The TSA and its ever disappointing act

May 26, 2016 on 3:31 pm | In Airline News, Airports, security | 2 Comments

So the TSA doesn’t have enough staff to manage itself appropriately at major airports and expects things to be particularly bad this summer.

Their go-to solution?  Dear Airlines:  Can you drop baggage fees?

Give me a break.  I hate baggage fees at least for the first bag checked and even I think that’s a stupid idea.  The revenue impact that has on the airline is so large that I would actually suggest it more economically smart for the airlines to just fork over money to the TSA to hire people instead.

The TSA hasn’t managed itself competently.  It has a long history of criminal behavior by its officers.   The agency has never competently staffed itself at many airports.

I am reminded of the year I spent one afternoon in San Francisco last fall.  I needed to change terminals at SFO and had to leave the security area to move from the International Terminal to Terminal 2.  That took about 3 hours primarily due to standing in line for security.

Was the hold up due to that many people?  Nope.  If you had staffed the other 4 scanning machines I would imagine that things would have proceeded in a timely manner.  But instead we had a 2.5 hour line wait at a major international airport on a Tuesday afternoon.

We don’t take security seriously and we don’t staff for it seriously.  We don’t even use all the money taxed for it.  Instead, we re-allocate taxes raised for security to reduce the deficit.

Care to guess who is responsible for that exceptionally anti-business move?  That would be the Republican led Congress.

When we don’t adequately staff something like this, it is a billion dollar impact to our economy.  We literally impede commerce within this country.  This isn’t about people who should just shut up and wait an extra 10 minutes before taking a trip to Disney World.

To the contrary, most air travel is business related and contributes heavily to our economy.

We should have a big problem with how travel is impeded in this country.  It’s not a “this is the wealthy” moment.  It’s a “this is an economic driver for this country” moment.  All too often we think the only people using the airlines and airports are the elite.  That’s just not true.  We think that only travelers are affected by what happens in our airline transportation network.  That’s not true either.

So what are you going to do about it?

 

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Southwest and Love Field Airport

January 21, 2016 on 3:32 pm | In Airports | No Comments

Southwest Airlines has filed notice of intent to appeal Judge Kinkeade’s ruling that Delta could continue to use gates at Love Field Airport.  Southwest says that Delta is tresspassing and Delta says Southwest has a monopoly and the City of Dallas was last seen taking the last train to Clarksville.

Love Field is a public airport.  I don’t expect it to be infinitely adjustable to all demands to use the facility.

I do, however, expect it to be more flexible to airlines than simply accomodating Southwest and Virgin America.  That’s a No Bueno moment.

We got here because Southwest got greedy, the City of Dallas refuses to push for more gates and American Airlines wants Southwest boxed in. This anti-competitive and a restraint to trade to many airlines.

So let’s turn Love Field into a private airport, sell it to Southwest for a reasonably low sum and let Southwest do what it wants.

Or even better, sell the airport to the highest  bidder and let them fight it out.  If Southwest doesn’t want the faclilty and has “Dallas fatigue”, then they can move over to the new facilities at DFW or even just walk away.

There is another alternative though. . . create more gates, have an annual auction for all gates and highest bidder gets unrestrained use for 1 year.

Things to think about in the airline industry.

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A pox on all of your houses

January 12, 2016 on 11:03 am | In Airports | No Comments

Love Field has been screwed up since Fort Worth Congressman Jim Wright decided to muck with issues involving Dallas Love Field and Dallas / Fort Worth airports.

And no one has had enough political courage to recognize a vastly different reality as compared to 35 years ago.

There is this myth that there is space at DFW airport.  There isn’t.  DFW airport can longer accommodate a major airline entering the marketplace at this time.  DFW airport admits it needs at least one more terminal and is beginning the very long, very arduous process of approving, designing and building a new terminal.

So, yeah, we should have that ready by 2030.

Love Field airport was capacity constrained the day the 5 Party Agreement to end the Wright Amendment was signed.  All of the parties knew it and all knew that they were kicking a can down the road.

And it took less than a year after the restrictions lifted for a major legal battle over access to the airport was begun.  A sure sign the deal was bad from the beginning.

A pox on the City for treating Love Field as a second cousin in the airport game.  Love Field isn’t a luxury and it has provided exceptional competition in the marketplace to lower fares.  Particularly after October 13, 2014.  All of the Dallas / Fort Worth area benefits because while Southwest, Virgin and Delta are driving prices down at Love Field, they’re also driving them down at DFW.  I know this because suddenly it is exceptionally cheaper for me to fly to places such as Portland, OR and Norfolk/Richmond, VA.  More than a hundred dollars less than it used to be.

This is the only market to see lower fares rather than higher fares in the last year.

A pox on Southwest Airlines for knowing that they were kicking that can down the road and then beating everyone up for not getting what they wanted.  Southwest signed the deal and knew the impact of the deal and still made the deal.  Now it would like the deal changed but it has resorted to bullying the City and other airlines in a courtroom.  Take some responsibility for agreeing to a bad deal and be a leader in solving the problem.

And not for nothing SWA, Love Field isn’t your own private airfield.

