Two Texas-based airlines will meet in a showdown in Washington today over a little-known federal law that affects service and fares for millions of travelers nationwide.
AMR Corp.'s American Airlines and Southwest Airlines Co. are sparring over a piece of legislation called the Wright Amendment, a 26-year-old law that prohibits Southwest from flying direct routes to most other states from Love Field in Dallas, its corporate headquarters. Southwest wants the law repealed to broaden its direct service. American Airlines likes the status quo because it keeps a tough competitor from stealing passengers from its hub at Dallas-Fort Worth International Airport.
The dispute comes to a head today in hearings before the Senate Aviation Subcommittee. The committee will listen to arguments from executives of both airlines and decide whether further steps are necessary to resolve the matter.
Former majority leader Jim Wright proposed the amendment, which requires Southwest flights from Love Field to remain within Texas or to go only to Louisiana, Arkansas, Oklahoma, New Mexico, Kansas, Alabama and Mississippi. Southwest flies to other states, but not directly from Love Field. And Southwest does not operate at Dallas-Fort Worth.
The amendment, passed as part of the International Air Transportation Competition Act in 1979, was intended to encourage growth at the then-fledgling Dallas-Forth Worth airport -- American's hub -- which is about 12 miles from Love Field. Southwest at the time had a much smaller presence nationwide than it does now.
Under the law, a traveler who wants to fly into Love Field from Baltimore-Washington International Thurgood Marshall Airport, for example, must purchase a ticket to an airport in one of the permissible states, such as the airport in Birmingham, Ala. The passenger would need to purchase a second ticket to get from Birmingham to Love Field. The passenger would have to go through security in Birmingham to board the flight for Love Field. On typical connecting flights, passengers do not need a second security check because they hold a single ticket. Southwest is not allowed to market or sell direct or connecting flights into Love Field from any destinations outside the designated states. Herbert D. Kelleher, Southwest's co-founder and chairman, said repealing the law would result in about 3.7 million more passengers a year flying into both Dallas-area airports and would allow passengers to save about $1.8 billion in a year on flights into Dallas or through Dallas to another destination.
Chain smoking Merit Ultima cigarettes in a windowless conference room at Southwest's downtown Washington office, Kelleher, 74, yesterday began finalizing his speech before lawmakers. It will be his first appearance at a congressional hearing in nearly a decade.
"Wright is wrong. It's time to repeal it," he said.
Kelleher said American is resisting a repeal because it does not want to have to match Southwest's low fares into Dallas.
Gerard J. Arpey, American's chairman and chief executive, is also scheduled to testify along with Dallas area airport consultants and executives.
American says if the law is repealed, it could force the airline to cut service out of Dallas-Fort Worth and shift flights to Love Field in effort to remain competitive with Southwest. The change could force the airline to end service to smaller communities where Southwest does not operate, says American spokesman Tim Wagner. "Rather than abdicate those passengers to another airline we will go over there [to Love Field] to compete and split our operation and reduce our hub," Wagner said.