"Airline aims to prove conspiracy at Love Field"

Monday, May 14, 2007

Airline aims to prove conspiracy at Love
City says it has made a reasonable offer
By Margaret Allen
The Dallas (TX) Business Journal


Small but determined: Lewis McPherson, owner and president of Dallas-based
Small Community Airlines Inc., has taken on the city of Dallas in his bid to
fly from city-owned Dallas Love Field.

Small Community Airlines Inc. planned this week to start requesting
documents it believes will prove city officials cut a secret deal to stop
the tiny airline from competing at city-owned Dallas Love Field. 

Dallas-based SCA -- which plans to fly scheduled, commercial passenger
service from Love Field -- is suing Dallas Mayor Laura Miller and six City
Council members in Dallas County District Court. 
 
The start-up airline, led by President Lewis McPherson, claims city
officials are trying to deny the airline the gate space it needs at Love,
where Southwest Airlines Co. (NYSE: LUV) has been the dominant carrier for
more than 30 years. 

But Robert C. Walters, an attorney with Vinson & Elkins LLP who's
representing the city, said SCA's lawsuit faces its last remaining sliver of
hope. He noted the court in January dismissed claims that city officials
violated the Texas Open Meetings Act, and on May 1 dismissed antitrust
claims. 

The city and various carriers deny they conspired to cut a secret deal,
Walters said. 

"We are supremely confident that that's unprovable," he said. "That's just
made up out of whole cloth." 

SCA has two British Aerospace 19-seat Jetstream 31s and requires a
"hardstand" gate that allows the small, twin-propeller airliners to
disembark passengers directly onto a tarmac rather than using elevated jet
bridges designed for large jets. 

The city hasn't denied SCA gate space, according to the airline's attorney
Emil Lippe Jr. with Lippe & Associates in Dallas. 

But SCA believes options the city has presented are unworkable, and
therefore constitute a denial. 

The price it has been offered is astronomical, Lippe said, and the gate is
in an area that may be demolished under terms of the federal 2006 Wright
Amendment Reform Act. Plus, the offered site wouldn't allow for compliance
with the Americans With Disabilities Act, he said. 

"We think that certain people are deciding that they want to turn Love Field
into the exclusive domain of Southwest Airlines and keep others out," Lippe
said. 

Walters disputed that. He said the terms SCA has been offered are "extremely
attractive and any viable airline would consider them desirable," he said.
In addition, he said, SCA hasn't presented the city with an alternative. 
 
"We're doubtful about (SCA's) sincerity to operate at Love Field," Walters
said. 

SCA perceives recent court proceedings in Dallas County's 101st Judicial
District a small victory for its case, originally filed in October 2006. 

Judge Martin Lowy on May 1 said he'd give SCA the chance to present evidence
to prove its theory of a secret agreement. If SCA wins its case, Lippe said,
the outcome would be good for travelers. 

"We're certainly not ever going to impact Southwest Airlines. They're huge
and we're tiny," he said. "But I think we would be good for competition. We
would serve small cities and provide a service not being met right now. We
don't think we'll hurt any of the players." 

SCA said it would start this week seeking historical documents from the city
that relate to internal planning and communications with American Airlines
Inc., Southwest and other parties to Wright reform in 2006. 

The 2006 agreement dismantled the 1979 Wright Amendment, which has for
decades limited city-owned Love Field to short-haul flights. Reform opens
Love in phases to nonstop, long-haul passenger service by 2014. Already it
has resulted in lower fares out of Love. 

The reform is based on a public agreement between the cities of Dallas and
Fort Worth, Dallas/Fort Worth International Airport, Fort Worth-based
American Airlines and Dallas-based Southwest. 

Miller was a central negotiator in spring and summer 2006 talks with D/FW,
American and Southwest to reform the Wright Amendment.

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