Open skies: should the Wright Amendment be repealed?

Mississippi Business Journal, The, Oct 31, 2005 by Jeter, Lynne

Congress is mulling options to repeal a 1979 federal law known as the Wright Amendment that makes it illegal to fly or advertise flights from Love Field to points beyond the four states surrounding Texas, plus Alabama, Mississippi and Kansas.

Two bills are moving through Congress that could lift the Wright Amendment restrictions: The Right to Fly Act (H.R. 2646), introduced in the House by Congressmen Jeb Hensarling and Sam Johnson with 41 cosponsors, and the American Right to Fly Act (S. 1424), introduced by Sen. John Ensign with eight cosponsors. Congressman Bennie Thompson (D-2nd District) is the sole Mississippi supporter on record. Sen. Trent Lott, who voted against the Wright Amendment in the late 1970s, "has always been philosophically opposed to it," said Lott's spokesperson Lee Youngblood.

"We've had to go to every House and Senate member and lay our case before them," said Ed Stewart, spokesperson for Southwest Airlines, the Love Field-based low-cost, no-frills, no-reserved-seats airline that serves 60 cities in 31 states and would benefit the most from legislation lifting the antiquated restrictions. "Fortunately, it usually doesn't take long for most members of Congress to realize the Wright Amendment makes absolutely no economic sense, born a year after airline deregulation. I understand why American Airlines has to fight it. 'nat's the gravy train for them."

American Airlines, based at the Dallas-Ft. Worth (DFW) airport, has long fought the repeal. Earlier this month, the world's leading airline, which has a fleet of about 740 jets serving 150 destinations from DFW and hubs in Chicago, Miami and San Juan, Puerto Rico, revealed the impact of the potential repeal, according to a commissioned study.

"You don't need Love Field to get lower fares and more service," said American Airlines spokesperson Tim Wagner. "DFW has 22 open gates, offering $22 million to any carrier, including Southwest, to bring in flights. It doesn't take opening up an unnecessary second airport to get airline competition. For us, the most complicated issue to explain is that once we have a second airport to compete with DFW, we're going to have to move flights over there. Love Field is closer to downtown, and closer to some 60%-plus of our best customers. We can't let them fly on somebody else. We have to make the better of two bad choices and split our operations."

Six low-cost carriers already compete at DFW, said Wagner.

"Southwest could do the same thing," he said. "They do it in Los Angeles, Philadelphia and Pittsburgh. They don't need Love Field opened up, where they have 21 of 26 usable gates ... any other airline coming in would have a difficult time getting facilities needed to compete. Southwest can take their best shot at us at DFW."

Moving Southwest Airlines to DFW "is not on our consideration list," insisted Stewart. "There's no way at all it will work for us."

Mississippians would probably benefit by allowing Southwest to expand its services, especially because Northwest and Delta have filed for chapter 13 protection.

"It would be a boost in terms of opening up the country and offering more opportunities for Mississippi travelers, pure and simple," said Stewart, whose family hails from Holmes County. "It would be a winwin for the folks in Mississippi and the airline."

Wagner disagrees. "Small and midsize towns would definitely suffer," he said. "For example, of the people who would get on flights from Gulfport to DFW, very few would be coming to stay at DFW, probably only five of 50 passengers. The other 45 would split up and get on connecting flights to maybe 45 different cities. That's how a hub-and-spoke system works, like a funnel instead of a tube. Small and midsize cities must have a funnel to concentrate traffic. When you take away the traffic, it upsets that precarious balance and diminishes the small margin of profitability. It's like pulling a thread on a sweater."

Mississippi is not at risk for losing flights if the amendment is repealed, said Dirk Vanderleest, executive director of the Jackson Municipal Airport Authority. "Short term, it would open up the market into Dallas," he said. "Long term, it would increase connectivity and opportunity."

Bill Bryan, owner of World Travel Consultants, said he's very much in favor of open skies "and letting the chips fall where they may."

"I'm a Southwest fan because they've shown other airlines how to make money," he said. "The rest of them haven't. The whole idea behind the amendment was to squash them, but they're one of the most profitable airlines in the country."

Southwest has reported 32 consecutive profitable years of business. Of the 54 markets in which Southwest and American Airlines directly compete, Southwest has a larger market share in 44 markets.

"We're the first to admit that Southwest is a tough competitor and would take some passengers away from us," said Wagner. "It doesn't take giving them this legislative advantage at Love Field to do that."