Branson wants to try and sway Dallas for DAL gates

[WNMECH]

http://www.dallascityhall.com/committee_briefings/briefings0414/TTRC_LoveFieldGateLeases_042814.pdf
 
This is a link to the study commissioned by the City Of Dallas.
The cases presented in both studys are pretty strong for WN.
 
If it were not for the recent DOJ pressure on the Dallas City Manager, I would give WN the advantage.
 
However I now think Virgin has over a 95% chance at these gates. A real long shot for WN even with these reports.

 

[eolesen]

The DOJ's letter indicates they've pivoted slightly from the original settlement. They've said that it's OK to pursue a path by which AA doesn't relinquish the lease, and that DOJ is satisfied that they'll be in compliance with the intent of the settlement by executing subleases.

It's an interesting twist, to say the least. The City has no grounds to terminate AA's lease, nor does the DOJ seem interested in forcing the issue. It really lets the City off the hook with regard to DL and WN's arguments. If the lease isn't terminated or assigned, the possibility of those gates reverting to City control is a moot point.

Taking it a step further...

Since DOJ is taking the position that AA's lease doesn't have to be force terminated, the City is now bound by the terms of that lease, which require them to consider a valid sublease agreement on the same basis they've considered past subleases (which has essentially to approve them without hesitation).

Assuming a sublease between AA and VX is ultimately approved, it's not entirely clear how that affects DL's or Seaport's existing subleases with AA.

Could all three carriers be accommodated on two gates?

I'm not going to waste the time tonight working out a gating chart, but if DL and K5 stick with their current patterns of service, and VX trims back a couple flights in the process, it might be possible.

The larger point in all this...... DOJ just gave the City a way out, one which only requires them to maintain the status quo. In doing so, they've diffused any chance of a lawsuits by DL and WN for the time being. You can't sue over the disposal of an asset that isn't being disposed of.

At least until AA's lease expires in 2028, although they have the option to exit it in 2018 under certain conditions.

Something else to consider... The Settlement with the DOJ is only in effect until November 2023 (ten years). At that point, AA would have the rights to start using those gates again, and neither VX, WN or DL could prevent it.

 

[WorldTraveler]

The DOJ "would appreciate..."

In other words, they don't have any standing in the assignment of gates an airport.

they aren't requiring because they can't run over all of the rules of space allocation at US airports which have long been in place and which they didn't bother to understand when they stuck their nose into the case.

this is the same DOJ that said just a few weeks before the settlement that they didn't have time to prepare for the case against AA/US.

Virgin likely will get access but the DOJ cannot block other carriers including DL from the process regardless of whatever reasons it wants to use.

If there is gate space leftover, WN is free to use it. The DOJ did get right that based on antitrust laws, WN is the last candidate to get further gates as long as any other carrier has interest.

And unless the city of Dallas has a viable plan for common use gates that aren't completely occupied in this phase of expansion at DAL, they will be going thru the same process over and over.
It's interesting that WN now wants to argue that the City is the right place for the decision to be made while arguing for months that the DOJ was right. DL said the City was the right revenue and in fact says the DOJ now no longer has ANY input in the decision regarding reassignment of gates because the merger case is closed and the DOJ cannot supersede existing laws about airport access.

WN does think it can win the argument in City hall against DL, but only if they ignore the requirement to accommodate other carriers - which is why they and others will argue that DL should not be accommodated, or if they are, with the scraps of what won't fit alongside the schedules of other airlines.

WN quite simply was allowed to have too many gates at an airport that anyone who understands the market knows is too much in demand relative to the small amount of capacity to handle it.

WN's hub, headquarters, economic impact or anything else has nothing to do with what they can have additional gates vs. other carriers. IN fact the mere fact that they have a hub there is problematic. They will connect thousands of passengers who have no interest at all in being at DAL when there is no space to accommodate other entrants.

