Perimeter Rules: why nationally imposed airline control does not fly in Dallas

Deregulation of the airline industry in 1978 marked the beginning of an era of market competition for commercial aviation. Ever since, airlines have been competing fiercely without the type of restrictions prior to deregulation. Airlines today can enter and exit a market to serve any airport pair and set the level of fares, routes, and frequency of flights as they see fit. As such, passenger fares have become dependent on two aspects of airline market structure: the level of competition that exists on a particular route and the extent of singular airline hub dominance at origin or destination airports of a specific flight (Bold 8). Though most flight routes are open to free entry and exit, laws that suppress airline competition still exist and significantly decrease market competition and consumer welfare as seen in the price of air fares, travel time, commuting and parking costs, and overall economic impact in affected regions.[1] These laws exist in the form of limiting airlines’ ability to fly to and from certain airports through two major airport restriction types: perimeter rules and slot rules (Bold 8).[2]

"How do we love you? Let us count the ways." This was the slogan of one of Southwest Airlines’ first advertisements when it began flying forty-three years ago. Back in 1971 there were only three ways.[3] The low-cost carrier served just three cities[4], and the slogan took its play on words from the name of the airline’s home base at Love Field Airport in Dallas, Texas (Wang 353). Today, Southwest has grown to be America’s largest low-fare carrier, serves more passengers across the country than any other airline,[5] and spreads its love and low-cost airfares to ninety-six destinations in forty-one states including the District of Columbia and Puerto Rico.[6]Yet, if you want to fly to or from Dallas directly on a Southwest flight, you're limited to just eighteen cities within Texas and a few surrounding states.[7] A peculiar piece of federal legislation called the Wright Amendment created this ironic tether, restricting Southwest Airlines from freely flying from its own Dallas airport hub (Wang 354).

The origin of the Wright Amendment dates back to the pre-deregulation era of the airline industry and is a very interesting case of a law that has come to suppress competition at one of the nation’s busiest metropolitan areas. Named after Jim Wright, a former Speaker of the House from Fort Worth, the Wright Amendment was passed in 1979 to protect then-young Dallas-Fort Worth International Airport (DFW) from competition at Love Field Airport.

Although focusing on Dallas Love Field, the Wright Amendment—which is a form of a perimeter rule—and its subsequent effect on the city of Dallas, the scope of this topic covers issues that are relevant to numerous airports throughout the country with perimeter rules in place. Section I will define the issue of perimeter rules, cover the historical background of Dallas and Fort Worth’s fight for a regional airport, and the judicial cases leading to the passage of the Wright Amendment. Section II will then cover several series of judicial amendments following the Wright Amendment’s passage leading up to its ultimate repeal. Lastly, Section III explores, through the understanding of Love Field Airport, the impact of nationally imposed perimeter rules on the local Dallas economy and on the consumers who fly into or out of a restricted airport, and what implications the restrictions and repeal terms have had for future airport growth.

Section I

Perimeter Rules

Currently there are two types of airport restrictions that legally limit competition in the airline industry, the slot rule and the perimeter rule (Bold 11). While slot rules are generally targeted at reducing airport congestion[8], general perimeter rules and the Wright Amendment were implemented to encourage growth at nearby airports. Specifically, perimeter rules: 1) control increasing air traffic at a given airport; 2) reduce ground congestion by catering to customers who move through the airport more quickly; 3) maintain the airport as a short- and medium-haul facility by diverting long-haul traffic to a nearby airport, thus easing the burden on the infrastructure of the airport i.e. parking lots, baggage handling, terminals, and other facilities; and 4) assure full utilization of a nearby, less convenient airport (Cross 102).[9]

Airport perimeter rules generally establish maximum permissible distances of non-stop flights into and out of a given airport (Allen 1013). Many advocates of the Wright Amendment support their position by arguing that Congress permits perimeter rules to restrict flights at two other airports, La Guardia and National (Wang 366). At La Guardia, carriers are only able to provide non-stop flights to or from the airport within a 1,500-mile perimeter.[10] The perimeter rule at La Guardia was formalized in 1984 and instituted to reduce congestion and force long-haul flights to John F. Kennedy Airport (JFK). For example, if someone wishes to fly non-stop from New York to Los Angeles, the passenger would have to fly either from Newark or JFK since Los Angeles lies outside of La Guardia’s 1,500-mile perimeter (Bold 12). At National, carriers cannot provide non-stop flights within a 1,250-mile perimeter. [11]

Both perimeter rules were designed to decrease overcrowding at the respective airports by diverting some traffic to larger nearby airports like Kennedy, Newark, Dulles, or Baltimore-Washington,[12] but several key differences distinguish the perimeter rules governing La Guardia and National from the restrictions of the Wright Amendment. These include the reason for the restrictions, the entity imposing restrictions, and the authority invoked to pass the restrictions, (Wang 367). To be discussed briefly in a later comment, the rules imposed at the other two airports were by an administrative agency, like the FAA at National Airport, or by the local proprietor, like at LaGuardia. At Love Field, the US Congress promulgated the perimeter rule, which begs the question of whether Congress is the appropriate authority or proprietor through which rules that affect the local level are imposed. Lastly, the Wright Amendment is a form of a rule where the perimeter is defined by state borders instead of a fixed distance, as in the case of the other two airports (Bold 11).

