MIAMI — Southwest Airlines (NYSE: LUV) announced the cities it intends to serve following the expiration of the Wright Amendment later this year. The announcement made from Dallas Love Field on Monday morning, will see Southwest add service to 15 new nonstop destinations from Love, bringing Southwest to a total of 31 nonstop destinations.
In a press conference held earlier today near its headquarters at Love Field, Southwest’s Chairman, President, and CEO, Gary C. Kelly announced big news for the Dallas-Fort Worth Metroplex:
This has been a long time coming. This morning, I am delighted to announce that we
will be adding nonstop service to 15 destinations from Dallas Love Field following the repeal of the flight restrictions imposed by the Wright Amendment… The official repeal of the Wright Amendment federal flight restrictions signifies a turning point for the Southwest brand not just in Dallas, but from coast-to-coast… We are pleased to offer this new service to the customers of our home airport, who have waited 34 long years, and we thank the many, many folks who made this opportunity a reality. Goodbye Wright Amendment. Hello, America.
Dallas Mayor Mike Rawlings and former U.S. senator Kay Bailey Hutchison joined Kelly and Southwest employees to celebrate the momentous occasion. Herb Kelleher, Chairman Emeritus and founder of Southwest, sitting in the front row alongside Colleen Barrett, President Emeritus of the airline, beamed when asked about how he felt. “Well, we’ve been waiting for 40 years, so I feel pretty good!”
Southwest had previously been restricted to serving destinations in just nine American states from its hub at Love (Texas, Arkansas, Kansas, Missouri, New Mexico, Oklahoma, Louisiana, Alabama, and Mississippi) as a provision of the 1979 Wright Amendment, which was designed to protect Dallas Fort Worth International Airport (DFW) from competition. Signed by President Jimmy Carter in February 1980, the Wright Amendment decreed that Love Field flights could go no farther than cities within Texas, or the four surrounding states of New Mexico, Oklahoma, Arkansas, and Louisiana (the others were added over time). Airlines could only serve destinations outside of those states with aircraft seating fewer than 56 passengers, which excluded Southwest, who only had a fleet of Boeing 737 aircraft seating 120 passengers or more. Ironically, American Airlines attempted short-term long-haul service out of DAL using lower capacity F-100s and ERJs as did short-lived Legend Airlines who operated an all business class service out of Love in 2000.
The cities of Dallas and Fort Worth, along with American and other airlines, had succeeded in convincing Congress to approve a law that would, in effect, protect their investment in DFW from unlimited competition out of Love. The rationale was that long-distance routes from Love would draw passengers away from DFW, thereby compromising the economic benefit and overall influence of the region’s new hub airport. Not surprisingly, Bob Crandall, chairman of American Airlines, who had recently created its largest hub at Dallas Fort Worth, argued that ‘freeing’ Love would lead to higher fares and fewer flight choices. His counterpart at Southwest, Herb Kelleher, called the amendment ‘goofy protectionism’ and argued for its repeal in front of the U.S. Congress. In 2006, then Texas senator Kay Bailey Hutchinson led an effort to repeal the restrictive amendment, eventually brokering a deal between Southwest, American, Love Field, Dallas/Fort Worth Airport, and the cities of Dallas and Fort Worth to end the geographic restrictions on air service from Love Field. Under the new deal, geographic restrictions on air service from Love Field would be lifted, while the number of gates available for use at the airport would be reduced to 20 (of which Southwest currently controls 16). And so at 12:01 a.m. on Monday, Oct. 13, 2014, Southwest Airlines will be free to fly nonstop anywhere it wants in the United States from Love Field.
The details of how it will use this newfound power are as follow:
Beginning October 13, 2014, Southwest will launch nonstop service to:
- Baltimore-Washington (BWI)
- Denver (DEN)
- Las Vegas (LAS)
- Orlando (MCO)
- Chicago Midway (MDW)
And beginning November 2, 2014, Southwest will launch additional nonstop service to
- Atlanta (ATL)
- Nashville (BNA)
- Washington – Reagan (DCA)
- Fort Lauderdale – Hollywood (FLL)
- Los Angeles (LAX)
- New York La Guardia (LGA)
- Phoenix (PHX)
- San Diego (SAN)
- Orange County,CA (SNA)
- Tampa (TPA)
Specific flight schedules and fares for the sale of these new services will be announced in May.
The route map below shows Southwest’s network at Dallas Love prior to the expiration of the Wright Amendment. Services to Branson, MO and Harlingen, TX are currently scheduled to end in June 2014.
And this route map shows Southwest’s route map from Dallas Love after the expansion.
The expansion by Southwest positions Dallas Love Field as a competitive option for travelers on the Dallas side of the Metroplex, though the airport is far from businesses on the Fort Worth end of the ledger. Southwest becomes the third major nationwide player in Dallas Fort Worth, after American with its massive DFW hub and ultra-low cost carrier Spirit Airlines, who operates several point to point (p2p) routes from DFW. American is probably the biggest loser, though their DFW hub is a massive profit center and their corporate contracts are somewhat resistant to pressure. Southwest in recent years has made enormous strides towards positioning itself as a viable option for business travelers. Thanks to programs like Business Select and network evolution allowing for more connectivity, Southwest has quarter after quarter grown its corporate travel share by roughly 10% each time. And now, Southwest is a viable option, especially for independent business travelers, and small businesses in Dallas – Fort Worth. Southwest’s core travel base will also flock to the carrier for broader leisure travel – travelers considering total out of pocket travel cost (versus advertised base fares) will find Southwest a compelling value proposition even up against Spirit. However, Southwest’s rising cost base will present longer run challenges to its competitiveness in the Metroplex.
Due to the gate cap, Airchive estimates that Southwest should be able to run about 160 daily departures through its sixteen gates. The carrier currently operates 128 daily departures to 16 existing destinations, and could be expected to add an average of two to three daily departures to each of the fifteen new destinations (higher frequency – like 5x daily to hubs like Midway and Baltimore Washington; lower frequency like 1x daily to Tampa or Orange County), necessitating a few cuts to existing routes such as Birmingham, Oklahoma City, and Tulsa. Given the restrictions, we also expect much of Southwest’s expansion at Love Field to come using the larger 175 seat Boeing 737-800 aircraft. This would be a boon for air traffic at Love Field, which has stagnated since 2008, and could see the airport surpass the 10 million passengers per year mark. Southwest’s expansion is very good for the financial prospects of Love Field.