Southwest defends $120 million payment for 2 airport gates

AP News
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Posted: Sep 30, 2015 8:28 PM

DALLAS (AP) — Southwest Airlines on Wednesday defended a $120 million payment for two gates at Dallas Love Field, saying the deal was legal and cheaper than the price of access at other airports.

The payment to United Airlines is emerging as a key issue in a fight between Southwest and Delta Air Lines, which is trying to keep a toehold at the Southwest-dominated airport.

A federal judge heard three days of testimony and will decide whether Delta gets to stay at the airport by using a Southwest gate. The judge indicated Wednesday that he could rule in about a week. The loser is likely to appeal, and a jury trial is possible.

The case highlights the effort and expense that airlines will spend to dominate an airport.

Dallas-based Southwest already controlled 16 of Love Field's 20 gates when it agreed earlier this year to pay $120 million to sublease United's two gates at the city-owned airport. Virgin America has the other two. Southwest did not disclose the payment to city officials, and it only became public when a Southwest lawyer revealed the price in court on Monday.

Delta contends that the Southwest-United deal was illegal because the gates belong to the city and can't be sold by airlines.

Southwest counters that selling gate rights is not new — American Airlines did so when it had to divest assets to win approval for its merger with US Airways.

Southwest Airlines Co. vice president for airport affairs, Bob Montgomery, said the price was carefully calculated. Assuming that Southwest operates about 10 flights per day at each gate, he said, the price was less than Southwest paid for takeoff and landing rights at LaGuardia Airport in New York and Reagan National outside Washington, D.C.

Atlanta-based Delta Air Lines Inc. doesn't have any gates at Love Field but operates five daily flights using a Southwest gate. Southwest wants U.S. District Court Judge Ed Kinkeade to evict Delta, saying Delta is interfering with Southwest's 180 daily flights.

Delta says it should be allowed to stay to increase competition against Southwest at the busy airport near downtown Dallas.

Delta also flies to Dallas-Fort Worth International Airport eight miles away.