The FAA’s Magical Thinking at Dallas Love Field Misses the Simple Solution

Dallas Love Field has 20 gates. They are legally forbidden to build more. (Thanks, Congress!)

Southwest has 16 gates. They’ve subleased 2 from United. That’s 18.

The other 2 gates are controlled by Virgin America.

Delta flies from the former United gates. There’s a big court battle over whether they’ll be able to continue to squat on those gates or not. And it all started with the federal government requiring American to give up its gates to Virgin America.

Playing Musical Chairs Gates at Dallas Love Field

How did Delta wind up without leased gates at Dallas Love Field?

  • Part of the price for American getting government signoff of its merger with US Airways was giving up its gates at Dallas Love Field that it wasn’t using. American doesn’t want to fly from Love Field, since its major operation is across town at DFW. It used to lease those gates to Delta. The government required it to give up the gates, and Delta was without a home.

  • So Delta leased United gates. United didn’t want to fly from Love Field really, it was squatting on its gates with a ton of Houston Hobby regional jet flights. So might as well have Delta pay to use the gets instead of burning cash on money losing flights.

  • But Southwest struck a deal to get the United gates, and that left Delta without a home. Love Field would have Southwest and Virgin America service instead of Southwest and Delta service, thanks to the game of musical chairs set in motion by the Department of Justice.

The Department of Transportation said that the City of Dallas had to continue to accommodate Delta at Love Field. Even though it had no gates to do so, couldn’t legally build more, and Southwest had a valid lease for the gates Delta was using.

Everyone wound up in Court. Just for kicks, American Airlines now says they want gates at Love Field, too! (They don’t really, they’re just messing with everyone.)

Southwest has agreed to let Delta continue using one gate at Love Field until the judge rules after the federal court hearing that’s currently scheduled for the end of September.

The FAA Insists on Magical Thinking at Love Field

Now the FAA has gotten involved arguing that the City of Dallas is obligated to accommodate Delta, without telling them how in the world they can do that.

If FAA’s investigation establishes violations of the City’s sponsor obligations and related Federal law, FAA may issue a determination that the City is in noncompliance with its Federal grant obligations in its operation of DAL [Dallas Love Field]…

As a result, the City could be found to be ineligible to receive new FAA grants and payments under existing grants until this matter is resolved.

Since the FAA investigation will go beyond the federal court’s issuing of a ruling in the matter, it’s more or less irrelevant. If a federal judge rules that Delta gets to keep using one gate, the matter will be moot as Dallas won’t have denied Delta the ability to serve the airport. And if a federal judge rules that Delta doesn’t have the right to continue to squat on the gate that United leased to Southwest, then the FAA’s argument that it does will be superceded.

It’s just more pressure that Delta has managed to exert through its lobbyists.

Airline Cronyism Created This Mess

The way we got here in the first place is an exercise in how US airlines use government power to limit competition.

When Dallas Fort-Worth Airport was constructed, the existing Love Field tenants agreed to move there and abandon commercial service from the old airport that was closer to downtown Dallas. But Southwest Airlines wasn’t an existing Love Field tenant and made no such agreement to abandon Love Field.

Southwest’s business model was intra-Texas flying, and dependent on making flying more efficient than driving. So a close-in airport was needed. And they weren’t subject to Civil Aeronautics Board regulation since they only flew intra-state.

Incumbent airlines sued to stop Southwest from taking off. Eventually Southwest prevailed, but was cordoned off by House Speaker Jim Wright (D-American Airlines) and the Wright Amendment which limited flying from that airport using aircraft with more than 56 seats to Texas, Louisiana, Arkansas, Oklahoma, and New Mexico.

After Southwest expanded beyond Texas (post-deregulation), passengers could book a ticket from Love Field to one of these four other states and from there — on a separate ticket and without through-checking of baggage — to wherever they wished. But Southwest couldn’t sell tickets beyond the four states.

In 1997 the list of allowable states was extended to Alabama, Kansas, and Mississippi. In 2005 Missouri was added.

Current Airbus North America chairman and former FAA Administrator T. Allen McArtor founded Legend Airlines in 2000 which bypassed the Wright Amendment by offering all business class service on 56-seat DC9s to Los Angeles, New York, Las Vegas, and DC. They were out of business by 2001, in part collapsing under mounting legal fees.