Other airline hubs are built at airports that have enough gates to accommodate other carriers. that is the nature of what lots of air service does - it creates demand for more. And the US says that in the marketplace, more competitors are better. WN strategically failed to think thru the implications of sitting on gates at an airport hoping they could dominate that airport to the exclusion of others.

No other WN hub or large focus airport has as few gates as DAL has or has as high of a percentage of gates occupied by WN to the exclusion of other carriers.

WN can stomp its feet all it want and talk about all the economic impact it can have on the community - and then take that argument several miles to the NW and use gates at DFW.

DAL and DFW by WN's own accounting are one market and there is no reason why WN needs gates to carry connecting passengers at an airport as valuable as they are when DFW has plenty of gates and a plan to add more.

Further if you want to argue about the best use of gates in terms of moving passengers, UA and Seaport don't compare as favorably with DL.

But the argument isn't valid and if it is, then DL and other legacies can start arguing that they can better use gates in other congested airports than the low fare carriers do - in part because they can use the power of their hubs to move people. The LCCs really don't want to go down the argument about who can most efficiently use national air system assets because they will lose.

VX and DL will both be at DAL with more than just the scraps of a few flights stuck between other carriers. WN will be able to add more flights on gates outside of its 16, if and only if the other carriers' flights can be accommodated on the remaining gates and not have to spill over onto WN's gates and only until the next airline comes along and demands access

 

[700UW]

So where did you get you Jurists Doctorate?

 

[eolesen]

WT is absolutely wrong in his statement about "Other airline hubs are built at airports that have enough gates to accommodate other carriers."

LAX, DAL, DCA, LGB, SNA, LHR, NRT, and HND are prime examples of limited access airports. All of them save SNA are considered hubs by at least one airline.

Perhaps it's time for WT to focus less on speculation and how he believes it should play out, but the facts appear to be working against everything he's projected over the past five months.

"Would appreciate" is not an indication of standing. It's a professional courtesy. This wasn't an order, but simply a clarification of how the DOJ is interpreting the City's obligations in light of the settlement and subsequent court orders that were issued in relation to it.

It's a fact that as long as AA has a lease, they have the legal right to sublease as they see fit. It's not the City's place to block how they use their asset, provided it's not contrary to the terms of the lease.

Facts, WT. Not speculation or projection.

 

[WorldTraveler]

tell me which of those airports have only 20 gates to serve a region as large as they serve.

Yes, other airlines have located hubs at airports that are capable of handling them.

AA signed away its right to operate from DAL. There are ample legal reasons why the city of Dallas has a right to refuse to transfer the lease or gain money from the divestiture given that there are laws which require DAL to accommodate new entrants.

It isn't the fault of every other airline that WN chose to set up a hub at an airport where it also agreed to allow the number of gates to be cut dramatically in order to fly longhaul domestic flights.

The airport won't grow. There is no doubt about that.

What is very much in doubt are WN's plans to dominate an airport under the guise that it is in the same region as another airport that it chose to pass on.

The correct solution should have been that AA had never been required to divest gates at DAL, that any airline should be free to serve DAL to the extent they want to, and that WN should be free to start service at DFW without the loss of any ability to use gates at DAL.

It's time to fix the real problem which has been a protectionistic environment which exists in N. Texas and which the DOJ is only perpetuating rather than forcing real change.

Texas won't fix it because it is counter to local interests. But Texas airlines should not be surprised if other states start taking punitive actions against routes that operate to/from DAL against the interests of airlines that have large operations in those other states but which cannot gain access to DAL.

The problem, as much as AA and WN want to believe otherwise, will not go away.

The issue of DAL will be escalated to the highest levels of US government if a viable solution cannot be found to protect national and not just local or parochial interests.

For the record, I don't think that will be necessary but no one should underestimate the significance of the decision that DAL faces.

 

[eolesen]

AA signed away its right to operate from DAL. There are ample legal reasons why the city of Dallas has a right to refuse to transfer the lease or gain money from the divestiture given that there are laws which require DAL to accommodate new entrants.

