S. 3661, REPEAL OF THE WRIGHT AMENDMENT

Most people do not realize the history of the Wright amendment. When DFW Airport was forced on the cities of Dallas and Ft. Worth by a Federal mandate, the cities made agreements with airlines that DFW Airport would be the only functioning major airport in the region. It was to be the international airport, and Love Field was to be closed. After litigation, Love Field was allowed to be an intrastate airport. The Wright amendment later opened Love Field to serve the contiguous States, but that became untenable as aviation traffic continued to grow. The Wright amendment was very confining and was not the best competitive situation.

There have been many attempts to expand the Wright amendment. There have also been attempts to repeal the Wright amendment. Many in Congress asked the mayors of the two cities to come up with a local solution, rather than have Congress once again pass legislation that may or may not take into consideration the interests of the people who live and work and pay taxes in the Dallas-Ft. Worth area. The mayors did just that.

Mayor Laura Miller and Mayor Mike Moncrief, the mayors of Dallas and Ft. Worth, did an incredible job. They came together and made an agreement. Cities can make agreements. Under State law, cities can make agreements and there is never an antitrust issue when cities make agreements.

The antitrust issue was raised because two airlines became part of the agreement. The cities brought them in because lease agreements that were in place with those air carriers were going to have to be compromised, they were going to have to be changed and broken.

Instead of pursuing condemnation, the parties were brought together to get a consensus of their willingness to give up some rights in order to settle this once and for all and open competition both at Love Field and at DFW Airport.

The cities did a great job. They made an agreement and they brought it to Congress. I have felt since the beginning, it was Congress's responsibility to take that agreement, ratify it and mandate that the agreement be kept in its entirety because it is so balanced. And if you did away with the Wright amendment, but you did not have the 20 gate limit and the implementation of the 20 gates, it could have gone out of balance.

So this act, regardless of anything else that has been said, authorizes, mandates, and protects all aspects of performance of the legislation's terms, including that the city of Dallas reduce and allocate gates according to this act, its contractual obligations as contemplated by the act, and the local compromise and the balance it has achieved.

This legislation will allow the DFW Metroplex to end decades of bitterness and infighting that have plagued the Wright amendment. It provides a solution that all parties affected have agreed to. And just about every party to this agreement has given something up for the good of the North Texas economy and the traveling public.

We can now move forward to allow immediate benefits to consumers and the traveling public because airline prices are going to go down when this bill is passed. Actually, the bill has already passed. I am very pleased to say it has passed the Senate. It is going to the House now. And you will see, when the bill becomes law, that the prices of tickets from Dallas Love Field are going to go down to every destination. That is going to increase competition and interest in flying, which is going to be good for everyone.

Mr. President, I have a letter that was sent to four of the ranking members and committee chairs on September 28, 2006. It is addressed to Senator Specter, Senator Leahy, Congressman Sensenbrenner, and Congressman Conyers. And it is from the mayor of Dallas and the mayor of Fort Worth. I ask unanimous consent it be printed in the Record. It tells the history of the Wright amendment and how competition will be increased.

There being no objection, the material was ordered to be printed in the Record, as follows:

September 28, 2006.

Re Repeal of the Wright Amendment--S. 3661; H.R. 5830.

Hon. ARLEN SPECTER,
Chairman, Committee on the Judiciary, U.S. Senate, Washington, DC.

Hon. PATRICK J. LEAHY,
Ranking Member, Committee on the Judiciary, U.S. Senate, Washington, DC.

Hon. F. JAMES SENSENBRENNER, Jr.,
Chairman, Committee on the Judiciary, House of Representatives, Washington, DC.

Hon. JOHN CONYERS, Jr.,
Ranking Member, Committee on the Judiciary, House of Representatives, Washington, DC.

DEAR SENATORS AND REPRESENTATIVES: We are writing in response to letters from various detractors of the proposed legislation to repeal the Wright Amendment. As the duly-elected mayors and their city attorneys, and on behalf of the citizens of Dallas and Fort Worth, we offer the following observations for your consideration.

1. The suggestion by critics that the proposed legislation is somehow anticompetitive and would lead to higher fares and reduced service for consumers in the Dallas-Fort Worth area is patently incorrect. Not surprisingly, these suggestions are unaccompanied by any factual foundation or economic analysis. On the contrary, the proposed Agreement would enhance airline competition in the Dallas-Fort Worth area and benefit consumers and airlines seeking to provide service to the area. As we describe more fully below, independent studies confirm that, in the short term, passage of the proposed legislation would (1) increase the number of passengers traveling to and from North Texas by two million annually, (2) result in fare savings of approximately $260 million per year, and (3) produce overall economic benefits of $2.4 billion annually.