In 2006 legislation was passed to eliminate restrictions on where an airline could fly from the airport starting in late 2014. However, the law limited the number of gates the airport could have, reducing the maximum from 32 to 20.

That was the tradeoff – get rid of the silly distance restrictions, but reduce the amount of service possible from the airport, in order to limit competition. That was a compromise that got buy in from both Southwest Airlines (because they’d become a virtual monopoly at Love) and American (because they wouldn’t have as many flights to compete against from the airport that’s less convenient to many residents).

The Solution is More Gates, Not Redistributing Gates

It seems clear to me that:

  • The federal government shouldn’t have insisted that American give up its Love Field gates, since transferring those didn’t increase competition. It couldn’t, since the number of gates were capped. There were 3 carriers serving the airport before. At most at the end of this there could be 3 carriers serving the airport, and possibly only 2. That was a silly tax to extract from the merger.

  • There’s demand for more service at Dallas Love Field than 20 gates can support. The legal limit on service from the airport should be lifted. It’s a protectionist measure that benefits incumbent carriers at the airport (less competition for Southwest) and that benefits American Airlines (since it limits service at Love Field which can compete with their major Dallas Fort-Worth operation).

Ultimately a judge will determine the outcome of the current suit (although the judge’s ruling may well be appealed). But we’re only in this mess because the airport was legally limited in the service it could permit. They actually reduced the number of gates to limit competition, is anyone surprised that there aren’t enough gates to go around? That was the entire point of the exercise.

So I began this post by blaming Congress, an equal share of the blame has to be placed at the feet of the airlines themselves who lobbied for this state of affairs — and now don’t like the pickle they’re in.

It’s another reason I have so little sympathy when United, Delta, and American complain that the big Middle Eastern carriers use the levers of government to enhance their business. I’d be more sympathetic if that wasn’t exactly what the US airlines do all the time.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Gary, Kudos for having the courage to call it like it is. This is Crony Capitalism at its best. The problem here is that none of the Airlines will push for this change to increase the number of gates – that hurts them. Even the local newspaper (the DMN) has not been bold enough to challenge this status quo. Well done.

  2. Excellent article, thanks Gary.
    One somewhat defensible factor that partial explains the behavior of some local governments is defending the value of their investments. I.e., if the State or City invests in a larger airport located in a less convenient location, it makes sense that they would somewhat artificially limit competition to avoid getting stuck with a money-losing asset.
    LGA-JFK is a very different dynamic (you covered it in the past), similar situation is Linate-MXP in Milan.

  3. This may be a simplistic question, by one not very knowledgeable in this field, but
    is it not possible to share gates, as done in Mexico City? When flying out of MEX, one doesn’t know what the gate will be until about 30 minutes before boarding.

  4. I’m not expert on Love Field but I’ve flown there a time or two back when Southwest was actually cheap. I’ve also seen the 1992 movie Love Field 🙂 I think your right on with the increase in gates. There is demand there and since the Wright Amendment ended it justifies more gates not less.

    I like drama like the Delta-Alaska soap opera at SEA. So some possible suggestions…
    1. Hard Stands with buses instead of gates at Love Field for Delta. That would be fun 🙂
    2. Delta starts a new route from Love to DFW just to upset AA. That would also be fun 🙂
    3. American starts actually using gates at Love just to make Delta upset. That would also be fun 🙂
    ;4. Dallas renames Love Field for Rodney King…wait for it….”Can’t we all just get along ?” Also fun.

  5. It seems to me another problem is that the original DAL tenants relocated to DFW only did so because *everybody* agreed to do so–they wouldn’t have done so otherwise. It does seem unfair now to let SWA swoop in and monopolize all the gates.

  6. @Justin that was litigated in the 1970s. but what’s unfair then is to limit the gates to basically what southwest has (90% of the gates), if they want to go serve love they should be able to.

