US Airways backs Washington airport ruling

US Airways is applauding legislation to relax the 1,250 mile perimeter rule at
Ronald Reagan Washington National Airport. Legislation introduced on Thursday would allow airlines which currently have slots at Reagan National to convert flights now serving large hub airports inside the perimeter into flights serving any airport outside the perimeter.

The proposal was introduced in the Senate by Senator John Ensign, R-Nev. He was joined by co-sponsors Barbara Boxer, D-Calif. and John McCain, R-Ariz.

Such an approach will enhance competition and give consumers greater choice while ensuring that small and medium size communities inside the Reagan National perimeter will not be adversely impacted. “Conversion” would be permitted only with respect to service to and from large hub airports located inside the perimeter. However, the legislation would provide sufficient flexibility to allow airlines serving Reagan National to better connect with their hubs outside the perimeter and to serve other destinations in the western United States.

Today California and the West Coast are especially disadvantaged by the perimeter rule. US Airways market research indicates there is significant demand for nonstop service to close-in Reagan National. Demand is especially strong from large West Coast cities such as Los Angeles, San Francisco, and San Diego. Yet today, nonstop service between San Francisco and San Diego is non-existent, and only one nonstop flight is allowed to operate daily between Reagan National and Los Angeles. If additional service were allowed, US Airways estimates that an additional 500,000 consumers would choose to fly to Reagan National annually from the three largest California cities alone.

Existing federal law restricts the departure or arrival of nonstop flights to or from airports that are farther then 1,250 miles from Reagan National. These restrictions are commonly referred to as the “perimeter rule.” The original purpose of the perimeter rule (adopted in 1966) was to promote Washington Dulles International Airport as the “long haul” airport serving the Washington, D.C. area. Reagan National was deemed the “short haul” airport for travelers flying to and from East Coast and Midwest cities.

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The Washington, D.C. market has matured and changed dramatically over the years. Consequently, since the year 2000, Congress has appropriately granted limited exceptions to the perimeter rule because the traveling public is eager for air travel options. Yet, today, only a dozen nonstop flights are permitted between Reagan National and the entire western United States—four flights to Denver, three to Phoenix, two to Seattle, one to Las Vegas, one to Los Angeles, and one to Salt Lake City.

“The National Airport perimeter rule is an artificial barrier that blocks free and open competition in the airline industry,” said Doug Parker, US Airways chairman and CEO. “It is similar to the restrictions imposed on Dallas Love Field under the Wright Amendment, which Congress moved to phase out in 2006. Congress should likewise act to address the adverse competitive impact of the National Airport perimeter rule—one of the last remaining barriers to an open and free market in the domestic airline industry.”

Parker noted that the rule should ultimately be repealed. In the interim, Congress should consider the approach advocated by Senators Ensign, Boxer and McCain to enhance competition while ensuring that service to small and medium size communities inside the perimeter will not suffer.

“We commend Senators Ensign, Boxer and McCain,” continued Parker. “We welcome their pro-consumer support for relaxing the anti-competitive perimeter rule at Reagan National.”
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