The fight for a regional airport

The Wright Amendment[13] represents a culmination of what has been, and continues to be, a “fierce, intense, and sometimes bitter rivalry”[14] between the cities of Dallas and Fort Worth for the business of the region, particularly that of commercial aviation. The downtown central business districts of both cities are only thirty-one miles apart. This close proximity naturally raises issues of convenience, so as far back as the late 1920s, both cities had proposed a regional airport that would serve the entire metropolitan area. When initial planning efforts for the regional airport failed to come to fruition, both cities began to operate separate airports—Meacham Field in Fort Worth,[15] and Love Field Airport in Dallas.[16] As air traffic increased, Dallas—who owned and operated Love Field since 1928—enlarged and improved the Love Field facilities (Gilbreath 224). In 1953, Fort Worth responded by opening a new airport called “Greater Southwest International Airport” (GSIA) or Carter Field, moving primary airline traffic from Meacham Field to the new facility. For several years after Carter Field opened, the two airports fought for the federal Civil Aeronautics Board’s (CAB)[17] approval of routes and market share of air travel in north Texas (Grantham 435). A short distance of only twelve miles separated both commercial airports but the closeness of the two airports resulted in “unnecessary expense to the carriers as well as the taxpayers and inadequate and incomplete air service to both cities” (Grantham 433).

In the early 1960s, the CAB began investigating whether Dallas and Fort Worth should be forced to designate a single airport as the point through which all interstate air carrier service to the North Texas region would be served, and provided the impetus for the creation of a new airport (Allen 1014). The announcement of the investigation brought “optimistic and grateful expressions from Fort Worth” but “resentment and determined opposition from Dallas” (Grantham 436).[18] The CAB gave the two cities six months to reach a voluntary agreement; otherwise the CAB would designate either Love Field or GSIA to be the new regional airport (Gilbreath 225). In 1968, the cities at last jointly adopted a Regional Airport Bond Ordinance that authorized the issuance of Dallas-Fort Worth Regional Airport Joint Revenue Bonds for the financing of the new airport to be called “Dallas-Forth Worth International Airport”, or DFW (Allen, 1014).[19] In addition to the Bond Ordinance providing the financing, it mandated the eventual phase-out of commercial passenger flights at competing airports in the area, including Dallas’ Love Field.[20] The Bond Ordinance clearly stated that Dallas and Fort Worth intended that all “certificated air carriers”[21] service the Dallas-Fort Worth area be located at the new regional airport. The ordinance reads: "…shall take such steps as may be necessary, appropriate and legally permissible (without violating presently outstanding legal commitments or covenants prohibiting such action), to provide for the orderly, efficient and effective phase-out at Love Field, Redbird, GSIA and Meacham Field, of any and all Certificated Air Carrier Services, and to transfer such activities to the Regional Airport effective upon the beginning of operations at the Regional Airport.”[22] To this end, the intent was not to render the competing airports unusable, but rather this measure restricted the use of the area airports to operations that fell outside of the air carrier category. These operations, carved out by the Bond Ordinance, allowed the area airports to continue some revenue generating operations rather than subject each city to waste the substantial investments placed in their respective airports, as long as the activities would not be competitive with or in opposition to the optimum development and success of DFW (Grantham 428).

To effectuate the phase out of service at Love Field, the DFW Airport Board executed use agreements with each of the eight CAB certified air carriers then serving the Dallas-Fort Worth area (Allen 1015).[23] This agreement ensured that sufficient revenues would be available to operate DFW. However, the continued operation of Love Field and the Board’s attempt to maintain a use for the airport, as carved out by the Bond Ordinance, soon became the target of a new carrier—Southwest Airlines (Grantham 428).

Judicial Decisions leading to the passage of the Wright Amendment

1. City of Dallas v. S.W. Airlines Co.[24]

Missing from the group of airlines under the executed use agreements was start-up low-cost airline Southwest, which received approval from state regulators to start providing intrastate commuter service, flying from Love Field to Houston and San Antonio in 1971, three years after the passage of the Bond Ordinance.[25] Southwest formally notified the new DFW Airport Board that it intended to stay and operate flights at Love Field and “declined to execute the letter agreement with the Airport Board that had previously been signed by the CAB carriers.”[26]

The cities of Dallas and Fort Worth, and the DFW Board responded by suing the airline in the Federal District Court for the Northern District of Texas.[27]The lawsuit argued, among other points, that allowing Southwest, or any other carrier, to operate services at Love Field threatened the financial security of the new regional airport by diverting air traffic away from DFW to Love Field.[28]However, the federal district court pointed out that, under the bond arrangements of both airports, "any revenue generated at Love Field by Southwest Airlines defrays the costs and expenses of the Regional Airport" (Wang 356).[29]

The court found that the cities had no authority to deny use of Love Field, regardless of fears over economic necessity.[30]The court held that, “so long as Love Field [remained] open as an airport,” the cities could not exclude Southwest from it.[31] Further attempts to prohibit Southwest from operating at Love Field resulted in another court judgment from the Fifth Circuit in 1974. The Fifth Circuit agreed and affirmed the decision upon appeal,[32] holding, conclusively, that res judicata[33] dictated that the prior decision permitting Southwest's operation should stand.[34] That same year, the long-awaited DFW began services, immediately becoming the region's primary and dominant airport (Wang 357).For several years after, Southwest operated its strictly intrastate commuter flights out of Love Field throughout Texas without further turmoil.

