Friday, May 06, 2005

Wright Amendment, Wrong Time

While other single men are planning exciting weekends of oat-sowing frolic, I'm sitting here thinking about the airline industry. After all, nothing gets a girl "ready to go" like a good debate about the Wright Amendment.

One of the reasons for Southwest Airlines' continued success is its ability to pounce on growth opportunities at just the right moment. Against the backdrop of flux generated by Delta abandoning its Dallas/Fort Worth hub, Southwest has deftly decided to step up its opposition to the Wright Amendment, which currently limits the airline's interstate service from Dallas' Love Field to states adjoining Texas along with Alabama, Mississippi and Kansas.

Under this law, Southwest cannot sell you a single ticket from Love Field to Phoenix even if you're connecting in El Paso. Instead, you'd have to buy two completely separate tickets - one from Dallas to El Paso and another from El Paso to Phoenix. Upon your arrival in El Paso, you'd have to retrieve your baggage at baggage claim, go back through security and check in again before finally boarding your connecting flight. It's a stupid, anti-competitive law that outlived its usefulness as protectionism for the newly-constructed DFW Airport long ago.

Before resigning in disgrace in 1989, House majority leader Jim Wright was a lucrative waterboy for Fort Worth in its quixotic battles against being overshadowed by Dallas. The Wright Amendment restrictions became law in 1979, not coincidentally the same year American Airlines moved its headquarters from New York to Fort Worth under a tax-free bond deal. American moved in just as years of gross mismanagement and a horribly miscalculated response to deregulation conspired to drive Braniff into the ground. With Braniff's demise, Delta stepped up its DFW presence and served as a healthy counter-weight to American's growing dominance for many years. Now that Delta's hub is gone, though, American owns DFW. Despite incentives from DFW's board to fill the void, no airline is willing to risk a predatory price war with American on its home turf.

Meanwhile, Southwest is reducing frequency at Love Field because post-9/11 security procedures have cut into the time savings once realized in flying their heritage intrastate routes like Dallas-Austin. If Southwest can't grow out of Love Field, it doesn't have a whole lot of incentive for continuing to maintain its headquarters there. Although close-in airports in Washington and New York have perimeter restrictions limiting the distance of nonstop service (which is why you can't fly nonstop from Austin to National and LaGuardia), no other airport besides Love is saddled with an arcane federal regulation like the Wright Amendment.

Will growth at Love hurt the long-term viability of DFW? Highly unlikely. DFW is spread across a huge parcel of land with room to grow, while Love Field is constrained both by size and a local master use plan limiting the number of flights there. The Houston metro area, a bit less populous than the overall Metroplex, has supported two unrestricted airports for years. Moreover, a lot of the growth in the Metroplex is taking place in areas more convenient to DFW than Love. It's high time our state's largely-Republican lawmakers began acting in accordance with the market-worship dogma they normally espouse and put this amendment out to pasture.

If you're still awake, you can learn more at these websites outlining the pro-Wright and anti-Wright positions.

1 comment:

jennifer said...

Don't sell yourself short, Greg. Nothing a girl likes more than relaxing in a dimly-lit bachelor pad, grooving to a little Herb Alpert, perusing the Albertson's circular, and discussing the finer points of anti-free-market legislation. Throw in a fried pie and you will be in like Flynn!