Southwest Airlines 2012 Annual Report Download - page 25

The Wright Amendment
Section 29 of the International Air Transportation Competition Act of 1979, as amended (commonly known
as the “Wright Amendment”), prohibited the carriage of non-stop and through passengers on commercial flights
between Dallas Love Field and all states outside of Texas, with the exception of the following states (the “Wright
Amendment States”): Alabama, Arkansas, Kansas, Louisiana, Mississippi, Missouri, New Mexico, and Oklahoma.
Originally, the Wright Amendment permitted an airline to offer flights between Dallas Love Field and the Wright
Amendment States only to the extent the airline did not offer or provide any through service or ticketing with
another air carrier at Dallas Love Field and did not market service to or from Dallas Love Field and any point
outside of a Wright Amendment State. In other words, a Customer could not purchase a single ticket between Dallas
Love Field and any destination other than a Wright Amendment State. These restrictions did not apply to flights
operated with aircraft having 56 or fewer passenger seats. The Wright Amendment also did not restrict Southwest’s
intrastate Texas flights or its air service to or from points other than Dallas Love Field.
In 2006, the Company entered into an agreement with the City of Dallas, the City of Fort Worth, American
Airlines, Inc., and the DFW International Airport Board, pursuant to which the five parties sought enactment of
legislation to amend the Wright Amendment. Congress responded by passing the Wright Amendment Reform
Act of 2006, which immediately repealed the original through service and ticketing restrictions by allowing the
purchase of a single ticket between Dallas Love Field and any U.S. destination (while still requiring the
Customer to make a stop in a Wright Amendment State), and reduced the maximum number of gates available
for commercial air service at Dallas Love Field from 32 to 20. Pursuant to the Wright Amendment Reform Act
and local agreements with the City of Dallas with respect to gates, the Company can expand scheduled service
from Dallas Love Field. The Wright Amendment Reform Act also provides for substantial repeal of the
remainder of the Wright Amendment in October 2014. At such time Southwest will be able to fly to any U.S.
destination from Dallas Love Field unless such destination is restricted or otherwise limited by law. Nonstop
international service from Dallas Love Field will continue to be prohibited. The Company currently leases
16 gates at Dallas Love Field and expects to continue leasing 16 gates at the airport following substantial repeal
of the remainder of the Wright Amendment in October 2014.
Operational, Safety, and Health Regulation
Southwest, AirTran, and their third-party maintenance providers are subject to the jurisdiction of the FAA
with respect to their aircraft maintenance and operations, including equipment, ground facilities, dispatch,
communications, flight training personnel, and other matters affecting air safety. The FAA, acting through its
own powers or through the appropriate U.S. Attorney, has the power to bring proceedings for the imposition and
collection of fines for violation of the Federal Aviation Regulations.
To address compliance with its regulations, the FAA requires airlines to obtain, and Southwest and AirTran
have obtained, operating, airworthiness, and other certificates. These certificates are subject to suspension or
revocation for cause. In addition, pursuant to FAA regulations, Southwest and AirTran have established, and the
FAA has approved or accepted, as applicable, Southwest’s and AirTran’s operations specifications and
maintenance programs for their respective aircraft, ranging from frequent routine inspections to major overhauls.
Effective as of March 1, 2012, the Company obtained approval from the FAA of a single operating certificate
that allows the Company to operate aircraft and perform maintenance operations for both Southwest and AirTran
aircraft, subject to some restrictions.
In December 2011, the DOT and the FAA issued a rule to amend the FAA’s existing flight, duty, and rest
regulations. Among other things, the new rule, which will go into effect in 2014, requires a ten hour minimum
rest period prior to a pilot’s flight duty period, a two-hour increase over the old rules. The new rule also mandates
that a pilot must have an opportunity for eight hours of uninterrupted sleep within the ten-hour rest period. Pilots
will also be limited to no more than nine hours of “flight time,” which is considered by the FAA to be any time
an airplane is moving on its own power, even if it is on the ground at an airport. Pilots will also be limited to
28 working days in a month and will be required to be given at least 30 consecutive hours free from duty on a
weekly basis, a 25 percent increase over the current rules.
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