Delta certainly has attracted its share of drama recently, from its very public scuffle with the Middle Eastern carriers, to the so-called “Battle for Seattle,” where Delta is trying to forge a hub presence in the Northwest at the expense of its former ally, Alaska Airlines.
Now there’s some very juicy drama involving Delta out of Dallas Love Field. Get your popcorn!
A Love/Hate Relationship
For decades, Dallas’ in-city airport, Love Field, had been operationally restrained by a combination of regional politics and American Airlines lobbyists. Until October 2014, flights out of Love Field could only serve destinations in Texas and immediately neighboring states, limiting the usefulness of the airport for all but extra-short-haul trips.
With the full repeal of governmental restrictions (the Wright Amendment) in October, however, Love Field suddenly became very hot property, given that DFW Airport is much, much further from the Dallas city center.
Under the Wright Amendment, Southwest Airlines had built itself an efficient and powerful fortress hub at Love. With the repeal, Dallas-based Southwest saw Love as an even bigger boon: now it could potentially use its home city as a hub for flights to a huge array of domestic destinations.
Southwest claims the better part of 18 of the 20 gates at Love Field. The other 2 had initially been leased by American Airlines. Even though Delta had actually been using those two American gates for years through a sublease agreement with American Airlines, the Department of Justice forced American to give up its right to the gates (and, by extension, Delta’s) to Virgin America following the Department of Justice’s intervention after American’s merger with US Airways. Delta had vied for these two gates, but its interest was denied by the DOJ because Delta, unlike Virgin America, was not a “low cost carrier.”
Here’s where the drama heats up.
Southwest actually has a primary lease on only 16 of the 20 gates at Love. United (from its Continental days) had 2 gates. United entered into a gate-sharing agreement with Delta to share the use of one gate for 5 daily nonstops between Dallas-Love and Atlanta. That agreement expires July 6, 2015.
However, once United stopped actually flying to and from Love Field, Southwest Airlines petitioned the City of Dallas (which owns Love Field) to let Southwest sublease the United gates. Remarkably (or, cynically, perhaps unremarkably), the City of Dallas agreed without offering the gates to any other carrier.
So, until July 6, 2015 — the United-Delta agreement controlling the shared use of the gate even with Southwest being the operator — Delta and Southwest share one gate at Love Field.
And July 6 is coming up quickly. Southwest isn’t interested in the extra competition, and has demanded $30 million from Delta for the right to share a gate at Love Field for the Atlanta-Dallas flights.
Delta, meanwhile, has gone to the Department of Transportation and gotten a letter dated June 15, 2015 which instructs the City of Dallas that it has a “legal obligation” to reasonably accommodate Delta at Love Field.
Delta has also notified the City of Dallas that it will bring a lawsuit to keep its gates at Love.
As the drama unfurls, Delta has announced its intentions to keep operating at Love Field, and is selling tickets to and from Atlanta for dates on and after July 7.
Meanwhile, today Southwest Airlines has filed a lawsuit against Delta seeking an injunction, accusing Delta of trespassing on Southwest’s property.
To top it off, the City of Dallas has filed a lawsuit naming Delta, Southwest and the Federal Government in an attempt to have a court figure out exactly what the City’s obligations are respecting Delta and Southwest.
Bottom Line
Delta loves a good war, doesn’t it? Actually, where in the past Delta’s battles could have arguably painted the carrier as a bit of a bully, here it appears Delta is the David against the longstanding Dallas/Southwest Goliath.
There’s no denying that Southwest Airlines has a very cozy relationship with the City of Dallas, where the airline is headquartered. It seems awfully fishy to me that Southwest could legally control 18 of the 20 gates at Love Field with no bidding or appeals process available to other airlines.
It’s also rather perverse that a metropolitan area with two airports is essentially shackled to two airlines (to be fair, Virgin America uses Love as a “focus airport,” but there’s only so much focus you can offer with 2 gates). Texas seems to be one of those states that claims to love a free market, so you’d think the authorities would be willing to provide competitors an opportunity to give American and Southwest a run for their money.
Legally, the contract giving Delta shared access to the one gate at Love Field expires July 6, and there may be nothing Delta can do to demand access beyond getting the Feds involved. And Delta may be out of luck. However, if the DOJ and DOT do intervene and see Dallas’ and Southwest’s actions in violation of federal law, then there may just be hope for competition in Dallas yet.
The post Love And War: Delta’s New Texas-Sized Battle appeared first on One Mile at a Time.