report
An Analysis of the Wright Amendment Controversy and Proposed Solution
Business Travel Coalition
April 10, 2006
TABLE OF CONTENTS
I. Introduction P.3
II. The Controversy P.5
III. Critical Historical Background and BTC Analysis P.5
IV. Alternative Resolutions P.11
V. Conclusions P.14
Attachment: S 1425 True Competition Act
This paper will seek to illuminate the current Wright Amendment (Wright) controversy by examining the 40-year history and rationale supporting aviation infrastructure development in North Texas. It will also examine the driving forces and motivations behind the current quest for repeal of Wright. There is spin on both sides of this issue, which will be identified and called out for what it is. Finally, alternative resolutions are examined, conclusions drawn and a Business Travel Coalition (BTC) position taken.
BTC conducted this analysis independently and received no funding from Southwest Airlines (WN),American Airlines (AA), Love Field (DAL) or Dallas/Fort Worth International Airport (DFW) in conducting this review.
I. INTRODUCTION
In November 2004 Southwest Airlines announced that it would seek to have the 1979 Wright Amendment repealed (a lobbying effort referred to here as “Wright 2004”). In July 2005 WN approached BTC for endorsement of its position. Likewise, in July 2005 American Airlines sought BTC’s support. Travel managers and communities on both sides of the issue asked BTC to consider weighing in. With considerable caution, and a keen appreciation for the emotional complexities surrounding Wright, BTC initiated a preliminary review.
BTC’s early analysis was that “Wright 2004” was not a legitimate public policy debate. Rather, it appeared to be a controversy created by one firm, WN, to advance its commercial interests, much like AA helped gin up the false FAA funding crisis in 1997 seeking to shift tax burdens to the low-fare airline sector. Moreover, the issue appeared to be local in impact and of little material bearing on national aviation policy.
As the controversy continued during 2005, WN made it clear they expected their campaign to last several years. This kind of corporate commitment to changing the status quo caught the attention of many communities across the country. Some communities saw benefit if Wright were repealed in terms of attracting WN to their airports. Others perceived a threat of diminished air services from both WN and AA as these airlines would likely redeploy their assets, routes, schedules and equipment were Wright repealed. This certainly elevated the issue to one with national implications.
WN’s campaign, though, caught the attention of more than just communities and airport authorities around the country. Senator Christopher Bond (R-MO) saw the controversy as an opening to have his state added to the list of states that could be served non-stop from DAL. The Senator’s vehicle was the 2006 Senate Appropriations bill. Senator Bill Frist (R-TN) also endeavored to have his State included. This was not a good development for those concerned with a coherent national aviation policy.
Adding Missouri to Wright exceptions via an Appropriations bill because of the parochial interests of an individual Subcommittee Chairman represented a “spin-the-dial” approach to developing aviation policy. Which state might be next and what would be the public policy rationale is the question. Important aviation policy should not be made through “back door” mechanisms like Appropriations bills, but rather through the aviation-related Committees with expertise. “Wright 2004” took on more national importance to BTC.
BTC ultimately decided to look more deeply into the growing Wright controversy and the history of the Amendment. BTC did not know at the beginning of its due diligence initiative whether it would take a position on this issue largely because it could not know what it would uncover in what turned out to be 40 plus years of Wright-related North Texas aviation history.
BTC conducted forty-seven meetings and interviews with interested parties including former Congressman Jim Wright, representatives of WN, AA, and DFW as well as the Love Field Citizens Action Committee and current and former Members of Congress and congressional staff with first-hand knowledge of the history of the Wright Amendment. Also, BTC talked to business leaders and airport officials on both sides of this controversy and reviewed many community resolutions on the topic. Finally, BTC reviewed all manner of primary documentation on the history of Wright as well as documentation provided by DFW, WN and AA.
BTC has great admiration for both WN and AA. The former championed a highly disciplined corporate culture, excellence in operations and an unmatched competency in public relations. AA likewise has been a model within the business world for operational excellence, executive leadership and marketplace innovation. BTC has opposed both airlines in the past on public policy matters and vigorously supported both as well when the merits warranted such support.