2. Airline Deregulation Act[35]

While operating only intrastate flights, Southwest was exempt from regulations that governed interstate airline operations under the Federal Aviation Act of 1958. Historically, the Civil Aeronautics Board had regulated interstate travel as a public utility by setting fares, routes, and schedules.[36] Then, in 1978, President Jimmy Carter signed into law the Airline Deregulation Act (ADA)[37], aimed at removing government control and fostering competition in the airline industry.[38] Under the relaxed regulations, a whole new level of opportunities was opened for the airline to capitalize its successful business model on a national level and expand into markets the CAB did not previously authorize. Subsequently, Southwest Airlines applied to the CAB for the right to begin services to New Orleans from Love Field, and was granted the right to do so. The CAB concluded the ADA preempted Dallas and Forth Worth from enforcing the Bond Ordinance provision aimed at prohibiting interstate service at Love Field and that banning the service proposed by Southwest would not be a valid exercise of proprietary powers (Gilbreath227).[39]

3. Wright Amendment

Naturally, CAB granting Southwest’s application to expand its service was not welcome by city officials in Dallas and Fort Worth, who feared airline deregulation and expanded service from Love Field would divert business away from DFW (Wang 357).

In response to these concerns, Jim Wright (D-TX), Speaker of the U.S. House of Representatives serving Fort Worth, sponsored and attached an amendment to the larger International Air Transportation Competition Act of 1979 that would protect DFW from competition and restricted passenger air traffic only out of Love Field. The result, after numerous modifications, became what is known as the Wright Amendment of 1980—and using the pretext of protecting DFW, enforced three major points: 1) passenger service on regular mid-sized and large aircrafts could only be provided from Love Field to intrastate locations within Texas and the four neighboring states, Louisiana, Arkansas, Oklahoma, and New Mexico; 2) airlines were prohibited to offer or advertise the availability of any connecting flights between Love Field and any city outside the Wright perimeter and 3) long-haul services to destinations outside the Wright perimeter were only allowed on aircrafts with fewer than 56 seats (Bold 13).[40]

4. Cramer v. Skinner[41]

The law stood unchallenged for a decade, until an airline passenger sued to have the Wright Amendment declared unconstitutional (Wang 358).Plaintiff Buddy Cramer's suit alleged the Wright Amendment violated his First Amendment rights to interstate travel and upon his free-speech rights by limiting the information he was allowed to receive from airlines at Love Field.[42]Beyond anchoring the airlines at Love Field to a four-state service area, the Wright Amendment also prohibits airlines from offering passengers information on flights that connect outside the Wright perimeter.[43]The Fifth Circuit upheld the defendant’s counterclaims, and acknowledged precedent constitutional provisions that infer a Constitutional right to interstate travel, but found that a law violates this right only if it actually deters such travel (Wang 358). The court looked to City of Houston v. F.A.A, 679 F.2d (5th Cir. 1982) for precedent.

In City of Houston, the FAA, as owner-operator of both Washington National and Dulles International airports, sought to increase business at the less popular Dulles by permitting "long-haul" flights only at Dulles. It imposed a perimeter rule that prohibited air carriers from operating nonstop flights between National and any airport more than 1,000 statute miles away.[44]

Upholding similar perimeter rule restrictions placed on Washington National Airport,[45] the courts held that, because Cramer was free to travel nationally either through DFW or by taking a second flight from a point outside the Love Field service area, the Wright amendment did not in fact deter travel. In City of Houston,the court rejected the argument that a perimeter rule infringes upon the right to interstate travel and reasoned that: “at most, the argument reduces to feeble claim that passengers have a constitutional right to the most convenient form of travel.”[46] The Wright Amendment, in the Court’s opinion, does not deter travelers from using Love Field, but similar to the perimeter rule issue in City of Houston, it merely makes travel less convenient. The court also held that the government could restrict the commercial speech of Love Field airlines because it was a reasonable restraint in light of the government's substantial interest in providing "a fair and equitable settlement for [the] dispute" between Dallas and Fort Worth (Wang 358).[47]

SECTION II

Today, the annual enplanements and deplanements at DFW are 60.4 million passengers, making the airport the fourth busiest in the country.[48] At Love Field it had stayed constant around 6 million until 2006 and grew to 7.9 million by 2011.[49] Considering the passenger traffic had reached 6.3 million in 1973, the growth at Love Field has been severely constrained by the Wright Amendment (Bold 13). For many of the 60.4 million passengers who fly in and out of DFW, the Wright Amendment is potentially a major setback preventing them from the choice of experiencing lower fares, a closer airport, and less delay time. As such, over the years there has been heavy campaigning resulting in a series of relaxations and alterations to the Wright Amendment. Finally, in 2006, an agreement to fully repeal the amendment by October of 2014 was reached among the stakeholders. These sequences of alterations present an opportunity to consider its affects in the absence of the amendment. Arguably, the Wright Amendment has outlived its original purpose and, under the terms of its repeal, we can begin to measure, for better or worse, the economic impact that can be brought by increased competition to the Dallas metropolitan area and consumers of air service.

