David Cush, president and chief executive officer, Virgin America, second from left, talks to a flight attendant as Chairman Don Carty speaks (Max Faulkner/Fort Worth Star-Telegram)
In April 2010, Southwest Airlines’ vice president Bob Montgomery wrote a pointed letter to then City Manager Mary Suhm and Mayor Tom Leppert.
The city was considering handing over some very lucrative concessions contracts in a no-bid deal that would have seen the retail and restaurant business at Love Field locked into the hands of monopoly owners for years into the future.
Southwest, funding a beautiful reconstruction of the Love Field terminal, didn’t like the deal at all.
“Southwest must express concern with the current proposal before the City Council, which locks in the award of half of the concession space … for the next twenty years,” Montgomery wrote.
Lo and behold, the Dallas City Council finally listened. A nasty racial fight ensued, but concessions at Love Field were opened up to competition. Anyone who has been to Love lately has seen the excellent results.
Had Southwest sat by silently, you can be assured the result would have been different. The carrier is as powerful a player as you will find in Dallas.
Fast forward four years. Southwest is almost a monopoly carrier at Love Field today. Virgin America Airlines is seeking two gates out of the airport.
Lo and behold, the city of Dallas has come up with a consultant’s report showing that Southwest should get the gates and complete its total dominance of the airport.
I seem to recall a similar consultant’s report in the concessions fight that drew the obviously bogus conclusion that wrapping all of the concessions under two companies would actually benefit the airport. It was laughable on its face.
The airline business is more complicated than the concessions business. No one doubts that. But a basic premise of economics tells us that competition helps the consumer.
Virgin obviously saw all this coming. That’s why the airline’s president and chairman staged the dog and pony show at Love Field Friday. It was a preemptive strike. And they had a strong argument to sell. The Department of Justice has already decided the gates should go to Virgin. But Virgin execs had gotten a sense of the political wind at City Hall and decided to push back in the best way they could. It was an effort to seize the debate, and preempt the City Council from demanding that Southwest gets the gate. As far as local politics go, I’d call it one of the gutsier moves I’ve seen in a long time.
Whether it will succeed, we shall see. The council’s transportation committee is set to take up the matter this after. I expect we will hear quite a bit about this consultant’s report.
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Source: southwest - Google News http://ift.tt/1nX0rWG
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