AA and WN are uncompromising competitors and their public statements should always be scrutinized. The quality of discourse from both airlines surrounding “Wright 2004” has been uninspiring and characterized by revisionist history, contests, meaningless polls, silly theatrics and inside-the-beltway posturing at the near exclusion of fact-based analysis. WN’s unprecedented rewriting of history is only marginally outdone by AA’s bodacious $500K funding of Stop and Think, a self-proclaimed citizens group.
Fortunately, as will be illustrated further on in this paper, resolution of “Wright 2004” should not be based on the narrow self-interests of individual firms. As such, and in the final analysis, it should matter little what these individual airlines think, say or do. Accountable elected officials should pursue a resolution to the current controversy that leads to what is in the highest and best public interest. Period.
II. THE CONTROVERSY
Battle lines drawn, lawsuits threatened, distrust elevated, alliances formed, emotions intensified, editorials written, hearings conducted, PR machines supercharged. If it sounds like the eve of the Wright Amendment in 1979, that would be accurate. However, it is actually what’s shaping up today as WN challenges Wright.
Why has very little changed in 27 years? The answer to this question can illuminate what this controversy is, and is not about, and why Wright was necessary in 1979, and arguably relevant today. From BTC’s investigation, Wright represents the desire, intent and right of North Texas communities to plan for and strategically invest in commercial air services infrastructure for their benefit. There is nothing more to this.
The current Wright controversy is not about airline competition, low fares, WN versus AA or the removal of the “final vestiges” of a once regulated industry. It is about a single firm’s pursuit to change the rules for their commercial benefit at others’ expense, and those potentially affected parties seeking to protect their interests. Indeed, to understand why very little has changed and what is driving the current controversy, some background information is useful.
III. CRITICAL HISTORICAL BACKGROUND AND BTC ANALYSIS
Long before WN began Texas intrastate scheduled service at DAL in 1971 or AA moved its headquarters from New York City to Dallas in 1979 the seeds were sown for a massive restructuring of and investment in North Texas aviation system infrastructure.
In the early 1960s the Civil Aeronautics Board (CAB) informed the cities of Fort Worth and Dallas that the USG would stop funding multiple commercial airports within North Texas as the inefficiencies were judged harmful to the public interest. CAB’s instruction was for the two cities to jointly build, own and administer a single commercial airport to serve the region’s needs.
The cities created the DFW Board in 1968 and set out to build the new DFW international gateway airport; bonds were sold to fund the airport. Central to this undertaking was the signing of bond covenants by the two cities stipulating a phasing out of passenger air service at their existing airports. The 8 airlines using Dallas and Fort Worth airports at the time (1968) signed Agreements to move operations to DFW (officially opened in 1974). The closing of airports or the restriction of their use has since become best-practice policy for communities committing to investment in new major airport development projects as well as requirements by airlines considering offering new services. Indeed, before agreeing to start services at Austin-Bergstrom International Airport, WN insisted that Robert Mueller Field be shut down. Similarly, before agreeing to start services at Denver International Airport, United Airlines insisted that Stapleton Airport be closed.
To understand WN’s growth plan outline from its inception is to more fully understand Wright, what’s at stake for WN and why WN is committing so much energy and financial and other resources to its repeal efforts.
WN Phase One at DAL, 1971-1979
Saturate Intrastate Texas Markets
After legal challenges from Texas International and Braniff, WN began scheduled intrastate service in 1971 from DAL. This was after Dallas and Fort Worth made their commitments to the new DFW and after airlines signed agreements to move there, but before the airport opened in 1974. WN refused to move to DFW in 1974 triggering a lawsuit from the cities of Fort Worth and Dallas as well as the DFW Board requiring WN to move to DWF. The legal loophole that WN exploited was the notion that CAB rulings and the cities’ bond ordinances applied only to federally certificated airlines and interstate commercial air services. Despite the wishes of the citizens of the region to consolidate commercial air services at DFW, WN continued to fly to points within Texas from DAL.
