Continental Express will be unable to implement its new regional jet service out of Dallas/Love Field fully until 1999 at the earliest, because of a legal wrangle that has developed with the city's main airport, Dallas-Fort Worth. The court case could set an important precedent.
In the latest controversy over growth at Love Field, DFW management and Fort Worth city have won a court injunction preventing Continental Express from operating an interstate service out of Love Field until a full court hearing can be held, probably next January. Consequently, Continental Express had to drop plans to begin a regional jet service to Cleveland, Ohio in July. It can continue its other new service, to Houston, because that is an intrastate operation.
The legal argument hinges on whether a user agreement signed between DFW and Continental Airlines also applies to its regional subsidiary, Continental Express. Like most of the US majors, Continental has agreed that its interstate services from the Dallas area will be flown only out of DFW. Continental Express argues that it is free to provide such services out of Love Field because it operates as a separate company.
Continental Express says it is outraged by the ban and plans to fight the ruling. 'There has long been a monopoly there and DFW doesn't want anyone tinkering with that monopoly,' says Continental Airlines.
DFW argues that it must defend the agreement it has with the nearby cities of Dallas and Fort Worth to develop one major airport in the region and restrict growth at the other. 'The basic tenet behind all of this is that the status quo should be retained,' says DFW's first deputy executive director, Kevin Cox. 'It gives us no pleasure to sue our tenant airlines, but it is a fundamental issue in which we have no leeway. We did not put Continental in this position.'
This is the first time the user agreement has been tested and Cox admits that there is a precedent at stake. 'If we allow one signatory to bust the agreement, then our floodgates would open,' he says.
But growing interest in Love Field may prevent those gates from ever being fully locked again. Southwest Airlines, which never signed a user agreement with DFW, operates successfully out of Love Field even with the various restrictions. Startup Legend will begin a long-haul service from Love to cities on either US coast at the end of 1998. And American Airlines has declared an interest in starting a regional service from Love to cities such as Austin.
'The truth of the matter is that it's now apparent there is a real risk there will be increased activity at Love, and a great number of our best customers live near Love Field,' says American's chairman and chief executive officer, Donald Carty.
Source: Airline Business
