First, L.E.K Consultants did a study for the city of Dallas that said Southwest Airlines would be the better choice for two American Airlines gates up for grabs at Love Field. Then on Monday, Virgin America issued a rebuttal to the study and why it should have the gates.
Southwest Airlines executive vice president Ron Ricks at Monday's City Council transportation committee meeting (Terry Maxon/Dallas Morning News)
Early Wednesday evening, Southwest released its rebuttal of the Virgin America rebuttal to say why the study was right and why Southwest should have the gates.
We reprinted the Virgin America rebuttal in its entirety, and we’ll do the same for the Southwest rebuttal. And if you click Delta law firm letter to Dallas mayor and City Council, April 28, 2014, you can see the 11 pages that Delta Air Lines sent the mayor and City Council on Monday explaining why the city should take over the gates from American. The submittal also includes a letter from Delta in February asking that the city make two gates and part of a third available for its Dallas flights.
Here goes the Southwest response:
1. Love Field (DAL) is not a separate market isolated from the rest of Dallas, and Southwest has no “monopoly” on Dallas gates or air service. DAL and DFW make up a single Dallas air service market that is dominated by American, not Southwest. Even with 2 additional Love Field gates, Southwest would have only 10% of all gates in the Dallas market. American would have 67%.
2. The DOJ’s lawsuit which ultimately forced American to divest its Love Field gates was intended to increase competition against American at DFW. It was not concerned about competition at Love Field. Southwest will provide more competition to American if it secures two additional gates at Love Field. Virgin is primarily seeking to move its service from DFW to DAL rather than add new competition in the Dallas market.
3. Virgin America’s current Dallas fares are higher than Southwest’s fares once Virgin’s fees for checked baggage ($25 on both first and second bags) and ticket changes ($150) are included. Southwest does not charge passengers those fees. Southwest’s estimated fares from DAL to LAX and SFO would be 7% to 9% below Virgin America’s current fares.
4. Virgin America has increased its fares at DFW much more than Southwest has at DAL. Last year Virgin increased its DFW fares over 18% while Southwest increased its DAL fares only 3.6%. Since starting service to DFW in 2011 Virgin America has increased its fares 37% while Southwest increased its fares at DAL less than 4% over the same period.
5. Virgin America’s claims about Southwest not fully utilizing its DAL gates are untrue. Southwest is currently limited to the equivalent of 13 gates at Love Field due to construction at the airport and and Wright Amendment limitations. Once the Wright Amendment is repealed and construction completed, Southwest will operate an average of 10 flights per gate per day on 16 gates (160 flights), and will add 20 more daily flights if it is able to operate on the two American gates.
6. Southwest’s use of 2 additional gates at Love Field will create six times more jobs in Dallas than would Virgin America’s proposal. The airline that brings in the most passengers will create the most jobs, and Southwest will bring in almost six times more passengers to Dallas than Virgin America. The job creation comes from new visitors spending money in the local economy, and most of the new jobs will be created outside the airline industry. The LEK study did not factor in in non-airline jobs and thus significantly under-estimated Southwest’s impact on creating new jobs.
7. The fact that the DOJ directed American to lease its gates to Virgin America in no way obligates the City of Dallas to approve such a transaction. The City was not a party to the DOJ’s lawsuit against American, and its responsibility is to manage its airport in a way that is best for the City, its residents, and businesses.
8. Therefore the key question is what is best for the City of Dallas? Southwest’s proposal for the two gates would produce head-and-shoulders the greatest benefits for the City, in terms of the number passengers carried, new travel options for consumers, jobs created, and new competition provided in Dallas. Virgin America is trying to elevate its private corporate goals (to move from one Dallas airport to another) over the welfare of the City.
9. Southwest’s proposal for the two gates is the only option that would allow all three interested airlines the ability to grow in Dallas. Assigning the gates to any other carrier will block Southwest from expanding in Dallas and result in less air service to the City than would be provided under Southwest’s proposal. Southwest is the only airline whose growth in Dallas is restricted to Love Field.
10. The Five Party Agreement which granted Southwest the rights to 16 gates at Love Field did not in any way bar Southwest from expanding service at DAL if additional gates became available. Two additional gates are now available, and the City should assign them consistent with the goals of the Five Party Agreement as well as to further the City’s economic interests. Assigning the gates to Southwest Airlines is the only clear way to achieve those objectives.
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Source: southwest - Google News http://ift.tt/1i2oM8i
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