American Airlines dealing with bankruptcy, new competition

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by CASEY NORTON

WFAA

Posted on March 28, 2012 at 6:05 PM

Updated Wednesday, Mar 28 at 7:00 PM

ARLINGTON — Southwest Airlines passengers may claim their luggage at new destinations in 2014.

When the Wright Amendment expires, Dallas-based Southwest will be allowed to offer non-stop service across the country, putting it in direct competition with American Airlines.

"Certainly it is a way for American management to point out to the employees this is part of the reason for the changes that are coming," said University of Texas at Arlington economics professor Roger Meiners.

Meiners said American has to cut costs to compete with traditional low-cost carriers on the same routes.

In its latest bankruptcy filing, American named 28 routes that used to be exclusive from Dallas/Fort Worth International Airport to California, Pennsylvania, Washington, Florida and Indiana. The Fort Worth-based carrier said it made nearly $3 billion on those routes in 2011.

In 2014, American will no longer have the Wright Amendment to stop Southwest and others from flying from North Texas to the same cities... with lower fares.

"D/FW for a long time has had higher than normal fares," Meiners explained. "That's because American has gotten so much protection from competition."

Southwest wouldn't comment on possible route changes, but it is expanding its fleet and has said in the past it wants non-stop access to California, New York and Chicago.

Other low-cost carriers are making plans for service to the Caribbean and Latin America, where American now dominates.

Unions say American should have already set out its game plan for 2014 before it filed bankruptcy. They question why new competition has to be the end of the line for 13,000 employees.

E-mail cnorton@wfaa.com

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