Friday, December 03, 2004

Spread the Love ... Field

Via Roland Patrick, I learn of Virginia Postrel's woes in trying to book a non-stop from Dallas to Philadelphia (to attend next month's AEA meetings, no less). At issue is the Wright Amendment, which limits the states to which an airline can fly from Love Field in Dallas. Note that it is not limiting the size of the planes (which are regulated by a local ordinance)--only the destinations. Sadly for Ms. Postrel, Pennsylvania is not among the privileged states, and so she cannot avail herself of Southwest's new low fare, non-stop service from many of its airports to Philly.

If you can believe it, this legislation was designed 25 years ago as a protective measure for Dallas-Fort Worth Airport, which is so "punctuality-retardant" that Southwest opts not to fly there, despite the restrictions at Love Field. After citing a number of studies that show just how important Southwest is to ensuring competitive fares in a market, Virginia gets to the real issue at hand:

The Wright Amendment offers an excellent test of Texas politicians, including the Bushies: Are they just crony capitalists? Or are they pro-market, pro-growth, and pro-consumer? For the past 25 years, the consistent answer has been "crony capitalists," more interested in protecting DFW Airport and American Airlines than in letting market competition serve the public (including a lot of Dallas businesses). A few politicians, including Rep. Pete Sessions, have come out for repeal. But, astoundingly, Dallas Mayor Laura Miller is defending the federal law that puts her own city at a competitive disadvantage. Or maybe it's not so astounding. It's Texas politics as usual.
In one of my earliest posts, I explained why I think Southwest's business model is superior to that of the so-called major carriers. It bears repeating: Southwest's market value is about the same ($12.6 billion) as the total market value of every other domestic airline. Check it out for yourself.

And then join the movement to repeal the Wright Amendment. Free trade begins at home.

1 comment:

Adam O'Neill said...

The Wright Amendment is the tip of the iceberg. More pervasive and economically harmful are prohibitions on 'cabotage' (foreign-owned airlines flying domestic routes). Until Jetblue came along, it was cheaper to fly from NY to London than from NY to LA because of airlines like Virgin Atlantic. But under current law, Richard Branson can't operate an airline in the US. On top of that, there's no market for airport gates or facilities so that the big airlines maintain virtual monopolies at most big airports and airports underprovide needed services. And don't forget the post-9/11 multi-billion dollar subsidies to the big carriers which simply served to delay competition and to prop up defunct business structures between bankruptcies.