Just over five months ago, Dallas residents and the City Council were surprised to learn that the city of Dallas had secretly commissioned a study that supported city staff’s determination that the U.S. Department of Justice Antitrust Division had erred when it determined that Virgin America, rather than Southwest Airlines, should receive the two American Airlines gates that American had determined it no longer needed.
Cheered on by the city of Fort Worth, here and here, Dallas city staff proceeded to throw all sorts of roadblocks up against what should have been a straightforward lease approval. The process quickly devolved into a national farce, possibly because the idea that allowing one airline to control 90 percent of the gates at an airport would serve competitive interests is ridiculous on its face. Council Member Vonciel Jones Hill featured prominently, arguing that the city (she?) was in a better position than both the contracting parties (American Airlines and Virgin America) and the Department of Justice to determine what was best for the citizenry. Finally, after weeks of opaque, behind-the-scenes machinations at City Hall (during which time Virgin was compelled to launch a high-cost public relations campaign, and Sir Richard Branson was compelled to interrupt his vacation for a trip to Dallas to beg for the gates as part of an effort that directed critical international spotlight to what appeared to be crony capitalism at work), Virgin was finally given the green light by city staff to actually take possession of the gates that appeared to have been rightfully its own from the outset.
Fast forward to this past week: once again, residents and elected officials found themselves surprised to learn that city staff had taken action to thwart an airline’s ability to operate at Love Field. Delta Air Lines has just been given two weeks’ notice to vacate Love Field … for some reason. Aviation director Mark Duebner’s stated rationale for the abrupt termination: “based on the scheduled recently provided … the city has acknowledged that Delta cannot be accommodated at Dallas Love Field after the expiration of the current sublease with American Airlines,” didn’t stand up to scrutiny. United Airlines was still squatting on two gates, from which it presently operates a grand total of three to seven flights per day.
Further digging by Robert “Fingers of Fury” Wilonsky turned up this explantion: “Delta Air Lines is being forced out of Dallas Love Field because Southwest Airlines is going to use one of United Airlines’ two gates at the airport, and because United has told the city it will increase its service in January. That’s according to a memo Ryan Evans, the city’s first assistant city manager, sent to Mayor Mike Rawlings and the Dallas City Council Tuesday morning — one day after (emphasis added) the city’s aviation director gave Delta two weeks’ notice at the city-owned airport.” More unfavorable national press converge ensued. Hmmm … where do I start?
First of all, two weeks’ notice … seriously? According to Delta, they have already sold about 16,000 tickets between now and year end. Moreover, they had planned to upgrade the Atlanta service to new, 117-passenger B717s after the Wright Amendment modification went into effect, and they started selling tickets for these new flights on July 3. Think about the massive, needless inconvenience and expense to thousands of Dallas area residents and visitors. What about the cost to Delta of re-accommodating these passengers? How many employees and contract workers does Delta employ at Love Field, and what happens to them? Even if one agrees with staff’s secret decision to kick Delta out, why was it done so abruptly?
Second, what happens to the two underutilized gates being split between Southwest and United after Delta is forced out? Best I can tell, Southwest would need several months (not two weeks) to add new flights to its schedule. So, it sounds like their gate will be sitting empty. Similarly, United has announced plans to increase service from 3-5 flights per day to 12 flights per day, but that doesn’t happen until January, and United plans to continue to service the market with cramped 50-seat regional jets. Most bizarrely, however, United’s proposed schedule shows each of these commuter jets parking at Love Field for an hour and a half after each arrival, in contrast with their current 30 minute turns. This looks like a clear example of gate squatting.
Third, after all the outcry in April, how did city staff determine that it was in the best interest to increase Southwest’s share of Love Field gates to 85 percent while simultaneously kicking one of the world’s largest airlines out in the process and eliminating nonstop access to Delta’s largest hub in the process? Why was the decision made in secret, without consultation with the Department of Justice or City Council? This is especially important considering that the city has previously told the FAA that it would continue to accommodate Delta following completion of the terminal renovation. One interesting angle that hasn’t been covered is that much of the Southwest passenger traffic would likely consist of connecting passengers, which isn’t of any significant incremental benefit to the Dallas economy. In contrast, all of Delta’s traffic would be locally originating and departing passengers.
Finally, just as during the Virgin America controversy, the the city of Fort Worth lurks in the background, watching closely.
So, for those keeping score, the city of Dallas staff, without any advance notice or discussion with elected officials or the general public:
1) is kicking Delta out of Love Field after telling the Feds it would do the opposite;
2) did it with only two weeks’ notice, subjecting 16,000 travelers and Delta to significant needless expense and inconvenience and putting the jobs of unknown numbers of employees in jeopardy;
3) apparently believes that increasing Southwest market share to 85 percent is preferable to maintaining access to the largest hub in the world of one of the world’s largest airlines (Delta);
4) is valuing Southwest connecting passenger traffic over local traffic;
5) is not making any effort to address what appears to be “gate-squatting” by United for several hours per day, when they could either require normal 30-minute aircraft turns or pushing the planes off the gate to free them up for use by others;
6) doesn’t seem to be giving any consideration to the fact that having one legacy carrier (Delta) competing with another legacy carrier (United) might actually be of benefit to consumers; and
7) is reneging on its prior representations to Delta and the federal government that it would accommodate Delta at the new terminal, placing the city at risk of being sued for massive damages.
What have I missed? Really enjoying the new era of transparency and accountability promised by A.C. Gonzalez.
Here are some final questions to ponder: if the city of Dallas behaves in such a manner towards one of the largest companies in the world, how does it likely behave on a day-to-day basis towards smaller companies attempting to do business here — companies that attempt to compete for business against those with stronger guanxi? What is the cumulative harm being done to the citizens of Dallas as a result of other secret decisions being made by city staff on other issues that never rise to a level that would attract media scrutiny and public outcry on an individual basis?
