June 15, 2006

Wrong on the Wright Amendment

Colleen Conway-Welch, dean of the School of Nursing at Vanderbilt University Medical Center, had an op-ed in the Wednesday Tennessean, headlined "Southwest's Dallas setup inconvenient for Nashville travelers", arguing against repeal of the Wright Amendment, which restricts the cities Southwest Airline can service non-stop from Dallas's Love Field. The Wright Amendment, as I wrote a few days ago, results in Nashvillians having to pay high fares to travel to Dallas on American Airlines and other carriers that use Dallas-Fort Worth International Airport.

Welch's argument falls apart for a number of reasons. Here's an excerpt of her op-ed:

I fly through Dallas frequently and have heard many opinions on whether the Dallas area should continue to maintain two airports (Love Field and Dallas Fort Worth Airport, or DFW) that are nine miles apart. Since the resolution of the issue will likely have an impact on my travel plans (and those of other Nashvillians), for better or for worse, I decided to learn more.

... If the Wright amendment is repealed, Southwest could fly from Love Field directly to all of its other cities around the country.

To remain competitive, other airlines would be forced to split their flights between Love Field and DFW, forcing all of them to serve two airports nine miles apart. They would need to reduce and/or eliminate many connecting flights offered out of the DFW hub and move them to Love Field to protect their market share in other markets served by Southwest.

This would greatly inconvenience the Nashville-originating passengers who today connect through DFW to many other domestic and international connections. It does not make sense to repeal the Wright amendment and force other airlines to use the more limited services at Love Field when there is ample room for Southwest at DFW — but Southwest would have to compete directly against those other airlines at DFW.

Choice and competition undergird the American system. If the Wright amendment is repealed, Southwest would continue to dominate Love Field and the other airlines would need to cobble together an expensive, duplicative system to use both air fields. This certainly is not cost-effective. It seems obvious that the Wright amendment should remain in effect.

If Southwest wants to fly to more cities and states from the Dallas area, they should fly from DFW, keep the "playing field" level and allow Nashvillians more and better connections on a variety of carriers out of the DFW airport, including Southwest.

Beyond that, Welch seems to argue that the a "level playing field" is required for there to be fair competition between Southwest and the airlines that use DFW. But let's apply her reasoning to the local retail scene. Some retailers locate in malls, which are more expensive per square foot than your average strip mall. That means that competing stores selling identical merchandse are not on a level playing field. Yet Welch isn't calling for regulatory changes to force all retailers into the mall, to level the playing field.

Welch's op-ed also implies that it would be better for a vast, sprawling, major metropolitan area like Dallas-Fort Worth to have just one airport . But she isn't calling for the New York area to shutter three of its four airports - JFK, LaGuardia, Newark and Long Island/Islip. Houston has two airports - Bush Intercontinental and Houston-Hobby. Which would Welch suggest be shut down? The Los Angeles area has four airports - LAX, Orange County, Ontario and Burbank. The San Francisco Bay area has three - San Francisco, Oakland and San Jose. Again, which should be shut down in the name of forcing all air carriers to compete at one location?

Southwest's Love Field location is "inconvenient" for Nashville travelers only because of the Wright Amendment, which prohibits Southwest from flying non-stop from Nashville to Love Field. Repeal the Wright Amendment and you'll see non-stop service from Nashville to Love Field on Southwest, at lower fares. You'll also see American Airlines, which dominates DFW, respond by reducing fares.

And you might see American add flights from Dallas to Love Field. Welch's argument that such service would be "expensive" and "duplicative" simply don't hold water as airlines often fly to multiple airports in other cities. Southwest, for example, serves three of the four Los Angeles-area airports.

The Wright Amendment is anti-competitive and costs the American flying public some $4 billion annually in higher fares. Repealing it is the route to true competition - and lower fares.

For more on the Wright Amendment, and why it is time to repeal it, click here.

A final thought: I am mystified as to why The Tennessean would run an op-ed on the Wright Amendment by a nursing school dean rather than someone with actual expertise on the topic. Welch's main expertise seems to be that she "flies through Dallas frequently." Well, millions of people do that, and it doesn't make them an expert on the Wright Amendment.

Perhaps there's another explanation for her seemingly random interest in the Wright Amendment. American Airlines is the airline whose bottom line is most directly threatened by the repeal of the Wright Amendment. Welch and her husband, wealthy Nashville businessman and well-known Republican fund-raiser Ted Welch, are friends with Nashville businessman Joe M. Rodgers, a prominent Republican donor and activist who also is a member of American Airlines' board of directors.

UPDATE: Southwest and American Airlines have agreed on a compromise regarding the future of Love Field. It includes a phasing out of the Wright Amendment, and continued service at Love Field. Under the terms of the agreement - if it is enacted via legislation by Congress - American would get two gates at Love Field. Clearly, American Airlines doesn't intend to move a hefty amount of "expensive, duplicative" service to Love Field.

The agreement also will allow Southwest to sell single tickets for connecting flights out of Dallas, instead of continuing to force customers to buy two tickets - one for each flight.

This is great news as it will begin to put downward pressure on fares for Nashvillians headed to Dallas.

More here.