LUV IS CHEAP

While I was getting hosed last night by Channel 5, our buddies at Channel 11 were broadcasting real news: Love Field hasn’t been charging enough for landing fees, and it’s losing money. In effect, the City of Dallas has been subsidizing Southwest Airlines. And landing fees might soon be raised. Said Laura Miller:

“I’d be surprised if any council member here knew we were running Love at a deficit.”

Really? They must not read D Magazine. In his November publisher’s note, Wick reported that Love loses money. See for yourself:

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Why fight over the Wright Amendment? Instead, let DFW Airport take over Love Field.

By Wick Allison

Is Wright wrong, as Southwest Airlines’ bus signs tell us? Congress has declared a temporary truce in the battle–two hurricanes having swept aside its agenda–so it’s a good time to wonder how senators from places like Nevada and Alabama ended up determining the future of flight in North Texas. Especially because the solution has been in our hands all along.

Just how simple that solution is never occurred to me until I read a letter to the editor from one Ryan McCabe of Plano in the Dallas Morning News a year ago. McCabe wondered aloud why nobody had thought to do the logical thing, which is for DFW Airport to buy Love Field.

In the months since, I’ve noodled and doodled, and I’ll be damned if it doesn’t make sense.

In the fight over Wright, two public interests collide. The first is the need to protect our huge public investment in DFW Airport, which has been our single biggest economic stimulus. The second public interest is the need to foster competition, so that our citizens are not stuck with monopolistic airfares.

McCabe’s solution elegantly resolves this conflict of interests. The problem with undoing Wright and opening Love Field to long-haul flights is that American Airlines will need to move some of its schedule to Love because Southwest will immediately start flying to American’s destinations. When American moves longer flights to Love, DFW will also lose connecting flights that used to tie into those. So DFW, which has plenty of gate space, loses flights to Love, which has limited gate space. That’s a bad allocation of resources.

But if DFW owns Love Field, it can manage that allocation. If Love is so attractive to an airline that it wants to stay there (Southwest) or to move there (American), DFW can handle the consequences with a little free enterprise pricing of its own. Gate fee pricing at Love could be used to offset gate fee losses at DFW. Pricing policies might even encourage Southwest to take a few of those available gates at DFW.

The solution is so sensible that every other major market in America uses it. Dallas is the only city where two or more airports are not owned by the same public entity.

To my mind, it’s an embarrassment that we haven’t already seen the economies of scale that would flow from operating two airports only 12 miles apart. Houston has done it. Chicago has. LA has. New York has, even though one of its airports, Newark, is in a different state.

Not only is the idea sensible from the financial and operations standpoints, it won’t cost Dallas a dime. Dallas loses money on Love Field. The city should be begging DFW to take Love Field off its hands.

On top of that, Dallas owns 63 percent of DFW Airport and controls seven out of 11 seats on the DFW Airport Board. So Dallas controls the future of DFW and will therefore still control operations at Love Field.

What are the negatives? One public administrator I talked to wondered how to value Love Field in a purchase. Instead of a purchase, then, DFW could lease Love for 99 years at $1 a year. After all, public aviation isn’t 99 years old, and nobody can say it will exist 99 years from now. The citizens of Dallas can retain ownership of the land, and in 99 years it might make a better park or hotel development or spaceport.

What else stands in the way? As far as I can tell, not much. Bonds would need to be cross-collateralized. The FAA would need to approve. DFW Airport would need to agree to follow the city’s Master Plan. The city and DFW would need to discuss what to do with the other aviation functions the city now handles. Congress would need formally to toss the Wright Amendment in the trash.

But those are easy. The key thing is for the Dallas City Council and the DFW Airport Board to decide to do it. Then their managers can sit down behind closed doors and hash out the details. If my private conversations with executives in both organizations are any indication, the deal could be done by lunch.

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