What Free Love Means For Dallas Airfares

Restrictions are being lifted, but what will become of ticket prices remains unclear.

With the end of the Wright Amendment finally here, Southwest Airlines has been telling us for months that, “All we need is Love.” 

But for the past two decades, the better jingle might have been, “What’s Love got to do with it?”

While cities across the country benefited from the “Southwest Effect” as the Dallas-based airline spread its bargain fares from coast to coast, we were stuck in a time warp. Despite being home to the nation’s top discount airline, we’ve long paid higher-than-average fares out of Dallas/Fort Worth International Airport to faraway places like Florida and the Northeast, thanks to the Wright Amendment’s stranglehold on competition with American Airlines’ fortress hub at DFW Airport. (We did get those flights every half-hour to Houston, though.)

So now that Southwest can fly to any U.S. city directly from Dallas, it’s our turn to feel the love, right? We’ll see. While there certainly will be some great fares available for a while, there are signs that the Southwest Effect ain’t what it used to be.

Rick Seaney, co-founder and CEO of the Dallas-based website farecompare.com, predicts a “Southwest Mini-Effect” at Love Field.

Fares will drop significantly for business travelers, particularly on routes like Los Angeles, where Southwest will duke it out with Virgin America and American for customers, he says, but the deals won’t last beyond a few months. “We missed it,” he says, referring to the days when Southwest would touch off a traveling frenzy with cut-rate fares. “We’re now going to get a taste of it.” 

A lot has changed since 2006, when the mayors of Dallas and Fort Worth brokered a deal to wind down the 1979 law written to protect a fledgling DFW Airport by prohibiting direct flights out of Love beyond a handful of states. Major airlines have filed bankruptcy and merged, most recently American and US Airways, slashing costs and trimming flights. They now have more leverage to control fares.

Meanwhile, Southwest has gotten bigger, having merged with AirTran, and its costs reflect it. Since 2009, operating expenses per available seat mile—a standard measure of airline costs—rose from 10.29 cents to 12.60 cents. American’s, by comparison, increased from 12.22 cents to 13.50 cents, narrowing the gap with Southwest. In fact, Southwest is no longer the industry’s low-cost king. That crown now belongs to Spirit Airlines.

In a filing with the Securities and Exchange Commission earlier this year, Southwest said that it “cannot guarantee it will be able to maintain or improve upon its current level of low-cost advantage,” citing a number of factors including an aging fleet, “high and volatile” fuel costs, and union contracts due to be renegotiated.

No doubt, you’ve felt the impact. Between 2009 and 2013, average fares at Love Field have increased by 27 percent, compared with 22 percent nationwide and 13 percent at DFW, according to the U.S. Department of Transportation. Great fares now are available on fewer seats.

Southwest’s CEO Gary Kelly disputes the notion that his airline has lost its low-fare edge, saying that comparing fare increases at DFW and Love Field is apples and oranges.

“Once you factor in bag fees, change fees, and you-name-it fees from our competitors, you’re going to find that the vast majority of the time, Southwest will have the lowest fare in the market,” he tells me. “That’s a fact.”

While Southwest’s cost advantage is not what it once was, “it’s significant and it’s sustainable,” Kelly says, and he’s confident that the airline “will be able to maintain our low-cost, low-fare position.” 

He acknowledges that Southwest has matured into a different airline. Once a regional, short-hop carrier, it’s now focused on long-haul flying, including routes to the Caribbean picked up from AirTran. Terminals are being expanded in Houston and Fort Lauderdale to accommodate international growth. 

Once known for serving small airports, Southwest now flies into some of the  largest, including New York’s LaGuardia Airport, where it picked up gates American surrendered to win regulatory approval for its merger.  But Kelly insists that Southwest’s culture is firmly intact. As if to prove it, the airline recently unveiled a new livery that features a heart painted on the belly of its planes.

“It’s not a new Southwest,” Kelly says. “It’s an evolved Southwest.” 

The end of the Wright Amendment will be a game changer, he promises: “I think you’re going to find that the Southwest Effect is still very much alive and well.” Let’s hope he’s right. It will take more than a logo to keep our hearts.  

Newsletter

Keep me up to date on the latest happenings and all that D Magazine has to offer.

Comments