American Airlines Group Inc. president Scott Kirby acknowledged Tuesday that opening up Dallas Love Field to more flights will hurt American’s business at Dallas/Fort Worth International Airport somewhat.
But he said American’s schedule and premium products give American “a real competitive advantage.” Any harm will be relatively small, Kirby told a Morgan Stanley investor conference in Laguna Beach, Calif.
The question came up because a 1980 law that limits service out of Love Field, the Wright amendment, expires Oct. 13. When that happens, airlines can fly nonstop from Love to any U.S. destination.
Southwest Airlines Co. has announced new nonstop service to 17 cities out of Dallas, including 15 routes that will begin on Oct. 13 or Nov. 2. By early January, it plans to operate 153 departures at Love Field, up from about 120 now.
American flies nonstop to all the same cities out of Dallas/Fort Worth Airport except for Oakland, Calif. That raises the question of how much the new Southwest service at the Dallas airport will cut into American’s business at the larger airport.
Not too much, Kirby suggested.
“Southwest is a great competitor. But I think we have a real competitive advantage in Dallas,” Kirby said.
“It will have an impact on us. But I think we will win the competitive battle, particularly for the premium business traveler. We have a much better schedule, get them to a lot more destinations, have a better product, get them in first class. And so I think we’ll be successful in holding onto most of our premium customers,” Kirby said.
Southwest’s early January schedule shows 52 flights to the 17 cities that will get nonstop service out of Dallas between Oct. 13 and Jan. 6. As of Tuesday, American offered 161 flights to the same airports or ones nearby (it flies to Chicago O’Hare, and Southwest flies to Chicago Midway).
Kirby called Southwest “a good and strong competitor” and said it “has a loyal following in Dallas.”
On the other hand, American has a lot of “positives” as a result of its merger Dec. 9 with US Airways that will overwhelm any financial damage to American caused by Southwest’s new flights, he said.
Kirby said the early returns from the American-US Airways mergers have been very positive, echoing a message that American chairman and chief executive Doug Parker delivered at a Washington, D.C., meeting.
“So far the integration is going well and very much according to plan,” Parker said in a luncheon address.
Parker said the three big mileposts coming up will be integration of the American and US Airways frequent flier programs, scheduled for early 2015; securing a single operating certificate from the Federal Aviation Administration, expected by mid-2015; and putting both airlines on the same reservations system, expected by late 2015.
Follow Terry Maxon on Twitter at @tmaxon.
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