Wright Is Wrong
Last week, the president signed a transportation bill that included a little relief for Dallas air travelers. We can now fly from Love Field, the small, convenient airport, to Kansas City and St. Louis (and, theoretically, anywhere else in Missouri). American Airlines, which fiercely opposes any change in the Wright Amendment, the bizarre federal law that dictates where planes can go from Love, was not pleased. Southwest Airlines, which has its headquarters at Love, said, "9 states down, 41 to go" and immediately started selling tickets to KC and St. Louis, with service starting next week. American, flying out of DFW, matched its prices. American also promises to start flights from Love, where it has three unused gates.
As Fort Worth Star-Telegram business reporter Mitchell Schnurman notes on his terrific blog, American's threats don't make a whole lot of sense as anything other than a temper tantrum.
I never thought it made much sense for American to take on Southwest at Love, considering AA's efficiencies and reach at D/FW. But American says too many of its best customers would opt for Love's closer-in location.
Maybe on trips to New York, Chicago or LA, but St. Louis and KC? My gut tells me there aren't that many Highland Park Platinum members in danger of being poached on those routes.
But AA is in a box now. It's been huffing and puffing about having to go to Love, and now it has to make good on the threat, even if it's for a single state.
Can American make money on this service? No way, unless it's indirect -- if it somehow helps keep Wright in place.
Schnurman's tough-minded coverage of the issue demonstrates the great virtues of distant newspaper owners. His paper is owned by Knight Ridder, which isn't entangled in local crony capitalism. The Dallas Morning News by contrast seems terrified to even voice an opinion on the issue. (And I'm not just annoyed that they turned down this piece on the grounds that they'd already run too much on the topic. In fact, I'm delighted. D Magazine paid me twice the DMN's rate, and I like them better anyway.)
Viewed up close, the whole Wright discussion demonstrates the wisdom of my old boss Bob Poole, who has spent at least two decades arguing for airport privatization. Locally, the only thing any politico seems to care about is what's good for DFW Airport and, secondarily, for the airlines. The traveling public doesn't count--either in the political equation (too diffuse) or, apparently, in airport management. Anyone who's had the misfortune of traveling through DFW knows that, with the exception of its new Terminal D, it's hardly a comfortable or accommodating place. Neither does it seem to maximize revenue. No mall developer would use space so pathetically.
Bob Poole isn't alone. When I interviewed Brookings Institution economist Cliff Winston for this NYT article on the Wright Amendment, he denounced the pernicious effects of government-owned airports. The debate over Wright, he said,
really exposes the weakness of our current public-sector provision of airport infrastructure, where this is allowed to happen--having DFW attempt to block something that would benefit consumers because [the airport] is not set up to be an effective competitor....
What is so troubling about airports is they simply have no experience or effective relationship with their customers, airlines. It's not like they work with these guys actively and say, "What can we do to attract you? What sort of things should we be doing?" It's all political:" What can we do to keep you happy in underwriting our bonds?" And usually what keeps them happy is keeping out other people from the airport. The whole incentive for you to develop an effective relationship between an airline and an airport to become more competitive and efficient is just not there. The incentives are basically to slap each other's back, to limit competition and keep a secure source of revenue.
Our conversation took place almost exactly a year ago. This week, DFW released a study demonstrating just how completely politicized its measures of "success" are. Stores and restaurants owned by women, minorities, and disabled people account for a higher percentage of total retail sales at DFW than at any other airport, just over half. As the Star Telegram reported:
Don O'Bannon, vice president of D/FW's small and emerging business department, said D/FW's success "far exceeds other competing hubs out there."...
"The moment we start talking about moving passengers out of D/FW to Love Field, I think you'll start to see a dramatic impact on concessionaires," he said. "It speaks volumes for what's going on and how important it is."
The airport had no comments on whether the traveling public is satisfied with the rather pathetic choices it offers. Why, after all, should it care? Paying customers aren't organized enough to exert political influence. Minority concessionaires, like Democratic Congresswoman Eddie Bernice Johnson (always identified in the press as representing Love Field, where she also has concession interests), do. I share Cliff Winston's disgust.
Full disclosure: The article I'm writing on pens is for Spirit, the Southwest Airlines magazine. If that sounds like a conflict, keep in mind that the magazine is published by a subsidiary of American Airlines. Weird. My real conflict is that I'm a consumer who would benefit enormously from repeal of the Wright Amendment.
The DMN's archive of Wright coverage is here.