Tuesday - May 23, 2017

Virgin America gets the go ahead from the City of Dallas to sublease two gates at the city’s Love Field airport


Virgin America gets the go ahead from the City of Dallas Love Field

After more than a month of negotiation, the city of Dallas finally gave the go-ahead to the Virgin America airline to begin operating the two gates at Dallas Love Field made available when American Airlines were required to give up after their merger with US Airways.

Since American Airlines were advised that they could no longer operate the gates, there has been strong competition to take them over, principally between Virgin America, Southwest Airlines and Delta Air Lines.

Almost as soon as they became available, American Airlines signed an agreement with Virgin America to allow them to operate the two gates, with the American Department of Justice (DOJ) also approving the deal. All that was required was for A.C. Gonzalez, Dallas City Manager to give the green light to transfer American Airline’s original lease agreement with the city to Virgin, which will allow them to seriously expand their operations in North Texas.

Confirming that they will be taking over the running of the gates, David Cush of Virgin America issued a statement in which he emphasised how pleased the company were to have the opportunity to bring new competition to Love Field, which is an important airport for business travellers thanks to its close proximity to the city’s central business district.

According to reports from within the industry, Dallas City Council were reported to be wavering in the favour of Southwest Airlines, after they had gone over a report prepared on their behalf by L.E.K. Consultants weighing up the pros and cons of the three airlines who were vying for the opportinity to establish a presence at Love Field.

Initially, it appeared that the city council had opted for Southwest Airlines, but were eventually persuaded by the DOJ to opt for Virgin America as they claimed it would not only increase competition at Love Field but also that virgin where the only airline that would fulfill terms of its settlement with American Airlines.

In order to seal the deal, Virgin America is obliged to provide a performance guarantee in the form of a $4 million irrevocable letter of credit issues to American Airlines to ensure that all obligations relating to the lease will be met.

In their own inimitable style, Virgin America launched a publicity campaign to persuade both the local authorities as well as the people of Dallas to “free Love Field,” with Sir Richard Branson himself attending a rally in the city.

In a newspaper interview with the The Dallas Morning News, Sir Richard explained that the reason for his visit was “to get across the idea that competition matters — that competition is obviously beneficial to the traveling public.”

Virgin America currently operates six daily flights to San Francisco and Los Angeles from Dallas’s Fort Worth International Airport, but are now reportedly already preparing to move their operations to Love Field, hopefully by some time in October.

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