Judicial decisions following the Wright Amendment

1. Kansas vs. United States[50]

The first exemption to the amendment was passed in October of 1997. Following on the heels of Cramer, legislators from Kansas, demanding the low fares of Southwest Airlines, also filed suit to have the Wright Amendment overturned as unconstitutional (Wang 358). Like Cramer, Kansas also asserted violations of the First Amendment right to receive information and the right to interstate travel.[51]However, Kansas made one additional Constitutional argument, a violation of the "Port Preference Clause”,[52] The Port Preference Clause prohibits government regulation from giving “preference” to the ports of one state over those of another. In Kansas, the challengers argued that the Wright Amendment violated the Clause by establishing a direct preference for airports of the states enumerated in the amendment.

Citing the Cramercase, the D.C. District Court found the Wright Amendment's limits on commercial speech a reasonable means to achieve the government's interest of reducing air travel at Love Field.[53] And similar to Cramer, the Court also held that the Wright Amendment does not violate the fundamental right to interstate travel, as it operates as only a "hinderance" or "impediment" to those traveling out of Love Field.[54] Finally, the court also rejectedthe Port Preference Clause argument.[55] Two years later, the D.C. Circuit Court of Appeals affirmed the lower court’s judgment (Wang 359).[56]

Unable to repeal the Wright Amendment through litigation, Kansas legislators took the matter to Congress, claiming that the Wright Amendment kept fares between DFW and many US cities much higher and stifled free enterprise. In 1997, the Kansas congressional delegation banned together with legislators of other states eager for Southwest's service to push through a new amendment on air travel from Love Field (Wang 359).With the help of Senator Richard Shelby of Alabama[57] and powerful Kansas politicians including then- Senate Majority Leader Bob Dole, Congress passed the Shelby Amendment, which added Kansas, Alabama, and Mississippi to the list of states that airlines could serve directly from Love Field.[58]

The Shelby Amendment also introduced a more relaxed version of the 56-seat restriction stating that as long as the airplane contained, including reconfigured or originally manufactured, fewer than 56-seats and weighed less than 300,000 pounds, it could be flown anywhere in the country. The previous version of the 56-seat rule stipulated that the aircraft originally must have been manufactured with fewer than 56 seats (Bold 14). This led several airlines to consider flying 56-seat passenger jets out of Love Field, including Continental, Delta, and a new airline, Legend. The City of Fort Worth immediately sued the City of Dallas[59] to try to prevent the Shelby Amendment from going into effect. American Airlines, headquartered at DFW, joined the lawsuits against Dallas, but also said that if other airlines were allowed to fly out of Love Field, it would have no choice but to offer competing service. In 1998, after a year of legal decisions and appeals, Continental Express became the first major airline other than Southwest to fly out of Love Field since 1974. American began service out of Love Field shortly thereafter, but continued to sue to stop the service.

 2. Bond Amendment

The second relaxation came in December 2005 when Missouri Senator Christopher ‘Bond successfully added another exemption known as the “Bond Amendment” to the Wright Amendment to allow through ticketing to states outside of the Love Field Service Area. [60] Southwest immediately began service to Kansas City and St. Louis.

3. Repeal

The third and the most significant alteration was at last realized in 2006 after years of heavy campaigning by Southwest to repeal the amendment in its entirety. An agreement was reached between American Airlines, Southwest Airlines, the city of Dallas, and the city of Fort Worth, which came to be a public law named the Wright Amendment Reform Act of 2006.[61] Three major conditions were agreed upon for the reform to be realized. First, beginning October 2006 until October 2014, airlines operating atLove Field would be permitted to sell tickets to any destination in the country as long as the flights make a layover or connection within the Wright perimeter. Second, once the stop-over requirement expires and airlines would be allowed to make non-stop flights from Love Field to anywhere in the country, the number of gates at Love Field would be reduced from 32 to 20.[62] Lastly, Love Field would handle only domestic flights non-stop. Additionally, the City of Dallas would invest between $150 million and $200 million in the redevelopment of the Airport. Within a few days of passing of the Reform-Act, Southwest announced its plan to immediately start selling tickets to 25 metropolitan areas from Love Field with connections at various points inside the Wright perimeter (Bold 15).[63]

SECTION III

Economic Impact

Love Field is a significant infrastructure and economic asset to the Dallas-Fort Worth economy. It is self-supported through user fees and charges, and generates funds that contribute to the Dallas-area tax base.[64] In 2011, the Texas Department of Transportation released an economic impact study on Love Field's role in the Dallas economy.[65] That study revealed that Love Field has an annual economic impact of nearly $4.3 billion to the city, and over $14 billion to the state.Additionally, over fifty-six thousand jobs are attributable to Love Field.[66]These figures demonstrate the great economic value of Love Field to the surrounding area.