A pox on American Airlines for forcing such a deal when it had everything it needed already at DFW.  Your desire to constrain trade was so strong that you politically forced a deal that has hurt the city, hurt Fort Worth and hurt other major benefactors to the community (SWA and supporting industries).  That’s No Bueno and you could be a leader in getting this changed but you won’t.  You have your own airport and you’re damned if you’ll help a city or a sister airline in any way.

A particular pox on Aviation Director Mark Deubner for not identifying the risks and addressing them via the Dallas City Counil so as to not impede commerce at the airport.

A big pox on Fort Worth for clinging to the idea that inhibiting Love Field is what’s best for Fort Worth.  Major metropolitan areas have multiple airports.  It wouldn’t be so bad for you to fire up some flights into one and let’s talk about how you built Alliance Airport with the expectation that it could have “overflow” from DFW.  The fact of the matter is that Fort Worth is big enough to support a smaller airport with services.  Your insecurities against Dallas show up time and again in the airport game and it hurts the entire metroplex.

And lastly, a pox on both State and Congressional leadership in this area.  Who are you keeping happy?  This has been a legislatively botched compromise over and over again.  Bringing political solutions to a market area problem has resulted in a mess.  I am not a Republican and I am not a Democrat either.  I believe regulation is good but I believe political constraints on commerce for a single situation in this area is stupid.  Undo the stupid and allow the market forces to develop transportation responses according to genuine needs.

This is a metro area of nearly 7 million people and the only major metro area that is politically constrained by Congressional law in this way.  Let it go, things will work out and I promise you that the city of Fort Worth, a city of 1.8 million people, isn’t going to be forced to drive to Dallas to take an airplane ride.

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Whack-A-Mole: The Braniff Operations and Maintenance Building at Love Field

September 8, 2015 on 9:59 am | In Airline History, Airports | No Comments

 

“This is a very solid business deal that requires no money on the part of the city or airport.” – Mark Deubner -Director of Aviation (Love Field)

What Deubner doesn’t say is very important:

It isn’t necessarily the most favorable deal for the city.

Just weeks ago, a motion to do a deal with local car dealer Randall Reed on a lease for the old Braniff Operations and Maintenance building at Love Field was killed by the City of Dallas after a bizarre procedural discussion on how to do it.  Those involved felt that the deal had been killed for a while.

Instead, Director Mark Deubner has decided to insert himself even more into the deal and has a small group of Dallas Councilmen requesting a second bite at the apple to approve a lease deal.  Those councilmen are:

  • Deputy Mayor Pro Tem Erik Wilson
  • Lee Kleinman
  • Rick Callahan
  • Jennifer Staubach Gates
  • Monica Alonzo (who seems confused since she voted to quash the deal just moments ago)

These Councilmen are what I would refer to as the “Business Group” with notable developer (and daughter of Roger Staubach) Jennifer Staubach Gates included.

What will happen is that a motion to reconsider will be placed on the council agenda.  This will be a vote to once again take up debate on the issue and allow yet another vote to authorize a deal with Reed.

We find this suspicious and silly.  Suspicious because this a demand to have another bite at the apple at an alarming pace and without new information to consider.  It is effective a call for a “do-over”.  Silly because each time debate is engaged on this subject, no one ever gets truly warm to the idea of doing the deal.

Most bothersome is the seemingly urgent need to get a vote done on a property that arguably would be a anchor point for the east side of Love Field.  When such urgency seems to be exhibited without good reason, I get itchy.  The prime pusher of this deal is Mark Deubner and, at times, one would think he was more on the side of Randall Reed rather than the city.

Deubner is characteristic of a breed that believes because the word “Director” is in their title, everyone should really just shut up and do what he tells them to do.  (See quote above)  And usually without giving good economic reason.

There are other deals to consider such as a proposal by Flying Crown Land Group who not only has quite a bit of good detail in their plan but also has been barking at the front door to do a better economic deal since before Randall Reed popped up on the scene.

Mark Deubner ignored the Flying Crown Land Group steadfastly even when his brilliant idea was to simply raze the property and let Dallas Business Developers go at it.  His treatment of Flying Crown Land Group has been characterized as “hostile” and has found the Aviation Department treating FCLG with dismissive attitudes designed to ignore the enterprise.

And Deubner seems anxious to ensure that the Dallas City Council (and its Council Critters) remain as ignorant as possible of a federal lawsuit filed against Randall Reed for making off with Flying Crown Land Group’s proposal and ideas (they at one time were partnered to do the development together).

Even some of the proposals made under the Reed name contain images from the Flying Crown Land Group efforts.  (Reed’s group gained access when they partnered for a brief while with FCLG)

It’s alarming to me that that Deubner wants this deal so badly and despite a federal lawsuit naming both Reed and the City of Dallas (Deubner’s efforts at pushing this deal at this moment become exceptionally suspect in light of the lawsuit).  Does the City of Dallas really need to be named in yet another lawsuit surrounding Love Field because of arbitrary and unnecessary behaviors towards businesses who want to be located at the airport? (See the lawsuit filed by Delta Airlines against the City of Dallas, et al for access to the airport)

Lawsuits cost a lot of money and rarely end up in a win for those they are filed against.