In 1975, the second of two bond ordinance-related lawsuits was filed against WN by most of the airlines that had signed the agreement to move operations to DFW. These airlines were now prohibited from flying from DAL, while WN enjoyed a protected, court-sanctioned right to operate from the most desirable airport in the region. The main point of the case was that all airlines should be required to provide commercial air services from DFW. WN won this lawsuit. Consequently, from 1974 until 1979, when Wright became law, WN effectively was the only airline permitted to offer commercial air services at DAL. This enabled WN to monopolize DAL and saturate the intra-Texas marketplace. Today WN has 97% market share at DAL making it the most concentrated airport of significance in the country.
WN has endeavored to rewrite the history of these two lawsuits having everyone believe that the cities and airlines were trying to kill the little start-up as it fought battle-by-battle all the way to the US. Supreme Court. In point of fact, WN was the aggressor in this intrigue exploiting a legal loophole in disregard of the intent of the peoples of Fort Worth and Dallas.
If not for this disregard, WN should at least be admired for its perseverance and perspicacity. WN was able to secure for its shareholders a protected monopoly at DAL and to reach its Phase One intrastate growth potential.
WN Phase Two at DAL, 1979-2004
Build Short-haul Stronghold Under Federal Protection; Build National Network Via Operations in Contiguous States
In 1978 Congress deregulated the U.S. airline industry. WN was well positioned to exploit the next opportunity to step up from providing intrastate commercial service from DAL. It now sought to leverage a mantra of deregulation that any willing, fit and able airline should be allowed to provide service to any airport in the country. WN filed with the U.S. Department of Transportation (successor to CAB) to serve New Orleans from DAL. According to BTC research, from the point of view of most North Texas stakeholders, this step was considered exceedingly aggressive, and an affront to their civic sensibilities.
With new calls to close DAL permanently to commercial air passenger services, House Majority Leader Jim Wright, who strongly believed that DAL should have been closed per the original agreement between the two cities, negotiated a settlement with WN CEO Herb Kelleher. The agreement was that WN would be able to fly from DAL to the four states contiguous to Texas. Given that WN had a penchant for seeking to exploit loopholes to their competitive advantage, an extra precaution was taken and the agreement was codified in an amendment to the International Aviation Transportation Act of 1979.
With the agreement of WN, the City of Dallas, the City of Fort Worth and the DFW Airport Board, Wright allowed DAL to remain open only so long as commercial passenger service would be limited to points in Texas and the contiguous states, i.e. DAL would remain a short-haul airport. There is little doubt that the city of Fort Worth would have continued to push to close DAL without Jim Wright’s negotiated settlement, since it had already closed its own local airport per its agreement with the city of Dallas. In fact, many still advocate for the original agreement between the cities. Specifically, U.S. Senators Jim Inhofe (R-OK) and Tom Harkin (D-IA) introduced in 2005 The True Competition Act (S. 1425) that would close DAL to commercial service over a 3-year period. (See attached.)
Nonetheless, via an act of Congress in 1979, the Wright Amendment truly institutionalized WN’s intrastate air service monopoly at DAL and enabled it to begin Phase Two of its impressive corporate march. Since 1979, the only changes to Wright were the 1997 “Shelby Amendment” which allowed service to three additional states as well as unrestricted interstate flights on aircraft with fewer than 56 seats. In 2005, Senator Christopher Bond (R MO) had Missouri exempted from Wright via an appropriations bill.
WN Phase Three, 2004-Present
Seek Long-Haul Ambitions Exploiting Stronghold Position Developed over Three Decades Under Federal Protection
During the past 27 years WN has developed the strongest Balance Sheet by far of any U.S. airline enabled in no small part by its protected status at DAL. WN has largely saturated the U.S. marketplace where its business model works, i.e. markets with large populations and potentially high traffic levels.
Importantly, the airline has been running out of low-risk expansion opportunities in recent years and into new types of competitors. As WN’s CEO Gary Kelly said on an analyst conference call some 2 years ago, WN is no longer worried about AA, Continental and the other major network airlines. Instead, it is now focused on JetBlue, AirTran and other low cost carriers (LCCs). Moreover, WN’s fuel hedges largely expire in 2006 and new, more lucrative employee contracts are beginning to put pressure on costs. In short, WN needs to grow, and Wall Street expects it to deliver.
