The (W)right to Fly

How little Legend Airlines beat mammoth American at its own game

"We really kicked over a hornet's nest," says Leadbetter.
That is an understatement. By attempting to upset the Wright Amendment status quo, Leadbetter and McArtor took on an issue that rivals the Kennedy assassination in the amount of emotion, suspicion, and controversy it engenders locally.

The U.S. Department of Transportation fired the first salvo at Legend when it issued a strange ruling last fall that said the airline could fly only planes originally designed for 56 or fewer passengers, not the reconfigured larger jets in Legend's proposal. The ruling, which almost clipped Legend's wings permanently, had American Airlines' fingerprints all over it. Within days of the final ruling, American made large contributions to several national Democratic warchests.

Although McArtor always has maintained that Legend intended to fly within the strictures of the Wright Amendment, Robert Crandall accused him and his partner of wanting to repeal the amendment. Moreover, Crandall claimed that Legend, which expected to begin service with six planes, would destroy Dallas/Fort Worth International Airport and the economy of the entire metroplex. In an interview with the Dallas Business Journal last October, he threatened "to sue everyone in America to close Love Field" if the Wright rule was altered in any way. Crandall refused to be interviewed for this story.

Then a chorus of elected officials--from Dallas Mayor Ron Kirk to U.S. Rep. Dick Armey and Sen. Kay Bailey Hutchison--chimed in, claiming that Legend's efforts would cause a civil war between Dallas and Fort Worth by violating an agreement the cities made to build D/FW airport 30 years ago. Fort Worth also threatened to sue if Legend was successful.

McArtor and a handful of Legend lobbyists spent the summer in the halls of Congress battling legions of American's lobbyists and an onslaught of accusations against their company that made them out to be the economic equivalent of the Antichrist. Then, at the 11th hour, they had to contend with a final, desperate assault launched by former Congressman Jim Wright and a handful of North Texas legislators using out-of-date information that questioned the safety of increased air traffic out of Love Field.

"We were blamed for everything," says a weary McArtor. "It is amazing the amount of opposition American created and the lengths to which people will go to create misinformation."

A close analysis and investigation of every argument posited by the opposition to Legend shows that few facts support any of them. "Every story the politicians tell about the need to preserve the Wright Amendment--protecting the bond holders, keeping the peace between Dallas and Fort Worth, noise, safety--they are all code words used to protect American Airline's monopoly," says Bernard Weinstein, director of the Center for Economic Development at the University of North Texas.

And that monopoly is the reason, Weinstein and industry analysts say, why Dallas air travelers pay so much--two to three times more than Houston passengers pay on comparable routes. American Airlines' airfares are 67 percent higher in Dallas, where it dominates 70 percent of the market, than throughout the rest of its domestic route system, according to a study conducted last year by the Houston-based Campbell Aviation Group. The price differential can be astounding. The price for a no-advance ticket purchase on American Airlines from D/FW to Phoenix, for instance, is $1,142. (The reservationist quotes the price one way--perhaps to soften the blow.) The same ticket from Houston Intercontinental to Phoenix costs $538. The ticket price from Austin is even cheaper--at $364--and includes a stop in Dallas to pick up the passengers who paid more than three times the amount to go to the same place.

Last summer, when the Dallas Observer first began talking to McArtor and Leadbetter about their struggle, McArtor, who was director of the Federal Aviation Administration in the late 1980s, characterized American Airlines' fierce opposition to his airline as the epitome of anticompetitive practice. "They want all the marbles," he said. "But by fighting so hard to protect the few they might lose to Legend, they risk losing a whole lot more."

And that is exactly what happened. Stymied by the Transportation Department, McArtor and Leadbetter looked for help in Congress. It took the better part of the year, but they found an unlikely ally in Alabama Sen. Richard Shelby, who saw Legend's plight as more than just a local issue, but a symbol of the problems plaguing the airline industry nationwide. Like many congressional leaders, Shelby was concerned about spiraling airfares and the lock the large carriers had on the country's major hubs, which were allowing them to control market forces.

But Shelby did not stop at championing Legend's cause. He enlisted the help of the most powerful men in Congress to remove some of the limits of the Wright Amendment, which they viewed as government protection of one of the biggest, most profitable airlines in the country.

By waging such a heavy-handed campaign to keep Legend grounded, American Airlines thrust the Wright Amendment into the national spotlight, which illuminated just how little support it had in Congress. Now it is just a matter of time before the Wright Amendment is history.

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