When an agency acts as the Aviation Department does under the leadership of Deubner, I want to find out what the economic interests are and get some sunshine on the relationships that exist.  To date, that hasn’t happened.  Deubner has a fiduciary and civic responsibility to hear all appropriate proposals and forward credible ones for consideration.

Even the current proposal is suspect and, I feel, if many saw what was being claimed, eyes would raise more.  For example:

  • The Reed Plan claims job growth of 1,200 in Aviation, Office and Retail sectors
  • $65 Million in annual salaries
  • Aviation and Development/Growth
  • Furtherance of the Good Neighbor Plan Initiative
  • Historical Preservation

I strongly question that Reed’s plan to have a car dealership along with a fixed base aviation operation is going to yield 1,200 jobs as presented.  1,200 jobs requires quite a bit of intense business for a foot print that is simply not that big overall.  Consider how big your own employers are and their footprint in this area.

Furthermore, in an online story by Robert Wilonsky of the Dallas Morning  News, Randall Reed says:

“We’re adding no new traffic,” he says. “That’s what crazy. We’re moving an existing dealership to this location.”

How do you create 1,200 new jobs with a salary total of $65 million by moving existing businesses in to the property?

See what I mean about asking the right questions?

Aviation and Development Growth is good and doing something with this property within historical constraints would be even better for the airport.  How does a car dealership as the anchor business serve this interest?

Furthermore, how does a car dealership make it attractive for other supporting businesses such as restaurants, office space, etc?  It’s rare to see a car dealership co-exist with any other business but another car dealership.

Furtherance of the Good Neighbor Plan Initiative seems to be at odds with the fact that the local neighborhoods don’t want another car dealership.  They want quieter, less impactful businesses in that area.

On the issue of historical preservation . . . I just kind of choke at the idea that a car dealer owner such as Randall Reed really has interest in historical preservation.   Currently, only City of Dallas Landmark status can ensure that building isn’t inappropriately altered.  Today, it only has Federal status and the Reed group hasn’t been communicating with the Texas Historical Commission about its plans nor responding to that same agencies inquiries.

Doesn’t feel like someone who is interested in historical preservation, does it?

We’re at a point where it becomes necessary to realize a few things.

First, just because a Director of Aviation says a deal is a “solid” doesn’t mean its in the interests of the City of Dallas or its citizens or the local neighb0rhoods.  It just means that in his opinion, this is a deal to do.  Deubner has an already lackluster record of management within the city.

Second, public / private partnerships do work in the best interests of everyone far more often than not.  The proposal by Flying Crown Land Group is just that.  In fact, public / private partnerships almost always do yield optimum results for everyone including economic yield to the city.  This city doesn’t have a strong track record of getting the best of developers in deals.  More accurately, development deals done behind closed doors in the city usually have yielded mediocre results at best.

Third, despite Deubner’s insistence that this is the way deals are done, not so much.  When there is strong competing interests in developing properties, an RFP (Request for Proposal) is far more appropriate and never more so than when City property is involved.  How is the city harmed by taking competing proposals from competing developers and examining them in public?

Fourth, why does Deubner (and the City by extension) continue to ignore a proposal from a group with more experience in public/private partnerships and whose proposal makes historical preservation a centerpiece?

Want to hear the oddest part?  Flying Crown Land Group is a not for profit organization that has completed projects.  It doesn’t have an inherent profit motive.  We don’t want to hear this proposal?

I want to hear it.

I have seen many bad results from cities doing deal without sunshine on them but I have never seen a city deal go bad because it was done in the open.  I like business and I think that considering re-development proposals for the East side of Love Field Airport a great idea.  This very space would be worthy of consideration for expansion of flights out of the airport (and it was used for that very purpose by Legend Airlines in the past).

If Reed’s proposal is as firm, sound and smart as Aviation Director Deubner says, then it should be able to  withstand and win a RFP process as well.

And if it can’t, maybe that isn’t the deal the City should be making.

 

 

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Houston vs Dallas

June 30, 2014 on 1:58 pm | In Airports | No Comments

Recently, the mayor of Houston, Annise Parker was quoted as saying that Dallas and Houston do compete for international traffic and my only reaction was “Finally, someone willing to admit the truth.”

Both cities are large hubs and both are large gateway cities for the region.  For 40 years, the cities have worked furiously to ignore the fact that each desperately competes with the other for international flights.  In fact, until recently, I would have argued that Houston IAH had more diversity in its international operations than Dallas Fort Worth DFW.

I know for fact of many IT professionals working in the Dallas area under H-1B visas frequently go to Houston by car to travel home because it’s cheaper.

With Houston’s construction of an international terminal at Houston Hobby, it’s about to get even more competitive with Dallas.  For while Dallas Love Field will be unrestricted to domestic traffic in the 48 states, Houston Hobby will be unrestricted . . . completely.

Dallas / Fort Worth has never treated Southwest Airlines as a full partner in the community.  In fact, the metroplex area has always been willing to embrace the employment but never has been willing to truly work with Southwest to find out how to grow the airline in the DFW area.  American Airlines has had something to do with that.

