Delta Air Lines (DAL) Fights Southwest Airlines (LUV) For Dallas Operations

Delta Air Lines, Inc. (NYSE:DAL) seems to be in a tough battle with Southwest Airlines Co (NYSE:LUV) over the Dallas Love Field Airport gates. Delta Air Lines has been using one of Southwest Airlines’ gates at Love airport under a contract which will expire on July 6 this year.

Southwest Airlines currently has 18 of the total 20 gates at Dallas Love Field airport, while the remaining two gates are operated by Virgin America Inc. (NASDAQ:VA). People familiar with the industry believe that if Southwest Airlines blocks Delta Air Lines’ renewal of the contract, it will have monopoly over flights operated from the airport.

On the other hand, Delta Air Lines intends to continue its flight operations from the Dallas Love airport with the Department of Transport writing a letter to the city attorney of Delta Air Lines permitting it to continue its operations at the Love airport. However, Southwest Airlines has filed a lawsuit against Delta flight operations on this issue.

With analysts estimating the lawsuit to take up to six months to resolve the issue considering the competition, both airlines have increased their flight operations from the airport. Southwest Airlines has increased its daily flights from 166 to 180, while Virgin America has increased its flight operations from Love airport to a maximum gate capacity of 20 daily flights.

Both airlines have room in their passenger capacity to operate from Dallas Love airport as Southwest Airlines is currently operating a fleet of 681 aircraft against Delta Air Lines’ fleet of 795 aircraft. Southwest’s monopoly on the gates will also affect American Airlines Group Inc.’s (NASDAQ:AAL) flight operations, as 13% of American Airlines flights operate from Dallas Love airport.

Southwest Airlines reported an increase of approximately 8% in its passenger revenue per available seat miles (PRASM) in the month of May. Comparatively, Delta Air Lines saw a fall of 5.5%, blamed on the strong dollar and low international market surcharge.

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