Repealing the Wright Amendment
On February 3rd, a front-page story in The Commercial Appeal announced, “Memphis Not on List for Southwest Expansion.” Southwest Airlines had announced that beginning in fall 2014, new non-stop service would be initiated between Dallas Love Field and 15 cities, including Chicago, Atlanta, and San Diego, but not including Memphis. There were other airline announcements that week, such as United Airlines’ elimination of its Cleveland hub; but the Southwest announcement was major news even outside of Memphis and Texas. So what’s the big deal? Airlines add and delete flights frequently with a lot less fanfare. Buried in the article was the info that the beginning of this new service will coincide with the expiration of the 34-year-old Wright Amendment.
So exactly what is the Wright Amendment? A review of this legislation, signed into law in 1980 as an amendment to the Federal Aviation Act of 1958, provides a fascinating insight into how special interest Congressional action can dramatically affect the operations of a company, even in a deregulated environment. Back in the 1960s the Federal Aviation Administration became concerned about the ability of local airports in Dallas and Fort Worth to adequately handle the volume of traffic in and out of the DFW Metroplex. Ordered by the Civil Aeronautics Board to establish a new regional airport, the local governments began the construction of Dallas Fort Worth International Airport (DFW), which finally opened in 1974. The plan was to eliminate the existing Dallas and Fort Worth airports, and all airlines serving the area agreed to move their operations to DFW.
In the meantime, in 1971, Southwest Airlines was formed and began intrastate operations from Dallas’ Love Field and had no desire to move. Since Southwest did not even exist when the other airlines agreed to relocate to DFW, it was not part of the original agreement and ultimately filed suit to continue Love Field operations. In 1973, the U.S. Supreme Court ruled in their favor.
After the passage of the Airline Deregulation Act of 1978, Southwest announced plans to offer interstate service from Love Field. To say that made DFW and the other airlines very unhappy would be an understatement. Love Field is only minutes away from downtown Dallas; and since only Southwest would be operating there, there would be less congestion, more convenient parking, and other traveler conveniences. DFW and the airline interests went to Jim Wright, representative from the 12th Congressional District that included Fort Worth and arguably one of the most powerful congressmen at the time. Wright sponsored the amendment that restricted airlines using aircraft of more than 56 seats to flights from Dallas to destinations within the state of Texas and those from and to the contiguous states of Arkansas, Louisiana, Oklahoma, and New Mexico. In other words, a passenger flying from Dallas to Phoenix, for example, would have to change planes in one of the contiguous states, actually buying two tickets and claiming and re-checking baggage at the intermediate city. Obviously, this was not an attractive alternative to DFW.
In the meantime, in spite of this, Southwest continued to grow and became a very viable airline. DFW by now had become congested, and in 1997, the law was amended to allow Southwest flights to Alabama, Kansas, and Mississippi. Flights to Missouri were added the next year. Still, DFW opposed any further erosion of the Wright Amendment. Finally, in 2004, Southwest began an earnest campaign to have the amendment repealed; and, in 2006, an agreement was reached that would repeal the amendment in eight years from then — on October 13, 2014.
Thus, the simple announcement of new flights brings to an end what many consider to be one of the most onerous restraints to free competition in the airline industry since the early days of regulation, with most of the responsibility falling on the shoulders of influential lobbying interests and one powerful congressman. This can only bode well for both Southwest and, I believe, eventually for Memphis. If passenger traffic warrants it, the airline can establish service without the inhibitions of outdated regulation. N
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider of logistics management advisory services.He is the author of several books and hundreds of articles on the subject of Transportation and Logistics. He can be reached at firstname.lastname@example.org