This area is home to the biggest US Domestic Airline by passengers (Southwest) and the largest airline in the world (American Airlines) but Southwest gets very little Love.

Dallas doesn’t drive competition.  It doesn’t drive access and it doesn’t drive diversity in who serves it.  Houston always embraced both Continental and Southwest and worked hard to become attractive to a wide range of international airlines.  As a result, air fares from Houston to destinations inside and out of the United States are more competitive in general.

That’s a shame for the Dallas / Fort Worth area because I think it will continue to favor American Airlines and it will continue to restrict Southwest Airlines.  Love Field will be held in check from any growth because of the latest deal with the Devil (holding the terminal to 20 gates of which Southwest gets to hold 16 and which Southwest must give up gates if it wishes to use DFW. ) It’s a problem that few in the area are really aware of.

Yes, Houston and Dallas compete and Houston generally kicks Dallas’ ass on a regular basis.

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Virgin Gets The Gates

May 9, 2014 on 4:09 pm | In Airline Service, Airports | No Comments

Virgin America appears to be the winner of the 2 gates at Love Field according to numerous reports in Dallas media.  There is no official city announcement to date but reporters are citing two unnamed sources in the City Manager’s office confirming this outcome.  Dallas media is rarely wrong with such sources.

It’s an acceptable outcome for Dallas.  It won’t really increase competition in this marketplace very much except on a few long haul routes out of Dallas but it will be quite interesting to see the effect Virgin America has on those routes as I think it will provide justification for pursuing even more competition in the marketplace.

When I’m asked who I would like to see get those gates, that’s a tough question.  Frankly, after much thought I’ve begun to think that Dallas might have actually been best served with common use and better served by Delta Airlines or American Airlines flying out of those gates.

Let me make an announcement:  There is room in the DFW marketplace for a shorthaul provider using the Q400 or ATR72 to serve markets in the Texas regional area out of DFW.  In my opinion, you could very well make a killing with this airline.

Particularly if you base out of DFW.

From DFW, you could serve:  Houston (2 airports), Austin, San Antonio, Corpus Christi, Brownsville-Harlingen, McAllen, Abilene, Laredo, Midland-Odessa, El Paso, Lubbock, Amarillo, Little Rock, Fayetteville, Tulsa, Oklahoma City, Shreveport, Memphis, and New Orleans.

You can string together low frequency cities for a better load factor and you can do high frequency turns at larger city airports.  And you could probably do a deal with some of the other airlines serving DFW to interconnect.

Your seat costs would be superior, your weather would be more than acceptable and your price would make your competition whimper.

In the meantime, let’s be glad the The Great Gate Fight is over (we hope) and see what comes next.

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More on the gates: The City of Dallas blindly drives towards a brick wall

May 7, 2014 on 1:21 pm | In Airports, Mergers and Bankruptcy | 1 Comment

The City of Dallas promises a decision on the Love Field gates held by American Airlines at this time.  Their plan is to have a briefing on the LEK Consulting report, an executive session briefing by the City Attorney and then there will be an open discussion.

In my opinion, the City of Dallas is marching blindly towards major lawsuits from a number of parties.  The City Council has apparently chosen to believe that the sudden demand for these gates means they get to be the big players.

Careful what you ask for.  Airlines have vastly more powerful legal resources and the US Justice Department is never amused at amateur hour getting in the way of a Justice Department decision.

If Dallas chose to acknowledge the lease currently held by American Airlines and permit a reasonable sub-lease, it would be ironclad in its ability to withstand challenge.  Maintaining the status quo, so to speak was its safe and legally appropriate choice.

By choosing to dangle these gates around on the pretext of benefiting The Citizens, Dallas is opening itself up to at least 3 lawsuits by my count.  Lawsuits that will cost Dallas and find Dallas having to bow to a legal settlement that could well be far worse than the present proposed outcome by The Leaseholders (aka American Airlines).

Evidently Dallas has a lot of extra money laying around these days and doesn’t mind the costs to its citizens.  It has already spent $50,000 on consulting to expose itself to these (potential) lawsuits.

If the City of Dallas wishes to promote the welfare of its citizens in this airport, the City should publicly and strongly advocate for a (needed) expansion of Love Field with gates held for common use by all airlines (including Southwest) on a periodic auction basis (annual is best).  That’s what would best benefit the city and certainly that is a “best investment” for The Citizens.

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Dallas and The Gates

April 29, 2014 on 12:44 pm | In Airline News, Airports, Mergers and Bankruptcy | 1 Comment

The City of Dallas’ transportation committee met, deliberated behind doors and then decided to push the Love Field Gate Issue up to the full city council yesterday.  I noticed that one particular person was involved in the hiring of L.E.K. Consulting to determine who should get the gates:  Aviation Director Mark Deubner

Deubner seems intent on making a hash of managing Dallas Love Field in ways that go beyond the norm for this day and age.  Deubner is the same person who made a hash of the negotiations surrounding the Braniff Maintenence and Operations building on Lemmon Avenue last year.   It’s become quite clear that Dallas Love Field won’t be thriving under this man’s direction.

