Airline Turf War! Virgin America Flies Against American And Southwest

As Wright Amendment restrictions are set to expire later this year at Dallas Love Field, Virgin America is bidding against Delta and Southwest to acquire two gates that are being divested by American Airlines as part of its merger with US Airways.

Virgin America already flies to DFW International, so why the interest in adding service to another airport so nearby? Not so fast. The airline wants to vacate their DFW gates and relocate to Love Field. Next, they want to attack American's customer base by serving American's hub cities in Chicago and Washington D.C. Virgin America's CEO, David Cush had this to say on the potential move:

"We can make a compelling case that having Virgin America at Love Field is very good for business fliers out of Dallas, as well as people coming into Dallas."


Mr. Cush does make an excellent point. Love Field is much closer to downtown Dallas, which appeals to business travelers. This is something Southwest Airlines has been able to capitalize on since 1974, when DFW opened (Full disclosure: my day job is at Southwest Airlines). At that time, all of the airlines at Love Field moved to DFW while Southwest remained. This resulted in the Wright Amendment of 1979, which restricted airlines at Love Field to flying only within Texas or to bordering states, unless the plane had 56 seats or less. Southwest flew 122-seat Boeing 737s and had no inclination no become the national carrier it is now.

Southwest at Dallas Love Field

From DFW Airport, Virgin America already flies to Los Angeles and San Francisco. The airline also wants to increase frequencies to those cities if they move to Love Field. They recently won coveted slots at Reagan National Airport in DC, as well as New York's LaGuardia airport.


If Virgin America doesn't end up with the two gates at Love Field, they will remain at DFW and use the New York and D.C. slots to serve other cities, but Cush said the airline is confident they will get them, adding that additional low-fare competition will please U.S. regulators.

Virgin America has been the darling of the industry, winning piles of awards including Best Domestic Airline and Best U.S. Business / First Class from Conde Nast Traveler each year since 2008. In spite of being well loved by travelers, on the financial side, Virgin America has lost roughly $600 million since coming to the industry in 2007, and has managed only a few profitable quarters.


Sources: Wall Street Journal, Bloomberg

Images are by the author, Paul Thompson

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