  7. Ditto Masked Poster, surely they should assign slots rather than gates. Isn’t that how most of the rest of the world (certainly Europe) works? Then you have true capacity and optimised utilisation of gates, coverage of irrops on stand etc…

  8. What is the definition of a “gate” at Love or to the Feds? Surely there are bus gates at IST, FRA, or PEK that move many flights per hour through one “gate” (doorway to the bus). In the USA we tend to equate gates with jetbridges, but there are alternatives.

  9. There is two other parties that don’t want additional gates or flights at DAL: the cities of Highland Park and University Park (and their millionaire citizens).

  10. Gary Leff is wrong when he states, “Since the FAA investigation will go beyond the federal court’s issuing of a ruling in the matter, it’s more or less irrelevant.”

    1. It is unlikely that the judge will rule that the FAA cannot make its investigation. The investigation type the FAA is making is not unusual and has been litigated in court before. To make a ruling that hinders the FAA to make these kinds of investigations is without precedent and very likely to be overturned in appeal. Judge Kinkeade does not seem to be a judge that will tempt such fates.

    2. Assuming Judge Kinkeade does rule that the FAA cannot make an investigation. The result is worse. The city will be unable to qualify for AIP funds in the future since it is unable to demonstrate it can meet the Obligation Assurances it needs to make to receive these funds.

    The issue present goes beyond Delta and Southwest. It begins as contract law. The FAA is clear on the requirements to receive AIP funds. Airports are expected to comply however this is not regulatory compliance but contractual. The FAA does not monitor airports for compliance. Airport’s can ask the FAA about compliance issues to which the FAA will send Guidance Letter as a reply. This is a general statement and not one made for the airport in specific.

    If an issue is presented to the FAA that appears to have an impact on the compliance the FAA will not become immediately involved. Instead it will encourage the parties to resolve the issue and for the AIP recipient come into compliance if it not already so. A formal investigation is serious in that it is not begun unless there is valid concern that compliance is not being met. Not every investigation results in the finding of non-compliance.

    It also should be noted that WARA (based upon court rulings for the original Wright Amendment) maintains the FAA is interpreter the law. That indicates their interpretation would stand unless that interpretation is overturned. The Justice Department would need to sue if it felt the FAA was not complying with WARA.

    At this point it does APPEAR the City of Dallas have violated several provisions they agreed to as apart of the AIP funding. The apparent violations include the maintenance of documentations required, lease management, and competition management. The disturbing facts is that the city has failed in all these areas but there is no reason they should have. The FAA’s web site has dozens of documents that clearly show what the city should have been doing but never did.

    This is why the city wants to get a ruling that would halt the investigation. The city is playing this very badly and being very short sighted. If the judge does halt the investigation the city will not be able to qualify future AIP funding and very likely it will not receive the remaining $31 million for the new terminal. The FAA does not need an investigation to determine the AIP terms are not being met, in fact the FAA investigation process is apart of the AIP. If the city has the investigation halted they are clearly in violation of the AIP grant conditions and cannot qualify for further funds. The City of Dallas has received more than $80 million in AIP funds over the last 10 years and should be prepared to go without this kind of funding in the future, not if it looses but if it prevails.

  11. They City isn’t limiting competition.

    * Federal law limiting the number of gates is
    * The DOJ settlement with American, that took away gates Delta was using and gave them to Virgin America is.

    The city’s hands are tied by federal law and federal actions.

    The solution here is to allow for more competition. There used to be more gates at Dallas Love Field. Allowing those gates means the airlines that wish to service the airport could do so.

  12. The 5-party agreement executed between the City of Dallas, the City of Fort Worth, the DFW International Airport Board, Southwest Airlines, and American Airlines needs to be renegotiated. The status over 4 of the 20 gates at Dallas Love Field is in limbo since American Airlines was forced to relinquish use of its two gates as a result of the American-US Airways Merger, since United Airlines decided to discontinue service out of Dallas Love Field, and since Alaska Airlines might decide to move Virgin America service back to DFW Airport. In addition, the renegotiated contract should allow Dallas Love Field to be expanded beyond the current 20-gate limit if Congress changes or repeals the 20-gate limit provided for in the Wright Amendment Reform Act of 2006. Furthermore, the renegotiated contract should make reasonable accommodations for Southwest Airlines, Delta Air Lines, and any other carrier that intends to initiate service from Dallas Love Field.

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