Uh, no. AA signed away its rights to operate from DAL for the term of the settlement order.

That's 10 years. Yet, their lease extends beyond that timeframe. If the situation were reversed... nobody wanted the gates, and AA wanted to get out of their lease, you can bet your widget that the City would be holding firm on the lease term.

Texas won't fix it because it is counter to local interests. But Texas airlines should not be surprised if other states start taking punitive actions against routes that operate to/from DAL against the interests of airlines that have large operations in those other states but which cannot gain access to DAL.

Ah, other states taking action because a local authority wants to have a say over their own real estate?.... Good luck with that.

Maybe Texas should sue Georgia in return for having blocked a second airport in Atlanta?...

The issue of DAL will be escalated to the highest levels of US government if a viable solution cannot be found to protect national and not just local or parochial interests.

This isn't a matter of national significance no matter how you'd like to spin it...

With the DOJ's clarification, the issue has been reduced to a matter of whether or not outside interests have the right to redefine the terms of a standard lease agreement that the City and AA signed in 2008.

Last I checked, third parties don't get to interfere in a contract between two parties which doesn't violate any laws.

AA's been a good tenant. They could have rejected the lease in bankruptcy, and didn't. They affirmed it long before the merger talk began in earnest.

It's now time for the City to hold up to their end of the lease. As long as Virgin isn't somehow unfit to provide air service to the City, the City's approval of the sublease can't be unreasonably withheld.

 

[WorldTraveler]

yes, as much as you want to think otherwise, federal airports are part of the NATIONAL transportation system and subject to federal laws.

The City of Dallas is also expressing concern about UA's relatively light use of their gates.

I still believe that the outcome will be that Virgin and Delta both will add significant amounts of flying close to their original proposals, WN will get any scraps that might be left over, and then be subject to giving up what they have in the future should someone else come along.

The irony is that unless DAL turns all of the gates into common use, there is every basis for future applicants to argue that they must be accommodated.

If even space for 3 flights/day is retained at the 4 non-WN gates, the city will have fulfilled its federal obligations to accommodate future new entrants.

And by the time that AA can return to DAL, WN will be at DFW. I think you can count on that.

And it doesn't take a rocket scientist to realize that AA and WN both want to stop DL from serving both Dallas airports just as they do in Houston and Chicago as they legally have the right to do so. Given that DL is the dominant airline to each of their hubs - and have a healthy share of even the LGA and/or JFK markets which they only serve from one of those airports in those cities, AA and WN don't really want to see a competitor be able to serve both airports.

The DOJ's artificial division of the markets won't hold water if pushed into court esp. when they choose to separate BWI from the Washington area airports.
Further WN's attempts to focus on gates has nothing to do with the ability to serve the local market which WN does very effectively even from the combined N. Texas market despite not being able to serve most markets from DAL right now.

They (WN) realize they aren't going to get as much of DAL as they thought they would and will quickly move to the next step which is to get the 2006 restrictions removed.

 

[WorldTraveler]

here are city of Dallas official's comments about the study that was done which WN is touting - and probably explains why Gary Kelly is now in hyper mode to take the conversation back into WN's hands - as well as regarding UA's gates.

He also criticized an outside consultant’s study which concluded that Southwest Airlines offered the most benefits to Dallas if it got the gates.

“I’m concerned about that study because I think it represents profoundly backward-looking thinking,” Kingston said. “That’s $50,000 down the toilet as far as I can tell.”

Rawlings, while noting that “this is a serious matter and kind of somber,” said that “we should be doing high fives. Congratulations to the city of Dallas. We’re growing. We’ve got hot properties.”

More than gates, the city of Dallas needs to make sure that airlines maximize the use for the most takeoff and landings, the mayor said. He pointed in particular to United Airlines, which holds the lease on two gates in the new 20-gate terminal

“I’m disappointed on what’s happening from the United gates. They’re not using the landing slots. We have three airlines that want to come in here and do this and we’ve got to figure out to make that happen,” Rawlings said.


the City of Dallas recognizes they need to use the facilities they do have to the maximum use and accommodate as much traffic from as many carriers as want to serve the airport.

