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May 12, 2014

Virgin America wins Love Field gates

Virgin America Dallas 3 (1)

Virgin America is free to fly at Love Field.

Dallas city manager A.C. Gonzalez announced today that he would approve an agreement between Virgin America and American Airlines to transfer the lease on two gates at the city-owned airport to the San Francisco-based carrier. American was forced to divest the gates as part of its antitrust settlement agreement with the U.S. Department of Justice related to its merger with US Airways.

Gonzalez initially expected to make his decision late last week after discussing the gate situation with the Dallas City Council but delayed his announcement until Monday as the city drafted a compliance agreement for Virgin America. Both Southwest Airlines and Delta Air Lines had hoped to use the gates. However, the Justice Department concluded that divesting the gates to Virgin America would increase competition at Love Field and was the only airline that would fulfill the terms of American’s settlement with the government.

"Rather than simply signing the sub-lease presented to us, we took some additional time to make sure our actions would be responsible and capture the vision of the Justice Department’s selected carrier. This was accomplished by incorporating Virgin’s publicly stated intentions into a compliance agreement," Gonzalez said in a statement.

The agreement includes Virgin America committing to the city's noise abatement program and clarifies how any unused gate space may be made accessible to other airlines.

Virgin America, which has already begun selling tickets on flights out of Dallas, will launch service at Love Field on Oct. 13. Initially, Virgin will fly 14 daily routes to San Francisco, Los Angeles, Washington D.C.’s Reagan National and New York’s LaGuardia airports. It plans to add flights to Chicago O’Hare in 2015, operating a total of 18 daily flights on its full schedule next year.

American does not currently use the gates at Love Field, but subleases them to Delta and Seaport Airlines. It was required by the Justice Department to divest take-off and landing slots at New York LaGuardia’s Airport and Washington D.C.’s Reagan National airport along with gates at several airports including Love Field.

In a letter sent to the city last week, the Justice Department said it would reject proposals from the city that would give the gates to Southwest or Delta. With the Wright Amendment flight restrictions on long-haul service at Love Field expiring on Oct. 13, airlines have clamored for access to Love Field, hoping to attract Dallas business travelers with convenient flights.

“I appreciate the airline carriers who showed interest in the two gates,” Gonzalez said. “We are excited about how the lifting of some Wright Amendment restrictions will expand opportunities and choices for Dallas residents and the traveling public.”

With the gates going to Virgin America, Southwest will retain control of 16 of the 20 gates at Love Field and still plans to significantly expand its destinations once the restrictions are lifted in October. United Airlines currently leases the remaining two gates at Love Field, flying regional jets to its hub airport in Houston.

Following a Dallas City Council meeting on Wednesday, Virgin America’s chief executive David Cush said he was “highly confident” that his airline would receive the gates. The airline conducted a very public campaign to “free Love Field,” bringing in Virgin’s British founder Richard Branson to attend a rally in Dallas and write a “love letter” to the city.

Virgin America operates six daily flights at Dallas/Fort Worth Airport to San Francisco and Los Angeles and plans to move its operations to Love Field in October.

Photo by Star-Telegram's Max Faulkner.

-Andrea Ahles

Statement from Dallas City Manager:

After consideration of a number of factors, the City of Dallas has provided its consent to the sub-lease to Virgin America requested by American Airlines. Per the sub-lease agreement submitted, Virgin America will adhere to all terms and conditions set forth in the base lease.

Contrary to reports, this was not a competition. While initially, The City was told to expect a collaborative process, the Justice Department eventually required American Airlines to sub-lease the Love Field gates to a chosen airline. The City was presented with the sub-lease.

Rather than simply signing the sub-lease presented to us, we took some additional time to make sure our actions would be responsible and capture the vision of the Justice Department’s selected carrier. This was accomplished by incorporating Virgin’s publicly stated intentions into a compliance agreement. The major elements are:

  • ·        Commits Virgin to the standards included in the City’s noise abatement program
  • ·        Clarifies and expands how any unused gate space might be made accessible to other airlines
  • ·        Protects the City from possible legal expense through an indemnification clause

I appreciate the airline carriers who showed interest in the two gates. We are excited about how the lifting of some Wright Amendment restrictions will expand opportunities and choices for Dallas residents and the traveling public. We look forward to working with Virgin America and welcome them to Dallas Love Field.

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