I think that the City of Dallas getting involved in this issue is going to backfire on the city in ways that City Council Members can’t entirely imagine.  First and foremost, it’s unwise to interfere with the United States Justice Department and the disposition of antitrust issues.  Second, the City Council has no legal standing to determine who gets those gets short of crazy arriving on the door step.

And Virgin America getting those gates isn’t crazy.

If the cities of this country want to control their airports better and do more for their local citizens (aka The Consumers), then they need to stop making long term, exclusive leases on gate space.  Auction it off on short term leases or control it on a flight by flight basis.  Keep your flexibility and sell your city like nobody’s business.

But you don’t get to make deals and then revisit just part of them.  If the City of Dallas attempts to control who gets those gates under the present circumstances, they’ll be a part to several lawsuits in which the only sure loser will be the City of Dallas.  And it will cost the city millions of dollars with zero possibility of an outcome that benefits its citizens (aka The Consumers.)

In fact, when Aviation Director Mark Deubner hired L.E.K. Consulting, he exposed the city to a lawsuit right there.  He forced the city into taking a position by virtue of asking a consulting company to establish what was best for the city when the city didn’t have any business asking that question at this point.

So, now it is entirely possible that even if the Dallas City Council leaves the issue alone and permits the gates to be sub-leased, other airlines may well sue the city because it doesn’t fit anyone else’s notion of what should happen.

If Mark Deubner had left things alone and the City of Dallas had left things alone, they would have been fairly protected and any outcome would have at least benefited the citizens (aka The Consumers) marginally more than the present situation.  Neutrality was the smart play here.  And an abiding desire to interfere on the part of City Management has exposed Dallas to consequences that will cost a great deal of money.

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City Consultants Point to Southwest

April 28, 2014 on 12:32 pm | In Airline Service, Airports, Mergers and Bankruptcy | No Comments

City of Dallas consultants, L.E.K. Consultants, has come out saying that it’s Southwest Airlines who should get the 2 American Airlines gates at Love Field Airport.  Their rationale boils down to the idea that Southwest will drive the most passenger traffic for the city and that is therefore the most economically sound justification.

Their criticism of the Virgin America lease is that it removes some flights from DFW airport and transfers them to Love Field.

You can’t look at this picture statically.  Driving passenger traffic isn’t necessarily what’s best for consumers.  It may well seem good for the city but it won’t necessarily be good for consumers.

As foolish as I think some of the Justice Departments moves have been in the AA bankruptcy, they aren’t incorrect in the idea that these things should drive competition and benefit consumers.

The consultants seem to be squarely aimed at the idea that what’s good for a business will be good for consumers.  I would disagree with that.

What Dallas has needed most for a long time is competition on a variety of long haul domestic routes in and out of Dallas to a variety of destinations.  Southwest will provide some of that sorely needed competition on October 13th.  And they will provide it regardless of whether or not they get those gates.

Virgin America will provide some of that competition too although I would argue that we could use a more creative and extensive LCC than Virgin America.

What is most needed at Love Field is . . . wait for it. . . . more gates.  20 gates just isn’t enough.  Absent more gates, Southwest should be relieved of its burden to give up gates to get gates at DFW.  The competitve landscape has changed and, unfortunately, that change occurred before the end of the Wright Amendment on October 13th.

But 20 gates at Love Field isn’t enough.  Chicago Midway serving as an adjunct airport very similar to Love Field has 43 gates.  Would I suggest that Love Field should have that many?  No.

But the airport cannot serve any other airlines very effectively despite being open to do so at this time.  6 to 10 additional gates would make sense at the airport.

Barring that, Southwest should not be required to give up gates in order to use gates at DFW airport.  In making the deal to lift the Wright Amendment, the parties involved essentially constrained Southwest Airlines from growth in the DFW area.  In fact, the deal was designed to penalize Southwest if it wanted to grow by using DFW airport.

Isn’t it time to quit taking swipes at Southwest for not moving out of Love Field Airport more than 35 years ago when DFW was opened?  Southwest is a huge employer in this area and a huge tax contributor and excellent corporate citizen.  Why do we want to exact revenge against the very kind of company we should want in our community?

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Virgin America at Love Field

April 25, 2014 on 11:41 am | In Airline Service, Airports, Mergers and Bankruptcy | No Comments

Well, in an unofficial official announcement by Virgin America at Love Field Airport in Dallas, Virgin America says it will get the two gates at Love Field.  The airline says it has approval from the Justice Department and American Airlines and needs only to get approval from the City of Dallas.

And I think they will get such approval, too.  Strangely, the City of Dallas has never treated Southwest Airlines with the deference you might expect.  Furthermore, I have long thought that giving the gates to Southwest (legal or not) was probably a step too far in creating an airport monopoly for a single airline.

Is Virgin America the right candidate?  I kind of think not.

I think that they are supported by the Justice Department because they favor LCC carriers and Virgin America purports to be that.

I think they are supported by American Airlines because they are a weak(ish) competitor to American Airlines.