Although Love Field has a significant impact on the surrounding economy, its true economic potential has been substantially constrained bythe Wright Amendment, and even by the terms of the amendment’s repeal. In a recent study conducted by Campbell-Hill Aviation Group[67], it was determined that the economic impact of allowing competitive service from Love Field in 15 potential new markets would provide a $1.7 billion annual gain to the Dallas-area economy, and a 46% gain in new passenger traffic from nonresidents visiting the metroplex.[68] Considering the induced impacts of the “multiplier effect”[69], the potential additional direct and indirect funds to the city of Dallas are estimated to be between $6 to $8 billion to the region.[70]

Furthermore, under the repeal’s terms and outlined in the 2011 Love Field Master Plan, the number of gates at Love Field will be reduced from 32 to 20.[71]

The cap of 20 gates will effectively restrict the purpose of the 2014 lifting of the ban on nonstop flights outside the Wright perimeter, and limit Love Field’s ability to grow. Still, many will continue to argue the growth of Love Field will hinder DFW’s economic success. Yet, from a planning perspective, the limited capacity for air traffic at Love Field already sufficiently protects the regional airport from any substantial competition. Even if the lifting of flight restrictions and gate capacity under the amendment’s repeal were lifted, Love Field airport can still only operate at a maximum of 32 gates. This was determined in a Master Plan released in 2001[72] that took into account the limited airspace of the Dallas-Fort Worth region and the level of acceptable air traffic, noise, and congestion.[73] As one news report determined, even if Love Field added eight to ten flights per day at the unused gates, it would still fly fewer than 200 flights per day (Wang 383). Compare that to DFW’s nearly 1,750 daily departures, and it seems hardly possible that incremental activity at Love Field could pose a threat to DFW’s financial stability.

Lastly, the economic impact in consumer welfare cannot be ignored. Because of the Wright Amendment, fares for flights, travel times, and commuting and parking costs to and from the Dallas metropolitan area have been potentially higher than what they would have been.[74] As analyzed in an economics dissertation published by Northeastern University, higher airfare prices can be factored to the level of route competition between airlines serving a particular airport pair. The higher the competition, the lower the fares have been for passengers. In the last three decades, Southwest has been the pioneer of increased route-level competition that results in low fares wherever it chooses to serve. Passengers flying to or from the Dallas metropolitan area on routes outside of Texas and the Wright zone have been paying higher for fares due to Southwest’s inability to serve more than a handful of airport pairs directly out of Love Field (Bold 10).[75]

Conclusion

The perimeter rules imposed at Love Field, National, and La Guardia are all similar in that they were designed to restrict the use of an older, smaller airport in order to assure the full utilization of a nearby, less convenient airport, but all with different circumstances surrounding the rules’ passage. Congress passed the Wright Amendment because of fear that continued use of Love Field would hinder the growth of DFW. To help insure DFW's success, Congress prohibited commercial air carriers from providing service between Love Field and destinations outside of Texas and its four surrounding states. Numerous studies and court cases have been conducted challenging the constitutionality of the Wright Amendment and its subsequent reforms.[76] Yet, the airport once perceived as needing protection from Love Field in the form of the amendment in order to establish itself is today the third busiest airport in the world.[77] In fact, because of DFW's tremendous growth, the airport is already in the middle of an eight-year expansion project. In this era of burgeoning air travel to and from the Dallas-Fort Worth metropolitan area, it makes little sense to restrain Love Field so tightly, even under the terms of the Wright Amendment’s repeal (Allen 1073).

Many opponents of the repeal maintain that the Wright Amendment is necessary as a limit on noise pollution. The urban growth of residential neighborhoods around the airport undoubtedly means that reasonable noise restrictions are needed at Love Field.[78]While reduction of noise pollution is a precedential reason for the implementation of perimeter rules, Congress, however, did not tailor the current restrictions to minimize noise (Allen 1066). Imposing restrictions on flight destinations may be an effective tool for protecting DFW, but it is an inefficient method of controlling noise pollution. Any change in noise levels after repeal of the Wright Amendment will occur as a result of increases in the aggregate number of operations, not as a result of changes in the origins and destinations of the additional flights. But as demonstrated, at a reduced gate capacity from 32 to 20, this increase in aggregate daily flights is hardly substantial. Furthermore, modern aircrafts are significantly quieter than the planes of the pre-Wright era.[79] A recent noise impact analysis takes this into account and indicates operating at true capacity will in effect be the same as pre-Wright repeal in terms of noise exposure.[80]

Ultimately, then, the worry about competition between two airports is in reality fear of competition between two airlines. Dallas, unlike many other cities of its same caliber, is the hub to two major airlines: American and Southwest. As it stands, American dominates roughly 80% of the flights out of DFW, a term the Department of Transportation calls—“fortress hubs” (Wang 386). This translates to Dallas having one of the least competitive airline markets, and a monopoly on air travel to and from the region for a single air carrier.

