Friday, April 6, 2018

Dallas Love Field Airport gate probe dropped

FAA has withdrawn its investigation into whether the City of Dallas violated federal mandates in the long-simmering dispute over Delta Air Lines’ access to gates at Dallas Love Field Airport (DAL/KDAL).

DAL is located in the city of Dallas, whereas Dallas/Fort Worth International (DFW/KDFW), which is located about half way between the cities of Dallas and Fort Worth and is the home hub for American Airlines. DAL is the home base for Southwest Airlines.

At issue was whether Atlanta-based Delta’s request to keep operating at DAL must be accommodated by the city and Southwest or another leaseholder, even if all gate space is being used or is allocated for use at the space-constrained airport.

FAA said the decision to drop the probe was made “as part of a settlement agreement” following a 30-month investigation.

FAA’s notice of investigation opened in August 2015 and examined several issues, including whether leases in place at DAL complied with FAA’s Airport Improvement Program (AIP) grant requirements to ensure reasonable access and avoid providing “exclusive rights.”

The dispute grew out of changes at DAL related to the October 2013 expiration of the so-called Wright Amendment that—as part of encouraging growth at DFW—had restricted the length and states from which nonstop flights could operate out of DAL.

Related to that amendment expiration, a cap of 20 gates was placed on DAL, providing capacity for about 200 daily air carrier departures. Southwest got 16 gates, but had to agree to surrender one DAL gate for each gate it takes at DFW. As a result, Southwest chose not to serve DFW. Chicago-based United Airlines has two DAL gates, and subleases them to Southwest as part of a $120 million deal struck in early 2015. Alaska Airlines, via its acquisition of Virgin America, has the remaining two.

Delta, which returned to DAL in 2009, started by sub-leasing space at American gates. The gates were re-assigned to Virgin America as part of the American-US Airways merger. Virgin told Delta it would need all of its space, so Delta turned to other leaseholders, but was rebuffed. Delta then turned to the city, but officials told the carrier that they could not “force accommodation” by requiring leaseholders to surrender space they were using. Delta also went to the US Department of Transportation (DOT), which urged the stakeholders to work out their differences.

In October 2014, Delta struck a short-term deal to maintain its DAL services, leasing space at a United gate until early July 2015. In January 2015, Southwest reached its agreement on the two United gates, with Southwest assuming the remainder of United’s leases that run through September 2028. United rejected offers from Delta for the two gates—a move Delta said should have been reviewed more closely by city officials.

Dallas officials, unsure what to do, turned to the courts and requested that FAA and DOT be ordered to make the decision. The city's move triggered a spate of lawsuits, mostly pitting Delta against Southwest.

FAA’s determination that Dallas' handling of the situation did not put AIP grant money at risk does not end the legal wrangling. But it settles a key issue. It also appears to weaken Delta’s claims that two related DOT letters support the airline's position that it is entitled to ongoing access at DAL.

The city’s position is that DAL’s competitive situation is unique because of the Wright Amendment and so-called “five-party agreement” that, among other things, gives Southwest a majority of the gates at the airport, but at the cost of serving DFW. The agreement also maintains the Wright Amendment-era ban on international flights at DAL. Other carriers do not have Southwest’s level of access to DAL, but they also do not face the same stipulations tied to adding space at 165-gate DFW.

The case is scheduled go to trial in February 2019 if the two carriers do not reach agreement. Neither Delta nor Southwest will publicly discuss the case, and details on settlement talks have been kept confidential. DAL continues to operate five daily flights out of DAL’s gate 15—one of the two gates Southwest sub-leases from United.

(Sean Broderick - ATWOnline News)

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