2. The detractors of the proposed legislation wholly fail to address the critically important considerations of aircraft noise, air quality, traffic congestion in the airport vicinity, and economic activity in the region. With few exceptions, airport operations reflect tradeoffs between economic and environmental considerations. The proposed legislation concerning Love Field is no different. The legislation reflects a carefully crafted balance of these considerations by the local governments principally responsible for managing these issues. Unlike the observations offered by certain critics, the compromise reflected in the proposed legislation is not confined to the issues of airline competition only, but rather reflects an accommodation of a full range of economic and environmental considerations that are important to Dallas and Fort Worth.

I. THE WRIGHT AMENDMENT COMPROMISE WAS FORGED BY LOCAL GOVERNMENT LEADERS AT THE URGING OF CONGRESS

As an initial matter, it bears emphasis that a number of Congressional leaders have long urged the cities of Dallas and Fort Worth to work towards a local compromise to resolve the longstanding controversies over the 1979 Wright Amendment and its restrictions on commercial air service to and from Dallas Love Field. Prompted by that Congressional call for action, the mayors of Dallas and Forth Worth spearheaded efforts to forge a compromise among local government leaders and representatives of the Dallas-Fort Worth International Airport Board (``DFW Board'').

The mayors and representatives of the DFW Board first reached consensus among themselves on the propriety of a local solution for repeal of the Wright Amendment. Thereafter, the mayors and DFW Board persuaded Southwest Airlines and American Airlines (as the principal tenants of the main terminal at Love Field that would be called on to give up property rights at Love Field) of the virtues of a local solution, and that the solution the mayors and DFW Board proposed likely would be favorably received by Congress. As a consequence, Southwest and American each decided to support the Wright Amendment compromise forged by Dallas, Fort Worth, and the DFW Board.

II. THE WRIGHT AMENDMENT COMPROMISE IS GOOD FOR AIRLINE COMPETITION AND FOR CONSUMERS

After considerable study and examination, it is the view of Dallas and Fort Worth that the Wright Amendment compromise reflected in S. 3661 and H.R. 5830 would open the North Texas market to considerably more competition in air transportation.

To begin with, congressional approval of the Wright Amendment compromise would enable Southwest and other airlines serving Love Field immediately to begin selling ``through tickets'' for travel to and from Love Field. This would allow Love Field customers to travel on a one-stop basis to and from cities nationwide. By contrast, under the terms of the Wright and Shelby Amendments, airlines flying out of Love Field are limited to a handful of nearby states.

Detractors maintain that the proposed legislation could be anticompetitive, perhaps resulting in higher fares on many routes. This is conjecture unsubstantiated by any facts. Quite to the contrary, the Agreement, if implemented, would result in a reduction in fares and hundreds of millions of dollars in cost savings for consumers.

Two highly respected economic consulting firms, the Campbell-Hill Aviation Group and SH&E International Air Transport Consultancy, recently performed an economic analysis of the Wright Amendment compromise. Their joint findings show that ``through ticketing'' at Love Field would increase the number of passengers traveling to and from North Texas by two million, produce $259 million in fare savings, and generate $2.4 billion in overall economic benefits--all on an annual basis.

Equally unsupported are the arguments regarding the proposed reduction of gates at Love Field. However, these critics fail to acknowledge that the proposed reduction of gates at Love Field from 32 to 20 would still leave more gates in service than the 19 or fewer gates that airlines have utilized since the inception of the Wright Amendment.

More fundamentally, besides ignoring the economic analysis of the Wright Amendment Compromise set forth in the Campbell-Hill and SH&E study, these commentators also fail to acknowledge a study commissioned by the City of Dallas, which was prepared by DMJM Aviation and released on May 31, 2006. The DMJM Aviation study found that if the Wright Amendment is repealed, the optimal number of gates at Love Field would be 20 in order to prevent excessive noise, emissions, and traffic congestion in the local community. Repeal of the Wright Amendment, which limits long-haul service to aircraft of 56 seats or less, would result in more large aircraft carrying more passengers to and from Love Field. Thus, the study concluded a 20-gate limit without the Wright Amendment would be equivalent in noise, pollution, and congestion to the 32 gates now found at Love Field (again, only 19 of which are currently utilized).

