Southwest Airlines, Delta Debate Cash Payment of Airport Gates in Court Hearing
Written by: Sheryl Jean
Cash payment for airport gates — and specifically gates at Love Field — emerged on Monday as a key bone of contention between the two airlines on the first day of their federal court hearing about whether Delta should continue flying at the city-owned airport.
“While that $120 million sounds like a lot of money, it was calculated out to the penny,” Britta Stanton, a lawyer for Dallas-based Southwest told U.S. District Court Judge Ed Kinkeade.
Both Southwest and Delta vied to sublease two gates from United Airlines, which left Love Field. Southwest wanted the gates to expand from 116 departures a day to 180 daily flights. Delta wanted the gates so it could continue operating at the airport and to expand.
In comparison, Atlanta-based Delta senior vice president of real estate Holden Shannon said the airline would have paid at least a $8.4 million for the two gates over the 14 years, or at least $300,000 per gate per year. Shannon noted that you could buy used planes for less money.
“You can get eight to 10 planes for what these gates cost?” asked Kinkeade.
Delta thinks paying cash for gates is “illegal” and violates the city of Dallas’ competition plan and Federal Aviation Administration policies.
“You fight hard, but you fight within the rules,” Delta lawyer William Dawson said.
Delta does not buy or sell gates for cash, Shannon said. Delta instead offered to pay United a gate rental fee of about $300,000 to sublease the two gates plus a series of gate swaps with United at other airports.
However, Southwest lawyer Stanton showed a Jan. 23 internal Delta letter that refers to the possibility of paying “a premium” for one gate assignment ("one time cash payment") at Love Field from United or a long-term sublease via a rental premium.”
Delta now operates five daily flights to Atlanta from Love Field using a gate under a licensing agreement with Southwest until Wednesday or when Kinkeade makes a decision on the airline’s request to keep flying at Love Field. It’s the third temporary agreement that Delta has had with an airline since October, when federal flying restrictions lifted at Love Field.
Since October, Delta has been trying to gain a permanent foothold at Love Field since.
In court, Delta argued that it should be able to keep flying at Love Field because Southwest doesn’t own the gates, the city does, and there’s space at the airport.
Southwest says its lease with the city of Dallas gives it “preferential use” of its gates.
Southwest also argues that Delta should be kicked out of Love Field because it already competes in the marketplace from Dallas/Fort Worth International Airport. Delta disagrees with Southwest’s one marketplace viewpoint.
“Why do you want to go through lawsuits and all this when you can fly out of D/FW?” Kinkeade asked Delta toward the end of seven hours of testimony.
“We feel Dallas is a really important city,” Shannon said. He noted that D/FW Airport “doesn’t really cut it” for serving travelers from parts of Dallas, such as Oak Cliff and Uptown.