Why the end of the Wright Amendment helps Southwest

Teresa Cederholm - Author
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Nov. 20 2020, Updated 12:15 p.m. ET

Wright Amendment no more at Dallas Love Field 

The Wright Amendment, a federal law imposed in 1979, limited nonstop service from Dallas Love Field airport (or DAL) to cities within Texas and neighboring states. The purpose of the law was to prevent competition between the newly built Dallas/Fort Worth International Airport (or DFW) and DAL. On October 13, 2014, the amendment was repealed, allowing airlines to fly from DAL to any city in America.

The major U.S. carriers affected most by this development are Southwest Airlines, which is based at DAL, American Airlines, which is based at DFW, and Virgin America, which switched to DAL from DFW.

Control of Dallas Love Field gates

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Out of the 20 gates at the airport, sixteen are controlled by Southwest, two are leased by American, and two by United Continental. Southwest is also allowed to use one of United’s gates. Two American Airline gates that were sub-leased to Delta now belong to Virgin America under the terms of the Department of Justice allowing American to merge with U.S. Airways. Delta will no longer have any gates at the airport.

For more details on the slot sale, read the article, Why the American and U.S. Airways merger was conditional.

The iShares Dow Jones Transportation Average ETF (IYT) and the SPDR Series Trust ETF (XTN) hold some of the top stocks for U.S. airlines, including Delta Air Lines, Inc. (DAL), United Continental Holdings Inc (UAL), American Airlines Group Inc. (AAL), Southwest Airlines Co. (LUV), and JetBlue Airways Corporation (JBLU).

Lower air fares

The increased capacity and competition at DAL airport resulting from the new routes should mean lower airfares for customers. According to data compiled by Farecompare.com, the repeal of the Wright Amendment will lower fares at DAL by 45% compared to 2004. The chart above shows a sample of airfare changes for flights between DAL and Baltimore, Los Angeles, and Washington, D.C.

Route additions by Southwest

A total of 17 new destinations will be added to Southwest’s network. This increases the total number of nonstop destinations out of DAL by more than double, to 33 from only 16 destinations earlier.

With the repeal of the Wright Amendment on October 13, 2014, the company immediately launched nonstop flights to seven destinations and added 22 daily departures to DAL. This was the largest single-day expansion in Southwest’s history. The company reported that load factors on these 22 departures were more than 90%.

The seven new destinations include Denver, Chicago, Baltimore, Washington, D.C., Las Vegas, Los Angeles, and Orlando. The airline plans to launch another eight routes in November to Phoenix, Orange County, San Diego, Tampa Bay, Ft. Lauderdale, New York City, Atlanta, and Nashville. In January 2015, San Francsisco and Oakland will be added.

 

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