Pressure to grow, increasing competition from other LCCs around the country and, most importantly, the prospect of new LCC competition from DFW are the keys to understanding why WN changed its long-standing “passionate neutrality” regarding Wright. In November 2004, Delta announced that it would significantly reduce operations at DFW, leaving the airport with over 20 empty gates. WN clearly viewed the entry of JetBlue, AirTran, and other LCCs into those gates, which are more than WN’s 14 gate operation at DAL, as a very serious threat.
However, by publicly and loudly calling for Wright’s repeal, the LCCs thought twice about coming to DFW. In fact, BTC found that those carriers would not use DFW’s empty gates unless their leases gave them an exit clause if Wright were ever repealed. Hence, WN had chilled new entry and at the same time pushed for the potential growth into long-haul markets like Los Angeles if Wright ever were repealed. A classic win-win situation for WN as potential new entrant competitors at DFW will not enter DWF and the North Texas marketplace with the future of Wright in question, while WN will benefit handsomely and exclusively if Wright is repealed.
Indeed, in the fall of 2004, when WN renounced its commitment to abide by Wright, it should have come as little surprise to industry observers familiar with the history of WN at DAL and the dwindling growth prospects the airline currently faces in the marketplace. WN now seeks to enter Phase Three of its onward march with the saturation of a dozen or so key long-haul markets. WN’s own study by Campbell Hill Associates identified 15 large, long-haul markets that WN would fly to if Wright were repealed.
Finally, in creating the “problem” WN has cleverly positioned itself to propose a “fair solution” -- Phase out Wright. If phased out, WN would benefit enormously from its monopoly position at DAL, particularly because of the fact that the Love Field Master Plan limits the airport to 32 gates. The carriers that signed that Master Plan in 2001 would not have done so if they knew what WN would soon thereafter do. Indeed, the actual Master Plan explicitly assumes that Wright would remain in place.
To be sure, this entire saga started in the 1960s when the federal government directed the cities of Fort Worth and Dallas to decide on a jointly owned regional airport and refused to fund multiple airports so close together. A world-class airport was proposed by the cities in 1968 and the USG sanctioned the project and committed $96M of taxpayers’ money conditioned on the basis that both cities pass legal ordinances permanently closing Meacham Field, Love Field and Southwest International Airport to all commercial passenger services.
WN successfully exploited a narrow legal loophole and has endeavored to leverage its DAL position ever since. Wright would not have been necessary but for WN’s ambitions that prevented Fort Worth and Dallas citizens from proceeding confidently with their plans for regional aviation infrastructure development.
Wright is not a vestige of a regulated era. Wright codified a one-off, negotiated proposal, at the national level, because such an agreement could not be consummated at the local level, and importantly, there was little confidence that WN would stay committed to a local agreement over the long term.
When the new Denver airport was opened, for example, Stapleton was closed. This is a logical, common practice found around the world and is central to the economics of aviation infrastructure development. Wright reflects the same kinds of agreements among local governments and stakeholders that was made in Denver--nothing more, nothing less, and certainly not federal government economic regulation.
Had Wright not come to pass, and had DAL been consequently closed, there is no way of knowing what would have happened. WN could have moved its operations to the new DWF and succeeded, or moved to another state. We just do not know. Just like no one knows how the Denver air services market would have developed were Stapleton permitted to stay open.
But what we can know are the consequences of Wright.
Consider the legacy of Wright:
§ The Amendment ended bitter, divisive and expensive litigation and allowed the wishes of North Texans to be largely respected.
§ The objective of Wright was not to restrict DAL, but to allow it to stay open for the benefit of 1 airline, WN. With the advantage of a truly protected base, the fledgling WN has grown into a powerful giant and today transports more passengers than any airline in the world.
§ DFW has flourished as a premier national hub and a vital international gateway justifying a recent multi-billion dollar investment in its international facilities.
§ The economy of North Texas has exploded with economic activity tied directly to DFW including hundreds of thousands of new jobs and corporate relocations and expansions.
