should be accommodated and how. Whatever the city decides, they’re going to get sued anyway, so might as well decide the issue now. The right answer, in my opinion, is that Delta should be accommodated, and Southwest and Virgin need to live with it. Long-term, however, I really don’t see a way out of future problems like this short of either lifting the gate cap, or removing the provision from the Wright compromise that forbids airlines currently flying from only one airport to operate at the other, without moving all flights. Or the launching of commercial flights at other Metroplex airports, notably Ft. Worth Meacham Field, Addision Airport, or McKinney National Airport. I’d regard the third option as the least likely, the first will likely set off a political firestorm within Dallas, and the second, while possibly benefitting Southwest and Virgin America, would be logistically difficult for connections. In other words, grab some popcorn and a soda, this soap opera isn’t ending anytime soon.