Today DFW is the world's sixth-busiest airport and American Airlines is the world's largest carrier. American is, like all the older airlines, losing money. But is that a reason to punish Southwest? Unlike other airlines, Southwest is not asking Washington to take on its pension burdens, or to give it other subsidies. It is asking only for liberation.
Southwest, which is now using only 14 gates for 117 flights a day at Love Field, says it could use only 21 gates if the Wright restrictions were repealed. This would put some downward pressure on the fares of American, which by the end of the year may have almost 1,000 flights a day out of DFW.
That pressure would be good for travelers -- and probably for American, too. When Southwest entered the Fort Lauderdale market, forcing American to cut fares to and from Miami, American's passengers and revenues increased. The Philadelphia Inquirer reports that since Southwest entered the Philadelphia market just last May, driving down the fares of previously unchallenged US Airways, travelers through that airport have saved $1.2 billion.
The Wright Amendment is now functioning in the context of an airline industry crisis aggravated by government policies. The government is subsidizing airlines that have unsustainable business models. By allowing them to use bankruptcy as strategy for enhancing competitiveness against other high-cost airlines, it creates an incentive -- even a necessity -- for those rivals to enter bankruptcy and dump pension burdens on Washington.
Government is preserving precisely what ails the industry -- excess capacity. Suppose a major carrier were to go out of business. A salient fact about the airline industry is, Kelleher says, that ``its principal capital asset travels at over 500 miles per hour.'' Which means: If one airline fails, unserved markets will be served swiftly. He notes that on the afternoon of May 12, 1982, Dallas-based Braniff Airlines -- one of those that had urged government to strangle Southwest in its cradle -- went out of business. The next morning at least five airlines started up on some Braniff routes.
Ronald Reagan said that Washington's approach to intervening in industries is: If it moves, tax it; if it keeps moving, regulate it; if it stops moving, subsidize it. Regarding airlines, the policy is: If they are failing, keep them flying; if they are prospering, burden them. But surely Washington, although difficult to embarrass, is embarrassed enough to repeal the Wright Amendment.
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