OST-99-6172 / American Airlines / Route 560 US-Mexico / Opposition of Legend Airlines / September 23, 1999
Application of
AMERICAN AIRLINES, INC. /
OST-99-6172Under 49 USC 41102 for amendment to certificate of public convenience and necessity for Route 560 (U.S.-Mexico)
OPPOSITION OF LEGEND AIRLINES, INC.
TO APPLICATION OF AMERICAN AIRLINES, INC. FOR
AMENDMENT TO CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY FOR ROUTE 560 (U.S. - MEXICO)
Legend Airlines, Inc. ("Legend") opposes American Airlines, Inc.'s ("American") August 26, 1999 application which seeks to convert its exemption authority to certificate authority on certain U.S.- Mexico routes from Dallas/Fort Worth Airport ("DFW"). The Department of Transportation ("Department") should not grant American's request for certificate authority for DFW . international routes when it and DFW have repeatedly proclaimed in other Department dockets that DFW will be destroyed because of a federal law authorizing additional operations at Dallas Love Field.
Legend supports "Open Skies" and believes that all carriers should be able to expand both domestically and internationally. The Department should be congratulated for increasing opportunities for air carriers. As the Department supports international growth of large carriers, however, it should refrain from supporting growth of a carrier
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that provides false and misleading information to the Department and uses its market power and resources to eliminate competition.
For the past several years, American and DFW have stated in press releases, court filings, the Department's Love Field Interpretation Proceeding, and most recently before the Fifth Circuit Court of Appeals, that American and the DFW hub will be destroyed by any level of competition introduced at Love Field. Statements made by these parties pertaining to the collapse of DFW include the following:
Siphoning local traffic from DFW to Love has slowed DFW's growth; expanding Love will slow it still further. I just don't understand why anyone in Dallas wants to see DFW become a second tier hub.
Opening Love Field will cause the DFW hub to shrink and reduce the travel options of everyone in the Metroplex.
Dallas simply won't be able to compete with cities like Atlanta and Denver, which are supporting their major airports.
(Remarks by Robert Crandall, Chairman, American Airlines, Love Field Press Conference, December 2, 1997.)
* * *
Because more than 90% of Dallasites and more than 50% of Metroplex residents live closer to Love Field than DFW, airlines will add service at Love and reduce it at DFW. With fewer local customers, in the long term DFW will not compete with hubs like O'Hare, Atlanta, and Denver. DFW will become a second-tier hub. [emphasis added]
(Dear Colleague Letter from American Chairman, Don Carty, July 6, 1998)
. . . the evidence submitted by DFW Airport and others shows that allowing unfettered operations at Love Field under the Shelby Amendment would contribute to the degradation of DFW's role as the Dallas/Fort Worth area's dominant airport and threaten to fragment the hub operation at DFW.
. . . experts testified concerning the nature and extent of the irreparable injury to DFW Airport if Continental Airlines - - and other airlines making a competitive response - - began interstate flights from Love Field beyond the current restrictions of the Wright Amendment and without the
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constraints of the Bond Ordinance and the Use Agreement. The ramifications for DFW of such an increase, the evidence shows, is that DFW's growth would be sharply reduced and the DFW hub would be dramatically reduced in size and scope.
(Department Docket,
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Even Continental's initially-planned three flights per day would decrease the load factor, decrease departures, and cause a reduction flights to fewer cities from DFW, with a possible breakdown of its hub operation.
Long-haul flights at Love Field would "de-stabilize" the DFW hub thereby "fragmenting" it and placing it in "jeopardy." Once an airport loses local passengers, the airport lacks sufficient demand to sustain its hub operation and must inevitably downgrade service. The hub starts to "unravel itself," the damage would be immediate and irreparable.
(DFW Brief, American Airlines v. Department Of Transportation, No. 99-60008 (Fifth Circuit Court of Appeals) July 19, 1999)
Although the evidence clearly shows that DFW is not falling apart /1, (much to the contrary, American and its alliance partners continue to add domestic and international routes at DFW), American has failed to refute any of these doomsday claims. Apparently, American believes that it is acceptable to invent facts in order to
1/ According to DFW's passenger facility charge application (submitted to the FAA on August 18, 1998), the annual forecast for total enplaned passengers is as follows:
|
Year |
Total Enplaned Passengers |
|
1997 |
28,590,000 |
|
1998 |
28,681,000 |
|
1999 |
32,220,000 |
|
2000 |
33,090,000 |
|
2001 |
33,750,000 |
Based on DFW Airport reports, those numbers are projected to grow as follows:
|
2005 |
2010 |
2015 |
|
|
Passengers |
77 million |
88.4 million |
101.8 million |
|
Operations |
1.12 million |
1.24 million |
1.38 million |
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maintain market control. Thus, it is up to the Department to insist that American set the record straight on DFW - is it on the edge of collapse or not? /2
In administering federal law, the Department has an obligation to ensure the integrity of its proceedings. The Department cannot permit a carrier that makes misleading comments to be rewarded with additional routes. The Department should demand that American reject and refute statements that DFW is falling apart before it awards American with any form of new route authority at that hub. If American maintains the position that DFW is going to be destroyed, the Department should deny American's request for certificate authority from DFW to Mexico and any destination. To ignore American's flagrant disregard for veracity in these proceedings would call into question the integrity of this and other proceedings.
2/ As the following illustrates, American has long been making outrageous claims:
British Airways' attempted invasion of the U.S. market is setting off a revolution in the battle for global air travelers-even as the carriers proposed linkup with USAir runs into heavy flak . . . AMR Chairman Robert Crandall warns that American may have to sell itself to an international carrier to compete. "Mixing of U.S., Foreign Carriers Alters Market," Wall Street Journal, December 21, 1992.
American, desperate to prevent United's proposed acquisition of Air Wisconsin and its Chicago Hub O'Hare et slots, said in its antitrust lawsuit against United that if the transaction goes through, American may well e forced to abandon its O'Hare hub. American says it is already struggling to maintain operations at O'Hare. In its suit, filed Monday, in New York federal court, American argues that is already struggling to maintain the O'Hare operation. "American Says Chicago Hub May Go if United Acquires Air Wisconsin," Aviation Daily, 11/21/91
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Therefore, Legend requests that the Department suspend this proceeding until American clarifies its position by submitting a statement of fact regarding the status of DFW.
Respectfully submitted,
Edward P. Faberman
UNGARETTI & HARRIS
1500 K Street, N.W., Suite 250
Washington, DC 20005-1714
Tel. (202) 639-7500
Fax (202) 639-7505