There was an odd little dance on Friday between the city of Dallas and Virgin America after the carrier announced that it had struck a deal with American Airlines and would begin flying out of Love Field on October 13. Company executives predicted city approval would come swiftly and was little more than a formality. The city responded by saying, hey, not so fast.
No decisions have been made regarding carriers operating out of 2 Love Field gates. Transportation Cmte. will be briefed Monday.
— City of Dallas (@1500Marilla) April 25, 2014
What's going on? Why wouldn't the city sign off on a deal that had already been approved by two established airlines and green lit by the Department of Justice, which is the one forcing American to give up its two Love Field gates over antitrust concerns?
The answer came Friday night in the form of a City Council briefing, set to be delivered this afternoon, concerning the two gates. Included in the briefing is a study the city commissioned from L.E.K. Consulting that identifies Southwest Airlines, and not Virgin, as the best option.
Southwest, the study concludes, would offer more nonstop destinations, a greater increase in passenger traffic (i.e. revenue), and exert stronger downward pressure on fares. Southwest would also be better for the region because flights originating from the two new gates wouldn't have been offered before, whereas Virgin would be taking them away from DFW.
The study doesn't mean Dallas will decide in favor of Southwest. That will be up to City Council members, at least some of whom are skeptical. Here's Philip Kingston's Facebook comment on The Dallas Morning News piece detailing city staff's seeming reluctance to endorse the Virgin deal:
This is bad. Bad, bad, bad. Keep in mind that council has no legal right to weigh in on who gets the gates. I know that from our own lawyer, and I know that all my colleagues got the same analysis from him. So what could possibly be the point of hiring a consultant to tell us to put our thumb on the scale for Southwest? (more on this tomorrow at the briefing, but this study is deeply flawed) Who in her right mind would want to be seen as picking the winner between Southwest and Virgin? Especially when we're precluded by our contract with AA from meddling in this decision at all? We're missing a fantastic opportunity to shut up and let the market work.
Kingston, alas, isn't on the committee that will be briefed this afternoon. But maybe someone who is -- Lee Kleinman? Sandy Greyson? -- will think to ask some of those questions.
Send your story tips to the author, Eric Nicholson.
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