Virgin America will only offer flights that are long haul and to major destinations such as San Francisco, Los Angeles and New York.  They might get a few flights in to Chicago, a route so dominated by American Airlines that they have near hourly flights.

American likely saw Virgin as having the least impact to them in the market.  If that’s true, then it probably isn’t that good for consumers in the DFW area.

Virgin America will be good for people who want to fly to Los Angeles, San Francisco, New York, Washington D.C. and Chicago.   It’s notable that AA is the powerhouse on all of those routes while Southwest Airlines will be starting similar routes out of Love Field on October 13 of this year.

But the frequencies will be low enough that it is unlikely to have impact on fares, I think.  To the contrary, I think that this is great for Virgin America as they will experience high yields from these routes as a result of the other two airlines maintaining course.

And this decision could drive me to write yet one more article on why we should auction off gates and slots at airports that are constrained.

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Delta wants some Love

December 16, 2013 on 3:14 pm | In Airline Service, Airports | No Comments

According to the Dallas Morning News, Delta Airlines has released a schedule that now includes October 2014 and apparently Delta expects to fly a massive number of flights from Love Field to its own hubs.  By massive, it would appear that Delta has 22 flights to its hubs in Atlanta, Detroit, Minneapolis/St. Paul, New York La Guardia and Los Angeles.  The only two cities missing are Salt Lake City and Seattle.

Delta wants to use the American Airlines gates at Love Field that it rents today for those flights.  22 flights from 2 gates seems a touch optimistic so I do wonder if Delta has something else up its sleeve.

Southwest has 16 gates and no one is entirely sure if they can have more than that.  American Airlines has 2 gates and United has 2 gates.  According to restrictions put in place in winding down the Wright Amendment, no more gates are supposed to be built.  The real shame of that is that there are several gates across the tarmac from the main terminal originally built for Legend Airlines that would be exceptional for use in a Delta operation.

The City of Dallas and the airport authorities don’t want to allow expansion at Love Field.  They want traffic to be focused on DFW airport but . . . DFW airport is actually pretty full at this point.  There will be a few gates at DFW available for use once Terminal E is renovated but not many and they’ll go quickly.

So why not open up Love Field even more?  I wonder if Delta isn’t planning to sue for more access myself.

In the meantime, let’s ponder for a minute the chance to fly Delta to its hubs from Love Field airport in less than a year.

That’s what I meant by Change, It’s coming.

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Change, it’s coming

December 15, 2013 on 11:37 am | In Airline News, Airline Service, Airports, Mergers and Bankruptcy | No Comments

With the US Airways / American Airlines merger done this past week, everyone is speculating on change we can expect but in the Dallas / Fort Worth area, I think we can expect change in at least 4 different areas and it’s all good for those in this metropolitan area.

1)  American Airlines will slowly return to being the on-time, service oriented airline that it once was.  Parker & Company know how to fix operational issues and get planes going where they need to go.  I also think we’ll see the benefit of code-share flights through the system to destinations that might well yield lower prices.

2)  Southwest Airlines will be unchained on October 13, 2014.  On that day, Southwest can fly where it wants to from Dallas Love Field as long as it is in the domestic 48 states.  This will not only offer us opportunities to fly non-stop to major cities in the US but it will also put some competitive pressure on American Airlines (and other airlines) on routes to and from the DFW area.

3)  Ultra Low Cost Carriers will move quickly to find their toehold at DFW.  There is a lot of low-hanging fruit to be had in this area and Spirit Airlines has figured that out.  I expect Spirit, Allegiant and Frontier to all try to get gate space and establish operations in this area.  Those ULCC airlines will put some competitive pressure on both American Airlines and Southwest Airlines who both could use it in this area.

4)  While I think United has missed a huge opportunity in the DFW area over the past 2 years, I have noticed that Delta hasn’t.  I expect Delta to work itself more and more into the DFW area and I think they will do this both at DFW and Love Field airports.  Delta has been doing very well at establishing point to point flights and encroaching on its competitors territory.  They pursue a modest push into markets with the resources that only an airline such as Delta has.

Most airlines know that there is a limited time left to encroach in this market and if you think that airlines executives aren’t worried about Doug Parker, you are only kidding yourself.  They know what Parker and his team can do with the resources that AA has and that is a big reason why many attempted to sabotage this particular merger.  Parker was never a great threat with US Airways because of the limitations it imposed on him and his team.

I said it two years ago and I’ll say it now:  As soon as American Airlines declared bankruptcy, that was the time to move hard into the DFW area.  Several airlines missed that opportunity to become entrenched (Virgin America and jetBlue) and some saw the opportunity and grabbed it solidly in their fists (Spirit and Delta).

It’s all good for those living in this area or those wanting to fly to this area.  In one year, I believe we will see much better services and air fares that remain competitive.  Don’t kid yourself, however, those air fares won’t be predatory.  They just won’t be exorbitant.  So if you’re waiting for an uber-bargain of the early 2000′s, your wait will be fruitless.

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Love Field Gates

November 16, 2013 on 2:00 am | In Airline News, Airports, Mergers and Bankruptcy | No Comments

Delta wants to take over American Airlines’ gates at Love Field Airport in the worst way.  They say they can run 18 flights a day to major Delta hubs and put operations in place quickly to do so.  Delta argues that it can provide very real, substantive competition at the airport.