Indeed, these are the benefits that are normally used to justify multi-billion investments in aviation infrastructure all over the world. Fort Worth and Dallas were not able to proceed 100 percent as originally planned, but the limitations imposed on DAL via Wright got them close to the aviation infrastructure development models in use at Denver, Seattle, Detroit, Minneapolis/St. Paul, Austin, Cleveland, Tokyo, Toronto, Milan, Paris and many more cities.
Finally, in analyzing the impact on business travelers and those organizations that fund business travel activities in small and mid-sized cities as well as in North Texas, BTC found that Herb Kelleher actually articulated the impact best in 1990:
“We think that there is some merit to the position that there is no city in the United States that has two full-fledged hubs competing against one another successfully….we too have to agree as a matter of logic and principle that if you allowed Love Field to come up as a full-fledged hub in opposition to DFW Airport that indeed air service to the metroplex would suffer to some extent because basically a hub-and-spoke system depends for its success upon attracting passengers from a multitude of spokes that will fill up an airplane going to another destination. If you divide that type of operation between two airports, you’re likely to lose service to some of the smaller cities.” Deposition of Mr. Herb Kelleher in Zamutt v. Skinner, US District Court of California, October 8, 1990.IV. ALTERNATIVE RESOLUTIONS
In seeking a resolution to the current controversy, elected officials should focus on the public interest, not what’s in the interest of AA’s or WN’s shareholders. There would appear to be 5 alternative courses of action available:
§ Do nothing
§ Repeal Wright immediately
§ Phase out Wright over 3 years
§ Close DAL immediately
§ Phase out DAL over 3 years
1. Do Nothing. Reject the business objectives of a single firm, WN.
Public Interest Benefits
§ Enables the continuation of significant economic benefits Wright currently generates.
§ Maintains public confidence in the principle that parties to an agreement should be bound by their Corporate Seals.
§ Prevents new, expensive and fractious lawsuits.
§ Minimizes the potential degradation of air services for small and mid-size communities inside and outside of Texas.
§ Optimizes feeder traffic for international services from DFW.
§ Provides low-fare airlines with the confidence to begin operations at DFW taking advantage of Delta Air Lines’ abandoned gates and bringing more low-fare competition to North Texas.
§ Keeps open the option for WN to compete at DFW in both long and short-haul markets.
§ Maintains the integrity of the subscribed-to DWF bonds upon which retirees and other citizens rely for fixed income.
§ Allows for the 2001 Love Field Master Plan to be adhered to with significant safety and public health considerations.
Drawbacks
§ Leaves Wright unsettled in the public arena so long as WN seeks repeal thus dampening enthusiasm for decisions on forward-looking initiatives.
§ Prevents more convenient long-haul services from DAL for some Dallas business and leisure travelers.
§ Limits consumer benefits by preventing a major fare war at DAL.
2. Repeal Wright immediately. Allow long-haul services from both DAL and DFW as soon as practicable.
Public Interest Benefits
§ A flooding of capacity and competitive battle would ensue at DAL in a dozen large long-haul markets already served by LCCs from DFW.
§ DAL would offer more convenience for some leisure and business travelers from Dallas who live closer to DAL than DFW.
Drawbacks
§ A massive fare and capacity war in a dozen well-served markets, that could spread, would further weaken a near-insolvent air transportation system that virtually all businesses depend upon to service their own customers and grow their industries.
§ Ignores best-practice public policy for regional aviation infrastructure development and places at risk associated economic benefits previously outlined. (A key reason Seattle in 2005 did not allow WN to proceed with development plans at Boeing Field.)
§ Wastes scarce federal resources by funding inefficient operational and security redundancies as well as counterproductive rivalries between 2 airports 8 miles apart serving the same market.
§ Small and mid-size communities as well as some international markets will likely lose service from WN and AA, or face degradation in services or equipment.
§ Creates yet another legal nightmare by gutting the Love Field Master Plan and prompting AA and other airlines to take legal action to secure their fair share of gates and to expand overall capacity at DAL.
§ Creates safety (minimal safety zones at DAL), health (noise-induced learning problems for school children) and quality-of-life concerns (noise and congestion impacts on neighborhoods) for hundreds of thousands of residents, schools, daycare centers and businesses. A decline in property values is also a concern.
