Lou Nelson

08/11/05 History Lesson about the Wright Amendment and Love Field

(originally written: 10/21/01)

As I get older, I rarely see things as black and white, but rather as kind of a murky gray. While I wouldn’t wish this indecisiveness on anyone, I would suggest that research and experience in the field tends to do that to one.

To be specific, the Wright Amendment was a rather poor cure for a bad problem that started much earlier in your Texas skies saga. The political battles that created the DFW Regional Airport (as it was called back then) were precipitated by a Federal Aviation Department that was tired of putting federal monies into “carrier” airports at Meacham (later Greater Southwest Airport) and Dallas Love Field. They told Dallas and Fort Worth that they would have to build a single airport for certificated air carriers and that was that.

The Dallas/Fort Worth Regional Airport Board was created by the Cities, and Revenue Bonds were sold to pay for this massive undertaking. The Bonds were the financial underpinning that made everything possible and were guaranteed by a Use Agreement that was signed by the airlines that said they would debt serve these bonds through the rates, fees, and charges that they would pay.

As I remember it, the original signatories, were American, Braniff, Continental, Delta, Texas International, Eastern, Frontier and Ozark, and all were brought kicking and screaming to the table. None wanted to sign up and would’ve preferred to stay at the much cheaper facility and attractive market at Love Field instead of moving to the middle of the prairie. They were told that all had to move or face lawsuits from the others including the Cities if they defaulted.

The DFW Revenue Bonds had specific covenants that required all airlines serving Love Field to move to DFW.

Southwest wasn’t a party to this agreement because they didn’t exist and in fact started service at Love after the fact. They didn’t want to move to DFW for the same reasons as the others and refused to execute the agreement as had the others and couldn’t be made to enter into this nefarious conspiracy requiring them to move to DFW.

To quote from the book, “Hard Landings” by Thomas Petzinger, Jr.,

“Kelleher stared at the fatal provision in the bond issue. Then it hit him: The language specified that all “certificated” airlines had to leave Love Field. The only meaningful certificates in the legal world of the airlines were those ones handed out by the CAB, and Southwest had never gotten that piece of paper because it was never subject to CAB jurisdiction. Southwest was an airline- no point in fooling anyone there-but not a “certificated” airline. Kelleher went to the courts and once again he won.“

This was a double victory for Kelleher in that he didn’t have to move to DFW and, the other carriers did. More importantly, they couldn’t move back to Love to compete without being in default of this agreement. This gave Kelleher monopoly status at Love.

The courts fought through appeals of this interpretation as the Signatory Airlines and the City of Fort Worth sued Dallas for not closing Love to eliminate the “inequity”.

When deregulation of the airline industry hit in 1978, Kelleher decided to expand to New Orleans. Gosh, what happened to the argument that SWA wasn’t certificated for interstate travel? Again quoting from “Hard Landings”,

“Jim Wright in 1979 finally resolved to remedy the failings of the regulatory system with the fiat of legislation. Wright pushed a new law that would simply ban any airline operating from Love Field from ever flying outside Texas. There would be no deregulation for Southwest Airlines.”

After much wrangling and the help of Bob Packwood, Kelleher got the compromise of being permitted to fly to the adjoining five states and hence, the Wright Amendment.

Pretty good deal for SWA in being able to expand their services and get a series of other benefits in the process. Now, no one else could serve Love Field with anything resembling scheduled service that might connect with other service outside of the adjoining five states or with airplanes carrying more than 56 seats, which was pretty much everyone.

Kelleher had scored again, big time.

Is the Wright Amendment a good thing? No, not in my opinion. It was a bandaid on a series of inequities that Southwest in fact thrived upon.

Love Field is an aging airport that can’t be materially expanded, and DFW is the largest economic generator for the North Texas Metroplex. Both have survived, and we have all benefited mightily from it.

If you have muddled through this far, I would suggest some re-thinking needs to be done by the writer of the letter to the editor who says:

“The federal courts upheld the constitutionality of the Wright Amendment in 1990, but it’s hard to justify such thinking, except to speculate about political pressure. This law deliberately hurts Dallas consumers and forces one company to waste fuel and cause needless delays by making people jump through hoops.”

I suspect the courts took the whole “seedy” story into account, and the result was the compromise we see today. Dallas consumers benefit from direct, nonstop service to more cities domestically and internationally than any mid-American city this side of Chicago, and have Southwest’s efficiency and low fares from Love Field to boot. We’ve got a good thing going with both American, and Southwest calling Dallas/Ft. Worth home.

I am open to tangible examples of how things could be improved on a level playing field for all.

If Southwest should be able to expand and connect throughout the U.S. from Love, shouldn’t everyone? How can we expect to do this at Love Field?

The questions of DFW financial viability could’ve always been answered without Love Field closure, but by charging landing fees and terminal rentals that were compensatory for all of our regional airports (including Love Field) with all of them under the jurisdiction of a DFW Regional Airport Authority. But, that’s a subject for another day.