Just as the prognostication of an increase in airfares is incorrect, so, too, is the speculation that the proposed elimination of twelve gates at Love Field would bar potential competitors from gaining access to the market. In truth, carriers would not be prevented from obtaining access to Love Field in the future. As set forth in the July 31, 2001 Airline Competition Plan submitted by the City of Dallas for Love Field, ``the operational main terminal gates at Love Field are all subject to scarce resource provisions that, when invoked, render those gates preferential use gates.'' Thus, the ``scarce resource'' provision allows the City of Dallas to require incumbent airlines to share gates that are not fully used at Love Field. This provision is essentially the same as the procedures used at most other major U.S. airports to accommodate new entrant carriers.

The process for accommodating an airline seeking space involves three stages, as outlined in the Love Field Airline Competition Plan. First, if the City of Dallas has space available to lease directly, it would do so. Second, in the absence of space available for direct lease, the City of Dallas would refer the requesting airline to parties who are known to have gates or gate capacity available. Finally, if neither of these approaches proves fruitful, the ``scarce resource'' provisions of the lease permit the City of Dallas to unilaterally require an incumbent airline to accommodate a requesting airline in its premises. Thus, the assertion that accommodation of new entrants resides solely within the good graces of the incumbent airlines is false.

In fact, the City of Dallas regularly offers its support to requesting carriers to assist in the negotiation of reasonable sublease terms. Significantly, there have been no cases in which an air carrier that was ready and willing to begin or expand service to Love Field has been unable to do so due to inability to secure reasonable access to needed facilities.

Moreover, as previously recognized in an unsuccessful antitrust case brought by the Department of Justice against American, ``there are no structural barriers to entry at DFW, which can accommodate any domestic carrier that seeks to establish or expand service.'' United States v. AMR Corp., 140 F. Supp. 2d 1141, 1210 (D. Kan. 2001), aff'd, 335 F. 3d 1109 (10th Cir. 2003). DFW has 15 gates that are currently available to be leased, and many other gates that are underutilized. In fact, DFW has one of the most aggressive Air Service Incentive Programs in the country. A carrier that is willing to offer new domestic air service to one of DFW's top 50 domestic markets is eligible to receive up to six months free landing fees, up to $100,000 in marketing support, and an additional $50,000 in marketing support if the carrier is new to DFW. See also United States v. AMR Corp., 140 F. Supp. 2d at 1210.

In sum, there is ready access to both Love Field and DFW, and the proposed Wright Amendment compromise would ensure continued access to the marketplace by carriers seeking to provide service. Contrary to the suggestions of others, the economic analyses conducted to date demonstrate that the proposed legislation would foster competition among carriers, enable consumers to save hundreds of millions of dollars in air fares each year, and provide a carefully-constructed and sensible solution to a decades-old problem.

In essence, these critics apparently contend that Congress should simply repeal the Wright Amendment, while ignoring the other important issues resolved by the proposed legislation. That suggestion ignores the genesis and history of this local compromise, the practical reasons for its detailed terms, and the substantial tangible benefits this legislation would provide not only for the people of Dallas-Fort Worth, but for air travelers nationwide. The proposed legislation is the result of a local government initiative to forge a solution to a series of pressing and inter-related regional transportation issues. The cities of Dallas and Fort Worth spearheaded this effort not only to repeal the Wright Amendment and thereby improve air competition, but simultaneously to improve the regional transportation infrastructure serving Dallas and Fort Worth, to stimulate to the greatest extent possible regional economic growth, and to address community concerns about the noise, traffic, and air pollution associated with increased service at these airports. Balancing these interests was an enormously difficult endeavor, requiring years of economic and environmental study, planning, negotiation, and compromise. After much study and consideration, we strongly believe the result is a compromise that is good for the region and good for air competition. In short, these detractors simply do not recognize the complexity of the issues or the care with which local officials and various constituencies have addressed these important issues.

Again, thank you for your careful continued consideration of the proposed legislation concerning the repeal of the Wright Amendment. We stand ready to respond to any questions you or members of your staffs might have.

Sincerely,

Laura Miller,
Mayor, City of Dallas.

Thomas P. Perkins, Jr.,
City Attorney, City of Dallas.

Mike Moncrief,
Mayor, City of Fort Worth

David L. Yett,
City Attorney, City of Fort Worth.

Mrs. HUTCHISON. A lot of people--so many people--helped put this agreement together and hammer out the differences and views on the issues. We heard today that Senator Leahy has one view. Senator Cornyn has a view. I have a view. Just about everybody in Congress who has dealt with this issue has a view.