This appears to be heading toward a more balanced outcome than either AA, WN, Virgin, or the DOJ has wanted.

It isn't and shouldn't be "winner takes all to the exclusion of everyone else."

 

[eolesen]

DAL is not a Federal asset. It's a City asset. The fact that the Feds put money into the infrastructure doesn't change who ultimately owns the real estate.

I was probably the first one here to suggest that DL be accommodated on the UA gates. UA's been remarkably absent from the grandstanding, and I'm growing more convinced they have no intention of adding any further services.

You seem to think that AA really cares about the outcome.

All they've ever cared about was ticking the box on the settlement order.

The only parties who've made a big deal out of this are WN, DL, and VX.

 

[WorldTraveler]

really?

nearly all US airports are federally funded and thus meet federal airport access requirements.

Have you actually read the 2006 agreement and what it says about the requirement to accommodate other carriers that wish to serve the airport?

Don't worry, though. The City of Dallas has read it and has already read the DL letter. They didn't call it a waste of time.

They know what they have to do to comply with federal requirements and will do so.

AA will figure out how to compete from DFW against the carriers who are at DAL. Just happens that DL will be one of them.
and you are right that, as long as AA divests its right to serve DAL, none of it really matters to anyone.

And, DL has actually done very little publicly about the whole issue. It's amazing how little you have to say when you actually cite law instead of consulting and marketing campaigns.

We could have shut these conversations down months ago if a lot of people including you believed me that the DOJ really has no power to say that DL or any other cannot serve an airport.

In fact, they didn't. Which is precisely why DL will be there regardless of what happens with the two gates.

 

[FrugalFlyerv2.0]

.........
 
AA signed away its right to operate from DAL. There are ample legal reasons why the city of Dallas has a right to refuse to transfer the lease or gain money from the divestiture given that there are laws which require DAL to accommodate new entrants.
 
What is very much in doubt are WN's plans to dominate an airport under the guise that it is in the same region as another airport that it chose to pass on.
.........
..... But Texas airlines should not be surprised if other states start taking punitive actions against routes that operate to/from DAL against the interests of airlines that have large operations in those other states but which cannot gain access to DAL.

The problem, as much as AA and WN want to believe otherwise, will not go away.

The issue of DAL will be escalated to the highest levels of US government if a viable solution cannot be found to protect national and not just local or parochial interests.
 

 
Wow!  You've really become unhinged.
This rant is a bit over the top even for you.
 
I don't know what part(s) of your text that I highlighted above is most hilarious? 
One of my favorite gems from above is your diatribe about WN's plans to dominate.  DL would call that winning n'est ce pas?
 
BTW:  DL is not a new entrant

 

[eolesen]

Unhinged is an understatement.

Just having the arrogance to type out that the notion Georgia would entertain "economic sanctions" against VX, WN, or even AA because DL was slighted is nothing short of comical.

The City Manager will make a decision by the end of the week. Not the City Council. Maybe the moderators need to consider doubling up on the Friday coverage...

 

[WNMECH]

Branson is having another strange love affair.
 
https://www.youtube.com/watch?v=je6-h8DPmUM
 
 
He is also not as smart as he thinks he is and doesn't always succeed.
 
 
http://www.businessinsider.com/richard-branson-fails-virgin-companies-that-went-bust-2012-4?op=1#!KCmYY
 
If WN wanted to, they could make most of his flights lose money, albeit with some cost to themselves.

 

[WorldTraveler]

The only people who are likely to get unhinged are WN's fans who will find that they are going to have to "make do" with just 16 gates.

And then still have to welcome newcomers if they show up.

Yeah, access to DAL is a big deal; it is precisely receiving the attention it is because it highlights yet again the ongoing problems w/ N. Texas aviation which have not been resolved.