So, what should be considered in addition to the extent of hub dominance at the two respective airports is the city’s stake in the two. The City of Dallas wholly owns Love Field, but only half of DFW. There are obvious demonstrable benefits for wanting both airports to be competitive and successful for both consumer welfare and as an economic development tool for the city, as both airports’ economic impacts to the North Texas region are significant. Nonetheless, as Love Field directly abuts residential neighborhoods, arguably there should be some level of scrutiny or control beyond that of DFW. Whether the Wright Amendment was the correct means to do so is still debated among many stakeholders, but the impact of a nationally imposed control has been substantial. Moving forward under the terms of its repeal, control over Love Field should be left to its proprietor, the City of Dallas. A city's air travel needs are subject to change over a relatively short period of time. The local airport proprietor is more in tune with the needs and concerns of the surrounding community, the city’s zoning ordinances regarding airports, and the consumers who use the airport.

Bibliography

Allen, Eric A. "Wright Amendment: The Constitutionality and Propriety of the Restrictions on Dallas Love Field, The." J. Air L. & Com. 55 (1989): 1011.

Bold, Tuvshintulga, "Three essays on competition and productivity in the U.S. airline industry" (2014). Economics Dissertations. Paper 15. http://hdl.handle.net/2047/d20003378

Airport Compatibility Guidelines For Airports in Texas. Publication. Texas Department of Transportation Aviation Division, 2003. Print.

Cross, Jonathan Whitman. "Airport Perimeter Rules: An Exception to Federal Preemption." Transp. LJ 17 (1988): 101.

Dallas Love Field Impact Analysis Update In the Absence of the Wright Amendment. Rep. Dallas: DMJM Aviation, 2006. Print.

"Facility Requirements and Concept Development." Airport Impact Analysis/Master Plan. Dallas: DMJM Aviation, 2001. 4-1--75. Print.

Gilbreath, Robert B., and Paul C. Walter. "Perimeter Rules, Proprietary Powers, and the Airline Deregulation Act: A Tale of Two Cities... And Two Airports." J. Air L. & Com. 66 (2000): 223.

Grantham, John. "Free Bird Sings the Song of the Caged: Southwest Airlines' Fight to Repeal the Wright Amendment, A." J. Air L. & Com. 72 (2007): 429.

Southwest's Lease of Two Additional Gates at Love Field Would Maximize Economic Benefits for the Dallas-Ft Worth Metroplex. Rep. N.p.: Campbell-Hill Aviation Group, 2014. Print.

Tatelman, Todd B., and John W. Fischer. Dallas Love Field: The Wright and Shelby Amendments. Rep. N.p.: Congressional Research Service, 2005. Print.

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Footnotes

[1] See Allen, The Wright Amendment: The Constitutionality and Propriety of The Restrictions on Dallas Love Field, 1055

[2] A third, long-term exclusive gate leases are another form of restriction on competition at the airport level. Such long-term leases allow incumbent airlines to employ a majority of the gates at a certain airport for 20 years at a time. If an entrant wishes, it has to purchase the rights to use those gates usually at undesired hours for higher prices. (“Slot-Controlled Airports” United States General Accounting Office Report, 2012).

[3] http://www.southwest.com/images/ad_gallery/p_ad01.jpg

[4] Dallas, Houston, and San Antonio

[5] In terms of originating domestic passengers boarded

[6] http://www.swamedia.com/channels/Corporate-Fact-Sheet/pages/corporate-fact-sheet

Southwest currently also serves five near-international countries via their wholly owned subsidiary, AirTran Airways

[7] http://www.southwest.com/html/cs/travel_center/routemap_dyn.html

[8] Slot controls functions by putting limits on the number of landings and take offs within a given hour mainly during peak periods. The limitations on the number of take offs and landings translate into reduced competition, but only if the traffic is high enough that the limitations are binding, which is indeed the case generally.

[9] Western Air Lines, Inc. v. Port Auth. of N.Y. & N.J., 817 F.2d 222 (2d Cir. 1987), cert. denied, 108 .Ct. 1467 (1988)

[10] Id.

[11] Metropolitan Washington Airports Act of 1986, 100 Stat. 3341 (codified at 49 U.S.C. § 49109). Prior to 1986, the perimeter extended only 1,000 miles. City of Houston v. FAA, 679 F. 2d 1184 (5th Cir. 1982).

[12] Western Air Airlines, 817 F.2d at 233; City of Houston, 679 F.2d at 1188.

[13] International Air Transportation Competition Act of 1979, Pub L. No. 96- 192, § 29, 94 Stat. 35, 48-49 The Wright Amendment provides (1980):

Sec. 29. (a) Except as provided in subsection (c), notwithstanding any other provision of law, neither the Secretary of Transportation, the Civil Aeronautics Board, nor any other officer or employee of the United States shall issue, reissue, amend, revise, or otherwise modify (either by action or inaction) any certificate or other authority to permit or otherwise authorize any person to provide the transportation of individuals, by air, as a common carrier for compensation or hire between Love Field, Texas, and one or more points outside the State of Texas, except (1) charter air transportation not to exceed ten flights per month, and (2) air transportation provided by commuter airlines operating aircraft with a passenger capacity of 56 passengers or less.

(b) Except as provided in subsections (a) and (c), notwithstanding any other provision of law, or any certificate or other authority heretofore or hereafter issued thereunder, no person shall provide or offer to provide the transportation of individuals, by air, for compensation or hire as a common carrier between Love Field, Texas, and one or more points outside the State of Texas, except that a person providing service to a point outside the State of Texas from Love Field on November 11, 1989. 1, 1, 1, 1979, may continue to provide service to such point.