3. Phase Wright out over 3 years. Gradually open up DAL to long-haul flights.
Public Interest Benefits
§ Same as above, only moderated.
Drawbacks
§ Same as above, only moderated.
4. Close DAL immediately. Eliminate commercial passenger services from DAL as soon as practicable.
Public Interest Benefits
§ Allows for 100% of the benefits from the best-practice model of avoiding rivalries among same-market airports once strategy has been set for regional aviation infrastructure development.
§ Low-fare airlines would likely enter DFW, and along with WN’s likely move to DFW, optimal consumer benefits would be generated consistent with the vision of a unified aviation infrastructure strategy for North Texas.
§ If closed completely and available for adaptive reuse, the real estate assets could generate substantial new tax revenues as has been the experience in Denver.
§ The health, safety and quality-of-life for DAL-area residents and businesses would improve.
Drawbacks
§ Would create some inconvenience for some Dallas leisure and business travelers who live closer to DAL than DFW.
§ Would dislocate DAL workers.
5. Phase out DAL over three years. Gradually eliminate commercial passenger services from DAL.
Public Interest Benefits
§ Same as above, only moderated.
Drawbacks
§ Same as above, only moderated.
V. CONCLUSIONS
BTC believes that competition between airlines is the key to lower fares and better service for the business traveler and that competition between airports only miles apart does not produce the same benefits and has resulted in wasted federal resources, legal quagmires and irrational business decisions that are, on balance, not good for the consumer. What good is it for corporations that field business travelers in Green Bay, Wisconsin, or Toledo, Ohio, if AA pulls a jet from DFW to now serve the DAL-STL local market thereby reducing connecting opportunities for those travelers in markets like Green Bay and Toledo?
In reaching the conclusion that the best public policy choice would be to phase out DAL from commercial service and have WN fill the 20 plus gates at DFW and fly wherever it chooses, BTC believes that AA and WN competing at DFW would give business travelers across the country the best of both worlds: Head-to-head competition in the dozen larger markets that would have benefited by Wright’s repeal and an in-tact connecting network via DFW to important national and international business centers. At the same time, such a policy choice would save U.S. taxpayers millions of dollars currently spent each year on two assets next door to each other while one of those assets has over 20 empty gates. Repealing Wright would simply add to this federal duplicative spending.
Finally, two facts greatly trouble BTC. First, WN’s actions have resulted in a chilling of new entry at DFW which now has a tremendous amount of excess gate capacity. As a result, business travelers, and the organizations that fund business travel activities, over the past 18 months have not received the competitive benefits that such new entry brings. As this controversy lingers, the forgone competitive benefits to business travelers grow. This greatly concerns BTC. Second, during its review, BTC learned that the landing fees at DAL were so low that they amount to a backdoor subsidy to WN with the federal government left to pick up a bigger tab for airport improvements. This has even led to an ongoing Department of Transportation Inspector General investigation. This circumstance has led BTC to place a great degree of focus on the federal expenditures involved for two airports so close together—a circumstance that the USG rightly did not want to be in back in the 1960s, which in turn started the entire controversy surrounding DAL, and eventually Wright.
Accordingly, in BTC’s view, the best course of action would be to phase out commercial passenger service at DAL over three years and obviate the need for Wright altogether along with the continued duplicative federal spending on two airports next door to each other. This alternative produces superior business traveler and public interest benefits compared with other alternatives outlined above and would ensure an ironclad end to the contentious issues surrounding air services in the North Texas region.
Importantly, WN has taken on a fundamentally different competitive profile in the past few years. Where it used to almost exclusively favor secondary, lower cost airports, where it could avoid direct competition with larger airlines, it now enters major airports and successfully goes head-to-head with the established incumbents. Philadelphia, Denver, Las Vegas, Los Angeles, Phoenix and Ft. Lauderdale are just some examples of major airports that WN succeeds in. And, WN just announced its intention to operate from Dulles, another high-cost, congested airport.
