Wright Deal Not Right? Maybe. Probably?
Steven Pearlstein, a business columnist at The Washington Post, has an outsiders' take on the Wright Amendment compromise, which Mayor Laura touts as her legacy and some folks at the Justice Department insist is bad for business. Pearlstein writes that the compromise reached by mayors Laura Miller and Mike Moncrief was, in fact, pretty good for most everybody: Southwest Airlines ("which could add significantly to its Dallas traffic while keeping JetBlue or some new upstart from challenging its domination at Love Field"), American Airlines ("which managed to put off the biggest threat to its fortress hub at DFW since the Justice Department took it to court in 1999, accusing it of using predatory practices to crush competition there") and Dallas-Fort Worth International Airport ("which was already reeling from Delta Air Lines' decision to close its Dallas hub and was desperate not to lose more traffic to Love"). But, the columnist insists, there is at least one party getting screwed on the whole deal:
"The loser, of course, was the only party with no seat at the negotiating table--namely, consumers. They would have to wait another eight years for full repeal of the Wright amendment, and even then, there would not be the kind of robust competition that has produced airfares elsewhere that are half of what they are in and out of DFW.
Any consumer representative would have immediately recognized the deal for what it was--collusion between two dominant competitors to limit supply, carve up a market and keep out other competitors. In other words, a flagrant violation of antitrust laws. That's why, when legislation was introduced this month by Texas Sen. Kay Bailey Hutchison to codify the deal, it contained a blanket antitrust exemption."
Now comes word in The Dallas Morning News--which, yesterday, attempted to dismiss Justice's concerns as nothing more than "politics being politics"--that the U.S. House Judiciary Committee will take up the Wright Amendment in September, with its focus on the limiting of gates (to 20) at Love Field. So much for the slam dunk, but what of the legacy? Oh, well. There's always the Trinity River and those Calatrava bridges. --Robert Wilonsky
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