But I think the law we are passing speaks for itself. The law is very clear in what it instructs the city of Dallas to do, as well as the FAA and the Department of Transportation in implementing this agreement. I think it is a major piece of legislation that is absolutely right.

I agree with Senator Leahy and Senator Cornyn that this is not going to set a precedent. It is a unique situation that was brought on by a Federal mandate and then a Federal law. And the local community has had less input into its own aviation capabilities than maybe any other two major cities in America with major airports. I think today we have clarified the Wright amendment, and I do not think it is ever going to set a precedent because no other airport has a Wright amendment.

So as we phase it out gradually, in an orderly way, to protect the integrity of the DFW Airport, as well as increasing competition in both DFW and Love Field, this is, for the taxpayers and the consumers and the traveling public, a win all the way around.

I want to thank a few people because no one could have passed this bill alone. It took so much cooperation and so many things that were necessary to bring everyone together.

I thank Senator Stevens and Senator Inouye, the chairman and ranking member of the committee of jurisdiction, the Commerce Committee. I could not have asked for more help. The bill passed out of the Commerce Committee 21 to 1. Senator Rockefeller was the only one who voted no, but he could not have been more accommodating and honorable in his objection. Once we passed the bill out of committee, we worked with him to make sure he was a part of everything we did. He has been wonderful to work with.

I thank Senator Specter and Senator Leahy, who had concerns on the Judiciary Committee. I thank Senator Burns, Senator Frist, Senator Reid, Senator Ensign, Senator McCain, former Speaker Jim Wright, who also agrees the time has come to have an orderly repeal of the amendment that he put in place, and, of course, Senator Cornyn. I also want to say Senator Sununu was just a gentleman in these last couple of days to help us in the ultimate solution of this bill.

I want to say that staff people, who are pro-progress, who have innovation, and are willing to work so hard--which staff people in this Senate do on such a routine basis--I am so appreciative and so respectful of them. I want to mention a couple because without them we would never have gotten this done.

I thank Lisa Sutherland, Christine Kurth, Ken Nahagian, Sam Whitehorn, Jarrod Thompson, Gael Sullivan, and James Reid on the Commerce Committee. Every one of them had an immense impact on this legislation. I thank Harold Kim, Joe Jacquot, and Ivy Johnson, from Senator Specter's staff; J.P. Dowd, Susan Davies, and Ed Pagano from Senator Leahy's staff;--all who were incredible and so helpful.

I want to take a moment to say that Senator Durbin and Senator Schumer also helped in many of the negotiations on this issue. Senator Lott was there from the very beginning.

But I also want to take a moment of personal privilege about my staff. I have never seen such dedication on such a tough issue as James Christoferson, Matthew Acock, Lindsey Dickinson, Dick Ribbentrop, and Marc Short made in contributing to this victory for my constituents in Texas. These five people worked on this bill, this negotiation, on a daily basis for the last 6 months. There was never a day when we did not have some item that we were trying to move forward to get this bill to the point that we could pass it on the Senate floor. I think the people of Texas owe a great deal of gratitude to these dedicated members of my staff for never giving up, even when it was bleak from time to time, and being as dedicated as I was to making sure the right result for all parties to this agreement became a part of the solution.

When you work on something for so long, and you know how important it is, and how many people are counting on you, you just feel honorbound to do your best to make sure the people who have worked hard are rewarded. When Mayor Miller and Mayor Moncrief made this agreement, and when they got the support they needed from the DFW Airport, from American Airlines, and from Southwest Airlines--because their rights were affected--everybody gave a little in order to do good for the populace.

I know in the coming years the traveling public in the North Texas area--in and out--are going to see the benefits of a great competitive atmosphere. The DFW Airport gives the greatest service. They are the mid-country airport that really is the stopping off point for so many travelers going to the rest of the world. That is going to increase, and it is going to increase with lower fares and more convenience. It is going to be more convenient even with the safety antiterrorism measures that are being taken, which we know can inconvenience the traveling public.

DFW Airport is going to be the long-haul service carrier that will be the window to the world for people who live in the middle part of our country. Love Field is going to be a dynamic, limited-use airport because it sits right in the middle of an area that is full of wonderful neighborhoods, schools, churches, and businesses. The right of the city of Dallas to protect the citizens who live in the area is well recognized in the law, and they are invoking it. The city is doing a great job of making sure we have more competition and better fares. Love Field, while a dynamic airport sitting in the middle of a neighborhood, also deserves the safety and the environmental protections of all of our citizens.

President, I thank you for the time. I am very pleased this bill has passed. I look forward to seeing the benefits.

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