The FAA Is A Hypocrite For Demanding Delta Be Accommodated At Love Field

The latest salvo in the ongoing battle between Delta and Southwest over gates at Love Field involves the FAA stepping in to say they think that Dallas is required to accommodate Delta:

“If FAA’s investigation establishes violations of the City’s sponsor obligations and related Federal law, FAA may issue a determination that the City is in noncompliance with its Federal grant obligations in its operation of DAL [Dallas Love Field],” the FAA said in its “notice of investigation.”

“As a result, the City could be found to be ineligible to receive new FAA grants and payments under existing grants until this matter is resolved. Further sanctions, including a judicial order of enforcement, are also possible,” said the notice.

“The FAA strongly recommends that the City ensure the maintenance of the status quo at DAL until this matter is resolved,” the notice said.

“As stated above, FAA hereby provides notice that it may, if it deems it necessary, issue an interim order to require the City to maintain access to DAL for Delta so that it may continue its current pattern of service during the pendency of this proceeding,” it said.

Now, the FAA isn’t saying that Southwest needs to give up gates.  But, considering they operate almost every gate at DAL (other than two controlled by Virgin America) that would seem to be the solution they’re intimating.  They’re a bit late to this fight, which has been going on for months now.

And, if they really felt this strongly, one would think they could have asserted this opinion when gates were reshuffled in past years.  American was forced to divest gates (that, IIRC, they were leasing to Delta) as part of their merger with US Airways.  Those gates went to establish new service by Virgin America.  Everyone was really happy to see some other low-cost competition in DAL.  Many of the reports around the award to Virgin centered on the fact that the powers that be were encouraged by the growth of low-cost carriers.  And, that appears to be working, as American is continuing to see pricing pressure due to carriers like Southwest, Spirit and Virgin.

Maybe the FAA secretly didn’t agree with this reasoning, but I find no public record of their displeasure.  Maybe it’s just possible the FAA can’t do math.  If Southwest controlled 16 of the gates and United controlled 2, how exactly was Delta supposed to be guaranteed continued service if the only other two gates were awarded to Virgin America?  Just because United chose to lease their gates to Delta for a period of time doesn’t mean they should be obligated to do so in the future.

Similarly, Southwest and Virgin shouldn’t be asked to change their operations.  Hell, Southwest operates almost twice as many flights per gate as Delta has at Love Field.  They’re providing more flights to more places than Delta is.  Virgin is only doing 5 flights a day out of their gates.

I have no issue with the FAA wanting everyone who had service at Love Field to have the right to continue it.  I *think* that’s their argument here, though I guess they could just be arguing Delta should have service, as opposed to Frontier showing up tomorrow and wanting to offer flights.  It stands to reason that if the accommodation was so important, then letting Virgin America have two gates that aren’t utilized to full capacity was a bad idea.

The complaint by the FAA seems half-baked.  They complain about the Love Field situation and don’t offer a solution.

The Wright Amendment was an ill-conceived notion that survived way too long and was finally rectified.  The current position by the FAA seems ill-conceived as well.  But, maybe Love Field is always destined to have some form of controversy.  The decision to limit the number of gates to 20 seemed arbitrary, especially given how much established DFW was (did it really need protection from DAL when this decision was made 10 years ago?  It certainly doesn’t need it now).  Maybe the FAA should buy some plywood and paint and require the airlines to build a few more gates, as View From the Wing recommends.

I’ve eaten so much popcorn watching this unfold I need some antacid.

 

5 Comments

  1. 1) A notice of investigation is not a vehicle for providing “solutions” 2) the federal grant assurances require “not unjustly discriminatory” access, and 3) DOT/FAA has been involved in this since 2014.

    1. Johnny, I know DOT/FAA have been involved for a while, so why the sudden need for an investigation now? The reallocation and awarding of gates to Virgin would have been a much better time to bring this up than forcing an airline to reduce/eliminate existing service. On your point #2, how does the airport balance when, say, AA wants to return to DAL (or spirit wants to add service)? Are they being unjustly discriminatory by not allowing them access? If not, then why is DL different here?

  2. This might clear things up…

    AIP grants are contractual agreements between the FAA and the recipient. Included in the contract are stipulations called “Grant Assurances.” Since the AIP program is voluntary the “Grant Assurances” are not statutory but contractual. The FAA is not acting as regulatory body so the letters it sends when a recipient has questions are called “Guidance” and are not declaratory since the FAA is not making any presumptions what specifically is being done to meet the Grant Assurances. However the FAA assumes the Grant Assurances are being met. If there are indications the Grant Assurances are not being met the FAA will launch an investigation to make that determination. If the recipient is not meeting the Grant Assurances the the normal actions the FAA will take are administrative: withholding grant payments that have been approved and rejecting future grants. The FAA may also seek injunctive relief in U.S. District Court.

    In this case it appears the City of Dallas has failed to comply with the provisions in the Grant Assurances.

    1. Mal, interesting. Thanks for the context. Assumedly, they agreed to give some form of unfettered access as part of the Grant Assurances, and that’s what the FAA is querying in regards to Delta’s complaint.

      1. I believe that the FAA holds that any carrier with service (gate leased or not) at the time the AIP grant is approved cannot be forced out by any improvements made using grant funds. In this case the approval date was 2010. The terminal improvements grants are still being distributed (through 2018/2019?) and equal $47,000,000 worth of payments still to be made to the City of Dallas. This is obviously a huge balance that the city has bugeted to the construction that would be lost and fall to the taxpayer to make up. The city is also required to publish and make public the Competition Plan to meet the the Grant Assurances. The FAA has stated the last Competition Plan was filed in 2009 however the last plan published on the Dallas Love web site was the 2003 plan. The city is also required to publish and submit an updated plan if there is a denial. That would mean the city was required to submit a plan at the end of 2014 for the denial of Delta to retain service (November 2014). These plans will figure largely into the investigation of the city the FAA is now conducting. The City of Dallas in 2009 released the updated lease agreements which clearly stipulated that leases are subject to the AIP. The question remains why the city approved the Southwest sublease of the United gates. Additionally there is a clause in the AIP that limits the sublease to a 15% premium. The taxpayers for the City of Dallas should be very concerned right now. If nothing else the legal bills are mounting and at worse they may be responsible for tens of millions in lost grants for the maintenance and upkeep of the airport that normally would come from the federal government.

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