Luv And War In The Dfw Metroplex

[corl737]

Or, how about SWA competing on a level playing field by paying the same landing fees and gate rentals as AA has to pay.

Isn't the whole purpose of running a business about finding competitive advantages? SWA has no desire to increasing its costs to what AA has agreed to pay! That's not leveling the playing field, that's bad business.

It is possible (slim) that SWA may be forced to move to DFW. If it does so without first making every opportunity to expand its operations at the absolute lowest costs it would be negligent.

By the way, just like DFW promotes that SWA can fly from their airport any time they want, AA has the opportunity to have the same lower intrastate costs by flying out of Love anytime they want. They don't however, because they know from experience that splitting operations that cater to the same O&D customers is inefficient and bad business.

And, don't give me the cr*p about the DFW facilities being better than Love. SW chooses to subject its passengers to inferior facilities--just like it's trying to do in SEA. It should not get a price break on operational costs for that reason.

SWA passengers have chosen not to demand fancy facilities. They'd rather put up with a little less glitz for the benefit of lower fares. Because of Love's short-haul nature, no one spends much time in the terminal so efficient function overrides appearance. Once again, price is king. (Hmmm. If Love was converted to a long-haul airport SWA's costs would increase due to the need to improve terminal facilities to accomodate longer passenger connect times. Sounds like repealing the Wright Amendment would hurt SWA's costs -- that's what you want, right?!)

As for SEA, Southwest operates out of SEA-TAC just like everyone else. They are just looking at BFI as they should when investigating every possible way to reduce costs. (Read this KING5 article is you're concerned SWA will get a sweet deal from BFI! To get the facilities it needed to be successful at MDW, in 1999 SWA pledged to spend over $760 million through 2012 (ref on pg 27 here).)

If DFW wants to match SWA's cost of operating at Love that's something they'll have to negotiate on their own. Otherwise they're pricing themselves out of a tenant. (Don't even talk about DFW's $22 mil giveaway ... there are so many strings and restrictions it's only purpose is as a public relations ploy!)

Or, how about SWA give up control of about half its gates and landing slots at Love so that other airlines CAN compete equally there?

SWA will probably not give up any gates. They are using 14 gates now and lease Love Field's North Concourse for use as a training center. There are three more gates available immediately to those who make the right agreements to get them. Free market economics dictates that those who come with cash in hand win. If they wanted them, SWA would have to bid on additional gates along with everyone else. You can bet the city of Dallas would be extremely open and honest in this process, too, as they would be under the microscope every inch of the way.

The era of long-term exclusive-rights gate leases is just about over. At Nashville, AA still makes lease payments on seven inactive gates just so no one else can use them. At LAX, the USA Today in June, "United occupies 26 gates — the same number it had prior to bankruptcy, even though its passenger count has fallen 41% since 2000. Many of its LAX gates are hardly used. Southwest, on the other hand, has just 12 gates at Los Angeles, and has desperately been seeking more space there."

Truth is, SW doesn't want to COMPETE in DFW area. It wants exclusive use of a low-cost airport while making sure that its competitors are forced to pay higher costs.

[post="282633"][/post]​

You're darn right SWA would prefer not to have to compete ... any more than AA wants to compete! If either could have an absolute monopoly they'd love it. It is interesting to note, however, that at Love, where SWA controls over 92% of the airline traffic, air fares are very low. At DFW, where AA controls "only" 80% fares are markedly higher. Why is it that the airline that could logically demand a higher fee based on greater monopolistic positioning isn't gouging it's customers?

Competition isn't feared by Southwest nor is it sought out purely for competition's sake. SWA's success is based on the simple mantra of maximizing its own opportunities as they become available. Great concept, isn't it?

 

[corl737]

Nice try in the shady political dealings arena, but no cigar. As a matter of fact, it was during that same period that a LOT of corporations began to realize that they no longer needed to be headquartered in NYC in order to have access to the major financial markets. Exxon moved its headquarters to Texas during that period. Gulf moved its headquarters to Houston from NYC. There are many other examples.

[post="282576"][/post]​

Give me a break! I said it was just my opinion. I know there was a lot of movement out of NYC in that time frame. Still, this was the only corporate HQ move that had friendly legislation accompany the timing. I can't prove any shady political dealings any more than the government could prove AA engaged in predatory pricing. I guess if it looks like a duck, it could actually be a goose.