As we approach the homestretch of 2005, we still have some big things in store for our customers this year. One of the biggest is the brand-new Terminal D at Dallas/Fort Worth International Airport, which will be home to American Airlines’ international operation starting this fall. This state-of-the-art facility — which covers 29 acres and includes 2.1 million square feet of interior space — is the cornerstone of a $2.7 billion initiative that also includes Skylink, the world’s largest high-speed airport train.

Terminal D represents the next leap forward in North Texas’s ongoing evolution as a hub of international commerce and culture. Today, everyone understands that, in a global economy, integration and connectivity are the keys to prosperity. The leaders of Dallas and Fort Worth actually realized this way back in the late 1960s, when they decided to join together and invest their resources in one world-class airport rather than in two inferior facilities. The results speak for themselves, as DFW has grown into a major international gateway — American and American Eagle alone provide nonstop service to 28 international destinations — and the engine that drives the regional economy.

Unfortunately, despite our excitement about Terminal D, our optimism about DFW’s future is clouded at the moment by the ongoing effort to expand the service offered at Love Field, a smaller airport near downtown Dallas. I’m sure many of you are aware of the controversy surrounding legislation widely known as the Wright Amendment. Passed in 1979, the law allowed Love Field to remain open (despite both cities’ desire that it be closed) and granted one carrier a near monopoly there in return for permanent restrictions on where it could fly. Local citizens were relieved that the long and sometimes acrimonious debate over Love Field had ended, and they appreciated the compromise. In subsequent years, DFW, the airlines serving it, and local taxpayers invested billions of dollars under the assumption that the law would remain in effect. The $2.7 billion Terminal D project is a perfect example of this investment.

If the restrictions on Love Field are lifted, American and other airlines, to serve the needs of their customers, will have no choice but to shift a lot of flights from DFW to Dallas’s closer-in airport. That’s bad news for us, for DFW, and for the North Texas community that enjoys the robust international schedule that our hub makes possible. It’s a fact of life in this business that cities with large hubs receive more service, and more international service in particular, than they would attract on their own. It is the connecting traffic, by and large, that makes most international flights economically feasible. The desirability of international flights is one reason so many cities with new hub airports go to great lengths to make sure these facilities are not undermined by the old airports they replace. But the harm of shifting flights from DFW to Love Field would extend beyond North Texas. Fliers across the country rely on the connecting opportunities our DFW hub creates to Mexico, Central and South America, and elsewhere, and a reduced DFW schedule would make many of those flights hard to justify.

Please don’t be fooled into thinking that this debate is about low fares. In contrast to Love Field, there are lots of airlines competing for your business at DFW, and as a result, there are more low fares to more places than ever before. Both Economics 101 and logic tell us that prices are lowest where competition is vigorous and the playing field is level. Love Field is facility-constrained and single-carrier dominated, but there are plenty of available gates at DFW, which means any carrier willing to compete can fly wherever, and charge whatever, they wish.

This is a complex issue, one that’s hard to do justice to in this space. But it is also critically important to our airline, to our hometown, and to our future. If you would like to learn more, please visit www.keepdfwstrong.com. Thank you for your support and for flying with us today.

We’d love to hear what you think about our airline and our employees. Please write to us at www.aa.com/customerrelations.

Picture of Gerard Arpey

GERARD J. ARPEY
Chairman & CEO
American Airlines