(c) Subsections (a) and (b) shall not apply with respect to, and it is found consistent with the public convenience and necessity to authorize, transportation of individuals, by air, on a flight between Love Field, Texas, and one or more points within the States of Louisiana, Arkansas, Oklahoma, New Mexico, and Texas by an air carrier, if (1) such air carrier does not offer or provide any through service or ticketing with another air carrier or foreign air carrier, and (2) such air carrier does not offer for sale transportation to or from, and the flight or aircraft does not serve, any point which is outside any such State. Nothing in this subsection shall be construed to give authority not otherwise provided by law to the Secretary of Transportation, the Civil Aeronautics Board, any other officer or employee of the United States, or any other person.

(d) This section shall not take effect if enacted after the enactment of the Aviation Safety and Noise Abatement Act of 1979.

[14] City of Dallas v. S.W. Airlines Co. 371 F. Supp. 1015, 1019 (N.D. Tex. 1973), aff’d 494 F.2d 773 (5th Cir. 1974).

[15] Meacham Field was built five miles north of downtown Fort Worth

[16] Love Field was built six miles north of downtown Dallas

[17] The Civil Aeronautics Board (CAB) was the predecessor to the Federal Aviation Administration (FAA)

[18] CAB Orders Hearings on Regional Airfield for Dallas Fort Worth: Local Leaders Oppose Inquiry, Dallas Morning News, Aug. 22, 1962, at 1.

[19] Dallas, Tex., Regional Airport Concurrent Bond Ordinance 12,352; Fort Worth, Tex., Regional Airport Concurrent Bond Ordinance No. 6021 [hereinafter, jointly, Bond Ordinance].

[20] Id.

[21] As defined in by the FAA in Title 14, Code of Federal Regulations, Part 139 revised.

[22] Id. § 9.5(B). Section 9.5 (B) states the following:

In addition to the covenant of the Cities contained in paragraph A, next above, regarding the transfer of Certificated Air Carrier Services, the Cities further agree that they will through every legal and reasonable means promote the optimum development of the lands and Facilities comprising the

Regional Airport at the earliest practicable date, thus to assure the receipt of Gross Revenues therefrom to the maximum extent possible, and neither the Cities nor the Board will undertake with regard to the Regional Airport, Love Field, GSIA, Meacham Field, or Redbird, and action, implement any policy, or enter into any agreement or contract which by its or their nature would be competitive with or in opposition to the optimum development of the Regional Airport and use of its land and Facilities at the earliest practicable date; and none of the airports of the Cities shall be put to or developed for any use which by the nature thereof the optimum use and development of the Regional Airport, including its air and land space, at the earliest practicable date will be impaired, diminished, reduced or destroyed. It is provided, however, that nothing in this paragraph shall be construed to prohibit the promotion and full development of the operation or reasonable Aircraft uses (other than Certificated Air Carrier Services) at Love Field, Redbird and Meacham Field, or Aircraft operations of any type at GSIA if the same shall be made a part of the Regional Airport. Otherwise, Aircraft uses at GSIA shall not be permitted after the Regional Airport becomes operational.

[23] City of Dallas v. S.W. Airlines Co, 371 F. Supp. At 1020-21. The either carriers were American Airlines, Braniff Airways, Continental Airlines, Delta Air Lines, Eastern Air Lines, Frontier Airlines, Ozark Airlines, and Texas International Airlines

[24] Id.

[25] Id. at 1021

[26] Id.

[27] Id.

[28] Id. at 1025.

[29] Id. DFW had an obligation to finish paying off Love Field bonds, but no money would be diverted away from DFW to pay off those bonds so long as Love Field generated sufficient revenue of its own. Thus, the court concluded, any revenues accrued through Southwest’s presence at Love Field actually benefited DFW by preventing funds from being diverted to Love Field.

[30] CITE SOMETHING

[31] Id. at 1035

[32] City of Dallas v. S.W. Airlines Co., 494 F.2d 773, 775 (5th Cir. 1974).

[33] A matter that has been adjudicated by a competent court and may not be pursued further by the same parties.

[34] S.W. Airlines Co. v. Tex. Int’l Airlines, Inc., 546 F.2d 84, 103 (5th Cir. 1977).

[35] Airline Deregulation Act,Pub.L. 95–504, 49 U.S.C. § 1371 et seq. Approved October 24, 1978.

[36] http://wikipedia.org/wiki/Airline_Deregulation_Act

[37] The Airline Deregulation Act is a 1978 United States federal law intended to remove government control over fares, routes and market entry (of new airlines) from commercial aviation. The Civil Aeronautics Board's powers of regulation were phased out, eventually allowing passengers to be exposed to market forces in the airline industry. The Act, however, did not remove or diminish the regulatory powers of the Federal Aviation Administration (FAA) over all aspects of air safety.

[38] See Wikipedia Airline Deregulation Act

The stated goals of the Act include the following:

• the maintenance of safety as the highest priority in air commerce;

• placing maximum reliance on competition in providing air transportation services;

• the encouragement of air service at major urban areas through secondary (nonprimary) or satellite airports;

• the avoidance of unreasonable industry concentration which would tend to allow one or - more air carriers to unreasonably increase prices, reduce services, or exclude competition;

• the encouragement of entry into air transportation markets by new air carriers, the encouragement of entry into additional markets by existing air carriers, and the continued strengthening of small air carriers.

