NCPA - National Center for Policy Analysis

THE WRIGHT AMENDMENT IS WRONG

December 9, 2004

The law protecting Dallas-Fort Worth International Airport (DFW) from competition is obsolete and hurts consumers, writes author Virginia Postrel.

Since 1979, in order to protect the burgeoning new airport, the so-called Wright Amendment has required that full-size airplanes may fly from Dallas' Love Field (a DFW competitor) only to adjacent states plus Alabama, Mississippi and Kansas. Those looking for direct flights elsewhere have to pay higher rates for American Airlines at DFW (the airline's major hub).

DFW is now 25 years old and one of the world's busiest airports. Discount carrier Southwest Airlines, based out of Love Field, has given indications it wants the old law repealed. According to the Brookings Institution, repeal of the Wright Amendment would benefit consumers:

  • It is estimated that competition from Southwest accounted for $9.7 billion of the annual fare savings from the change in real fares since deregulation -- nearly 40 percent of the total.
  • In 2000, the presence of Southwest in regional markets around the country saved consumers $19.6 billion, while the presence of American cost travelers about $3.7 billion.

Should the law be changed, it could not come at a better time for Southwest, say observers. Delta Air Lines is eliminating most of its flights from Dallas-Fort Worth and presents an opportunity for the airline to gain additional market share.

Whether local politicians will listen remains to be seen. In the past, American's political influence has defeated attempts to repeal the Wright Amendment. But American, based in Fort Worth and a unit of AMR, is not what it used to be. Southwest, also a big local employer, has passed it as the largest airline transporting passengers within the United States. The low-cost airline's consistent profits contrast sharply with American's near bankruptcy after Sept. 11.

Source: Virginia Postrel, "Hurdle Faced by Southwest Airlines Shows Drawbacks of Protectionist Legislation," New York Times, December 2, 2004.

For NYT text (subscription required)

http://www.nytimes.com/2004/12/02/business/02scene.html

 

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