Southwest, of course, wants the gates as well.

No doubt others will throw their hats into the ring too.

In less than a year, airlines will be able to operate unrestricted domestic flights from Dallas Love Field to anywhere in the continental United States.  That’s a big market for Dallas suddenly.

But the DoJ wants to foster LCC participation in these give ups and that would preclude Delta (and Southwest, in my opinion) as well as other “legacy” carriers from obtaining those gates.

This is why I think that any airline who has less than 20 percent market participation at an airport ought to be able to have a chance to acquire those gates at Love Field and elsewhere.  It invites the most qualified new entrant.

What Dallas doesn’t need is a ULCC carrier flying into Love Field airport a couple of times a day.  What Dallas *does* need is real competition which an airline such as Delta could provide in very real terms today.

That’s very attractive to me, a person who lives in Dallas.  This city doesn’t have much competition.  It has American Airlines who dominates DFW in a way that dwarfs the dominance at Washington Reagan National that US Airways enjoys.  It has Southwest who dominates Love Field in an even greater way.

So, yeah, real competition from a real, national network airline who can offer real price competition is an attractive idea.

So, let’s not preclude “legacy” airlines.

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Southwest’s Gates

October 31, 2013 on 1:00 am | In Airports | 5 Comments

Southwest Airlines will have 16 gates to operate from at Love Field when the Wright Amendment evaporates on October 13, 2014 of next year. CEO Gary Kelly says that should be more than enough and envisions each gate handling as much as 10 flights per day. Some believe that the 737-800 will take more time at gates than the 737-700.

First of all, let’s not kid ourselves. Southwest isn’t boarding people nearly as fast as it once did and 10 flights per gate seems very optimistic to me in the present day Southwest world.

The 737-800 definitely will take more time at gates and, at the same time, I’m fairly sure we won’t see the 737-800 at every gate either. This is Dallas, a city inside Texas and if you think that the airline is going to cut flights to Houston, Austin and San Antonio, you’re kidding yourself. Those flights will be served by the 737-700s.

The truth is that I don’t think 16 gates is enough and I think the 20 gate limit at Love Field is stupid. The market can demand more and these limits at Love Field are a continuous fail for the region.

That said, I expect that Southwest will get started, show success and argue in the future for more gates. How many more? I’ve long noticed that the new terminal is certainly not limited in space and could add as many as 10 more gates, at my best guess.

I think that Southwest Airlines decided to get the deal, prove itself and ask for more later. Not an unsuccessful strategy.

And speaking of Love Field, has anyone looked at their website lately?  This is, without a doubt, one of the worst around.  And it supports an airport at a major city in the US.   Midland-Odessa’s website is better than Love Fields’ own site.

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Stop thinking SWA should run Atlanta like Airtran

October 26, 2013 on 1:00 am | In Airline News, Airports | No Comments

There have been criticisms of how Southwest has played its game in Atlanta compared to how Airtran was working in Atlanta for quite some time.  The obvious comparison that has been made has been departures.

Airtran had a lot of departures out of Atlanta and those have been reduced over time by Southwest as it absorbs Atlanta into its schedule.

Airtran ran its Atlanta operation like a hub and that does mean lots of departures.  If that’s your hub, you want flights going everywhere.  Going everywhere means lots of flights.

Southwest runs focus cities that are connected with many point to point flights.  This means fewer flights.

Southwest knows what it is doing in Atlanta and its transition in Atlanta is about gaining access to business travelers in a market it was shut out from until its purchase of Airtran.  Atlanta will probably gain flights over time at a very moderate pace as Southwest identifies more opportunities.

But Atlanta is not going to be a hub under Southwest.

 

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Southwest wants DC and NYC slots

October 25, 2013 on 1:00 am | In Airline News, Airports | No Comments

Southwest Airlines CEO made it clear during an earnings call that Southwest believes that should there be a merger between US Airways and American Airlines, that slots in both the New York City and Washington D.C. areas should be made available by the combined airline.  And Southwest wants those slots.

In the most recent give-up by US Airways at Reagan National about 2 years ago, jetBlue won the auction for those slots.  jetBlue paid $40 million for just 16 slots.

Southwest has lost several bidding wars for assets over the last several years.  Bidding wars that even today I would argue it should have won by being just a touch more aggressive.  Southwest tends to want a “deal”  much like it got with asset purchases from ATA many years ago.

Those deals don’t exist anymore.  Premiums are paid for such assets and whether we like it or not, the price of entry in those markets is very high.

So, is Southwest prepared to pay to play in those markets?  I think it will.  Southwest’s business strategy has changed over the past 2 years and has an increasing focus on winning business travel.  To do that, it needs more penetration in markets such as New York City and Washington D.C.

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Hong Kong, Shanghai, Oh My

October 17, 2013 on 1:00 am | In Airline Fleets, Airline Service, Airports | 2 Comments

American Airlines has announced that it is adding two new routes from DFW to Hong Kong and Shanghai and has done so with great fanfare.

