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Southwest Airlines Co. Message Board

  • texasbroker2000 texasbroker2000 Nov 3, 2005 5:21 PM Flag

    Wright supporters

    Why don't the LUV bashers and Wright supporters on this board give me a reasonable explanation for this.....Flying from St. Louis to Dallas need a one way ticket. On AA that costs $265 for a non stop....if I go through Tulsa or Oklahoma city it's $79. Why? Because AA is forced to compete with this non stop itinerary with Southwest....there is no other explanation.

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    • The only explanation for the Wright Amendment is a diversion of resources from Texans and Americans everywhere to AA and D/FW's outlying areas. Mancur Olsen's Logic of Collective Action explains why the regulations have persisted for so long.
      The costs of higher fares are distributed widely across the country, whereas the benefits are concentrated with AA and North Texas. Thus, support for the amendment will more easily form, as it has, and demand for repeal will remain dispersed.
      But the wild card in this formula is Southwest, who incurs concentrated costs from Wright as well. As Wright has limited their growth severely (and stifled investors' expectations for accelerating returns) and communicated the costs of Wright, the balance of power has shifted. Given republican deregulatory dogma and Southwest's new muscle, I expect a repeal at some point. Of course these are just my observations applied to the theory of a Nobel laureate.

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