[39] Refers to the unlimited authority vested in Congress by the Property Clause of the Constitution. See Okeson v. City of Seattle, 159 Wn.2d 436 (Wash. 2007).

[40] International Air Transportation Competition Act of 1979, Pub. L. No. 96-192, § 29, 94 Stat. 35, 48-49 (1980). The Wright Amendment provisions are found in the last section of the International Air Transportation Competition Act of 1979.

[41] Cramer v. Skinner, 931 F.2d 1020, 1022 (5th Cir. 1991).

[42] Id. at 1033.

[43] Id.

[44] City of Houston v. F.A.A., 679 F.2d 1184, 1198 (5th Cir. 1982)

[45] See Cramer, 931 F.2d at 1030

[46] Id.

[47] Id. at 1034

[48] http://www.dfwairport.com/visitor/P1_009559.php

[49]Dallas Love Field Airport statistics of 2011 (http://www.dallas-lovefield.com/pdf/statistics).

[50] Kansas vs. United States, 797 F. Supp. 1042, 1048 (D.D.C 1992),aff’d 16 F.3d 436 (D.C. Cir. 1994).

[51] Id. at 1048

[52] U.S. Constitution Article I, § 9, Clause 6. “No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another; nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.”

[53] Id. at 1053-54.

[54] Id. at 1052

[55] Id. at 1051

[56] Kansas v. United States, 16 F.3d 436 (D.C. Cir 1994).

[57] Head of the Transportation Subcommittee of the Senate Appropriations Committee

[58] Tatelman and Fischer, “Dallas Love Field: The Wright and Shelby Amendments” CRS Report for Congress (2005)

[59] City of Fort Worth, Texas v. City of Dallas, Texas No. 48-171109-97 (48th Dist.Ct., Tarrant County, Tex., Oct. 10, 1997).

[60] Independent Agencies Appropriations Act of 2006, Pub. L. No. 109-115, § 181, 119 Stat. 2396

[61] Public Law 109-352, 120 Stat. 2011 (2007).

[62] Id.

[63] Id.

[64] http://www.dallas-lovefield.com/love-notes.html

[65] See Dallas Love Field Impact Analysis Update, 5-1

[66] https://ftp.dot.state.tx.us/pub/txdot-info/avn/avninfo/eco-impact/2011/eco_dal.pdf

[67] See Southwest's Lease of Two Additional Gates at Love Field Would Maximize Economic Benefits for the Dallas-Ft Worth Metroplex (2014).

[68] http://www.swamedia.com/releases/5f798c13-6085-0c37-0da9-90184b69e3f1?mode=print

[69] The multiplier effect refers to the increase in final income arising from any new injection of spending.

[70] See Dallas Love Field Impact Analysis Update, 5-4

[71] Southwest will be able to operate from 16 gates, American 2 gates, and Continental 2 gates.

[72] Dallas Love Field Master Plan, Final Executive Summary, March 3, 2001

[73] Id. at 1-3

[74] See Allen, The Wright Amendment: The Constitutionality and Proprietary of the Restrictions on Dallas Love Field, 1055 § 1-3

[75] See Bold, footnote 4

The author notes: Another potential cause for higher fares at DFW is the hub premium effect. Borenstein (1989) finds that a carrier with at least 50% of the traffic at an airport charged about 12% higher fares than those with about 10% traffic. Currently, Dallas Fort-Worth is American Airline’s hub airport as it handles 82% of all flights originating or ending at the airport. Naturally, on routes outside of Texas and its contiguous states American Airlines aims to charge a hub-premium on fares on its customers which it will not be able to if faced with competition from Southwest out of DAL. Again, the Wright Amendment has preserved American Airlines’ ability to charge a hub-premium fare by prohibiting Southwest from serving the affected markets.

[76] See Love Terminal Partners, et al. v. United States, No. 08-536 L (Fed. Cl., Feb, 2011), the court granted plaintiff’s motion for summary judgment in part, holding that the Wright Amendment Reform Act of 2006, prohibiting the use of 26.8 acres at Dallas Love Field Airport to which plaintiffs hold long-term lease rights, effected a per se taking without just compensation; see also City of Dallas, 371 F. Supp. 1015, 1019; City of Dallas v. S.W, 494 F.2d; S.W. Airlines Co, 546 F.2d; City of Houston, 679 F.2d; Cramer, 931 F.2d; Kansas, 797 F. Supp. 1042, 1048

[77] http://en.wikipedia.org/wiki/Dallas/Fort_Worth_International_Airport

[78] See Airport Compatibility Guidelines For Airports in Texas

[79] http://www.economist.com/blogs/gulliver/2012/05/ronald-reagan-washington-national-airport

[80] See Dallas Love Field Impact Analysis Update, 2-16

The study states: In effect, 20 gates without the Wright Amendment will be essentially the same as those projected in the Master Plan 32 Gate scenario, and 32 gates without the Wright Amendment will slightly increase those impacts.