The Shanghai route will use American’s 777-200ER but the Hong Kong route will make use of AA’s newest 777, the 777-300ER.

When American Airlines ordered the 777-300ER a few years ago, it felt like a very, very good decision.  In fact, in some ways it simply defied imagination that AA was the US airline that finally decided to buy the -300ER (none had done so at that time and none have made such an order today.)

I’m a fervent believer that international routes will trend towards longer, thinner routes.  I do not believe that either the 747 or the A380 has a very strong place in the airline world today.  But I also think that the 777 fits neatly into that high capacity, long route structure that so many airlines are using to make big money from.

And American is clearly doing very, very well using the -300ER.  So well that one does wonder at the reticence to purchase being shown by both United and Delta.  Yes, each still has the 747-400 and I would argue that neither is well served by that aircraft.  Particularly in light of the age and the changing structure of routes.

So let’s celebrate something that you hear  very rarely from me:  Congratulations to American Airlines for a very wise decision.

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One thing that has gotten better

October 16, 2013 on 1:00 am | In Airports | No Comments

I am awfully critical of the airline industry most of the time.  The truth is, I see so much room for improvement and so much room for more profit, it often drives me crazy to see the short sighted decision making that exists in the industry.

I continue to tell people that doing something well costs about as much as doing something poorly.  If that’s true, why not do it well?

But there is one area in the travel world where I think things have gotten better.  Way better.

Airports.  Not all airports but many have vastly improved themselves into places that are relatively helpful, navigable and service oriented.

Some are even coveted destinations (Portland, OR for isntance).

When I pass through airports, I’m often struck by how much easier it is for someone to buy what they need on the fly whether its food, coffee or an iPhone charger.  The convenience is far greater.  The selections are far greater.

Food has improved and reached the point where most of my criticism lies with the cost (which I find artificially high provide kickbacks to the airport) and the service (sometimes).  The service often suffers in an otherwise well done restaurant because airports still think they have to award monolithic concession contracts to large companies such as ARAmark instead of becoming more inviting towards the unique.

I would point out that some of the very best airports are ones that embrace their locale and which invite local gems to become part of their airport environment (Portland!).

Airports are much better.  Many are improving their parking and somewhat cooperating with off-premises parking establishments as well.

Mind you, some airports have an enormous distance to go, too.  Newark comes to mind, for one.  Philadelphia too.  Some airports are behaving, still, like they have a captive market and really don’t need to make improvements.  Those airports will be surprised at the effect they have on their local economies as the future evolves.

But I am pleased to see that airports have improved so much over the last 20 years.  I’m also pleased that they appear focused on a better service delivery and that goes a long way towards making an airport an appealing prospect.

 

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Southwest Starts Countdown

October 14, 2013 on 1:00 am | In Airline News, Airports | No Comments

Southwest Airlines has started a countdown to October 13th, 2014, the end of the Wright Amendment and the beginning of Southwest’s ability to fly non-stop to wherever it wants in the continental United States.

Personally, I’m going to treat it as a countdown to my mother’s birthday (which is the same day).

My best guess on flights Southwest launches that day:

  • Chicago
  • Los Angeles
  • Portland
  • Atlanta
  • Baltimore
  • Newark
  • Phoenix

I know you’re surprised I put Portland on that list  but I do think it will become an immediate flight.  The fares on that route today are sky high with no competition.  American Airlines flies that route with 4 flights a day and Alaska Airlines has one flight a day as well.  This is a route I feel certain SWA will pick as low hanging fruit unless something happens to that city pair in the meantime.

October 13, 2014 will be a very big day in Dallas.

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Who says there is no competition among airlines anymore?

October 7, 2013 on 11:57 am | In Airline News, Airports | No Comments

United Airlines has announced routes into the fortress hubs of Delta just days after Delta announced flights into UA fortress hubs.  United is adding routes from both Los Angeles and San Francisco to Minneapolis / St. Paul and Atlanta.

Delta previous announced routes from Seattle (which is nearing “hub” status for Delta) to Los Angeles and San Francisco.

First, Los Angeles is actually no ones hub but it is a strong focus city for all.  Los Angeles serves as a major gateway city for airlines and just like New York City, everyone wants to be dominant there.  A few years ago, American Airlines spoke of Los Angeles being a part of its “corners” strategy.  More recently, Delta has been building its operations up there.

Los Angeles won’t be anyone’s hub because it isn’t suited to such operations.  It will, however act as a gateway city with significant focus city operations just as New York JFK and Newark airports serve the same role in that area.

There is a lot of first class and business class traffic in the Los Angeles area and everyone wants a larger piece of it.  Delta is ready to battle it out with United in that market and United is responding.

The two SuperLegacy airlines will trade more and more blows with each other but neither will gain advantage much over the other.  However, both will gain advantage over the smaller airlines in those markets such as American Airlines, US Airways and LCC carriers.

The one airline who can hold their own in those cities is Southwest Airlines.  They are the equal of UA and Delta from a domestic point of view.

These route announcements are just one more sign of the power the two largest airlines both have and which they will wield to gain advantage in the marketplace.

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