No less than Lamar Muse, WN’s CEO during the 1970s, believes that Wright is very important to maintain today. Speaking with the Dallas Morning News in April 2005, Muse asserted that back in the 1970s WN was smart to stay at DAL because DWF was out in the “cornfields,” but today it is the center of the “metroplex” with great opportunity for WN. Indeed, during a 2004 WN shareholders’ meeting Muse questioned why WN could not serve 2 Dallas-area airports, its headquarters city, when it could profitably serve 4 Los Angeles and 2 Boston market-area airports, (and now 2 Washington, DC airports). Muse added that where DAL offers limited growth opportunity, growth at DFW is virtually unlimited.
BTC believes that corporations that fund business travel activities, the North Texas region and the federal government would be best served by WN moving to DFW and going-head-to head with the airlines that moved from DAL to DFW years ago years ago as well as with recent and future new entrants. In an era of ever scarce economic resources, there is precious little public policy justification for continued protection of the competitive powerhouse that is WN. What’s more, as evidenced by WN’s “Wright 2004” efforts, codification of North Texans’ wishes in Federal law is obviously insufficient. It is arguably time to do what Denver and other cities have done and close DAL to commercial passenger services and conclude this matter.
×××END×××
Attachment
True Competition Act (Introduced in Senate)
S 1425 IS
109th CONGRESS
1st Session
S. 1425
To give effect to the original agreement entered into by the cities of Dallas, Texas, and Fort Worth, Texas, to build a single airport to provide for the commercial air transportation needs of the region, and for other purposes.
IN THE SENATE OF THE UNITED STATES
July 19, 2005
Mr. INHOFE (for himself and Mr. HARKIN) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation
A BILL
To give effect to the original agreement entered into by the cities of Dallas, Texas, and Fort Worth, Texas, to build a single airport to provide for the commercial air transportation needs of the region, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `True Competition Act'.
SEC. 2. CONGRESSIONAL FINDINGS.
Congress finds that:
(1) The Dallas/Fort Worth International Airport was constructed in 1974 to serve as the exclusive airport providing all commercial air service needs of the Dallas/ Fort Worth Metroplex.
(2) At the explicit direction of the United States Civil Aeronautics Board, before obtaining financing or beginning construction, the Cities of Dallas and Fort Worth agreed to consolidate all commercial air service from all local airports at the new Dallas/Fort Worth International Airport facility.
(3) The consolidation of all commercial air service at one major airport is consistent with practices in numerous metropolitan areas throughout the country, and is considered to be sound transportation policy and a major factor in generating economic growth for entire regions.
(4) Despite the original agreement between Dallas and Fort Worth, which was absolutely essential to proceed with construction of the new airport, judicial and legislative challenges by an airline that refused to move to the new facility undercut the local consensus by permitting limited operations from the close-in Dallas Love Field to continue for the past 25 years.
(5) Relying on the continued limited scope of Love Field, the communities recently embarked on a major $2,800,000,000 expansion of the Dallas/Fort Worth International Airport which has reached completion.
(6) The current dire economics of the airline and airport businesses have put a severe strain on the finances and viability of the Dallas/Fort Worth International Airport and the carriers serving it, resulting in substantial unused capacity and financial pressure that is exacerbated by the continued use of Dallas Love Field.
(7) In contrast, there are virtually no capacity or facilities available at Love Field except for those controlled by one carrier that operates over 97 percent of all the seats in and out of the airport.
(8) In addition to economic, competitive, and transportation planning problems, air traffic control experts have expressed concern about air space congestion generated by the close proximity of Love Field to the Dallas/Fort Worth International Airport.
(9) Although not intended to be used for commercial air service, Love Field remains an important resource for general aviation and business aircraft, which provide an important economic benefit to the Dallas/Fort Worth region.
(10) In order to reduce air congestion problems, create a more efficient and viable air transportation system, and give full effect to the original agreement between the Cities of Dallas and Fort Worth, scheduled commercial air service at Love Field should be ended and the facilities made more broadly available to general aviation and business aircraft.
SEC. 3. TERMINATION OF SCHEDULED PASSENGER AIR SERVICE AT LOVE FIELD.
Effective on the date that is 3 years after the date of enactment of this Act, and notwithstanding any other provision of law, Love Field, located in Dallas, Texas, shall be ineligible to hold an airport operating certificate pursuant to part 139 of title 14, Code of Federal Regulations.