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June 16, 2006 American Airlines and Southwest Airlines have agreed to end a long-running and bitter turf war that imposes restrictions on Southwest's flights from its home airport, Dallas Love Field, to most major cities, the airlines said on Thursday.
The carriers and local officials in Dallas and Fort Worth, Texas, struck a tentative compromise aimed at prompting congressional action to phase out a 27 year old law that imposes limits on direct Southwest flights from Love Field to several nearby states.
Southwest has sought a repeal of the law, the Wright Amendment, which was put in place to spur growth of Dallas-Fort Worth Airport, American's hub located just miles from Love Field.
As Southwest has grown from a successful regional carrier two decades ago to a national low-cost power, the effect of the restrictions have become more pronounced. Southwest has expanded operations in key markets and also faces stiffer competition from both traditional low-cost rivals and from bigger airlines that are transforming operations to be more nimble and efficient.
American long resisted the change and prevailed in a fierce lobbying effort last year when Congress did not take up Southwest's cause.
But Congress has been chipping away at the Wright Amendment, allowing exemptions for certain states, and key lawmakers said recently they would renew efforts for a full repeal of the measure.
Both carriers, in the end, believed it was better to craft a blueprint for Congress to consider than leave the details up to lawmakers. Key members of Congress wanted the parties to agree to a plan before they would consider a repeal.
"We're trading certainty for uncertainty with this agreement, and it will allow us to plan for the future," said Gary Kelly, Southwest's chief executive.
"The agreement includes terms to ensure its enforcement. Considering all the possible options, we believe this to be a pragmatic solution," Gerard Arpey, American's chairman and chief executive.
The agreement, if approved by Dallas and Fort Worth city councils and embraced by Congress, would limit long-haul flights from Love Field for another eight years.
In exchange, Southwest would immediately be able to sell single tickets for connecting flights out of Dallas, instead of continuing to force customers to buy two tickets -- one for each flight.
Love Field would be modernized but available gates would shrink from 32 to 20 four years after repeal of the Wright Amendment. Southwest would get 16 gates, up from 14 now. American would get two -- down from three now. Continental Airlines would continue to occupy two gates.
(Reuters)
June 16, 2006 American Airlines and Southwest Airlines have agreed to end a long-running and bitter turf war that imposes restrictions on Southwest's flights from its home airport, Dallas Love Field, to most major cities, the airlines said on Thursday.
The carriers and local officials in Dallas and Fort Worth, Texas, struck a tentative compromise aimed at prompting congressional action to phase out a 27 year old law that imposes limits on direct Southwest flights from Love Field to several nearby states.
Southwest has sought a repeal of the law, the Wright Amendment, which was put in place to spur growth of Dallas-Fort Worth Airport, American's hub located just miles from Love Field.
As Southwest has grown from a successful regional carrier two decades ago to a national low-cost power, the effect of the restrictions have become more pronounced. Southwest has expanded operations in key markets and also faces stiffer competition from both traditional low-cost rivals and from bigger airlines that are transforming operations to be more nimble and efficient.
American long resisted the change and prevailed in a fierce lobbying effort last year when Congress did not take up Southwest's cause.
But Congress has been chipping away at the Wright Amendment, allowing exemptions for certain states, and key lawmakers said recently they would renew efforts for a full repeal of the measure.
Both carriers, in the end, believed it was better to craft a blueprint for Congress to consider than leave the details up to lawmakers. Key members of Congress wanted the parties to agree to a plan before they would consider a repeal.
"We're trading certainty for uncertainty with this agreement, and it will allow us to plan for the future," said Gary Kelly, Southwest's chief executive.
"The agreement includes terms to ensure its enforcement. Considering all the possible options, we believe this to be a pragmatic solution," Gerard Arpey, American's chairman and chief executive.
The agreement, if approved by Dallas and Fort Worth city councils and embraced by Congress, would limit long-haul flights from Love Field for another eight years.
In exchange, Southwest would immediately be able to sell single tickets for connecting flights out of Dallas, instead of continuing to force customers to buy two tickets -- one for each flight.
Love Field would be modernized but available gates would shrink from 32 to 20 four years after repeal of the Wright Amendment. Southwest would get 16 gates, up from 14 now. American would get two -- down from three now. Continental Airlines would continue to occupy two gates.
(Reuters)